Value Relevance of Accounting Information: The Moderating Effects of Accounting Conservatism in a Frontier Market
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Date
2020
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Department of Business Administration, University of Maiduguri, Maiduguri, Nigeria
Abstract
This study examined the value relevance of accounting information and the moderating effect of conservatism on the value relevance of earnings. The Ohlson equity valuation model was used in this study as basis for model specification. Explanatory research design was employed and as such, panel data were obtained from secondary sources. The model of the study was estimated using panel fixed effect estimation technique. The study found that accounting information, which includes earnings, book value of equity, dividend, and conservatism have significant impact on share price. The interaction term, which measured moderating effect, was significant. Therefore, the study concludes that accounting information is value relevant, and conservatism moderates the value relevance of earnings. Hence, it is recommended that accounting conservatism be applied in a greater measure by company chieftains in preparing financial statements.
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Keywords
Accounting Information, Conservatism, Value Relevance, Earnings, Ohlson Model
Citation
17. Abogun, S., Olowookere, J.K., & Kasum, A.S. (2020): Value Relevance of Accounting Information: The Moderating Effects of Accounting Conservatism in a Frontier Market. African Journal of Management. 5(1); 106-119, Published by Department of Business Administration, University of Maiduguri, Maiduguri, Nigeria.