Variation in Value Relevance of Accounting Information of Nigerian Listed Deposit Money Banks
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Date
2016
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Publisher
Federal University Gashua, Yobe State
Abstract
This paper investigates the existence of variation in value relevance of accounting information of stand-alone and common interest listed Deposit Money Banks (DMBs) in Nigeria during a period of eight years (2005 - 2012). Eight DMBs consisting of two stand-alone and six common interest banks were sampled. Data relating to accounting information were collected from the published financial statements of the sampled banks while the market value data from the Official Daily List of the Nigerian Stock Exchange (NSE). The Least Square Dummy Variable (LSDV) regression technique was adopted for data analysis. The results based on the differential intercept of 0.06 in favour of stand-alone banks and the p-value of the dummy variable of 0.798 and interactive variables of 0.497, 0.887, and 0.239 at 0.05 level of significance indicate presence of but statistically insignificant variation in the value relevance of accounting information between the two types of DMBs. The paper concludes that the variation in value relevance between these bank categories is not as a result of their characteristics but the quality of and level of compliance with accounting standards. It is therefore, recommended that the regulatory authorities (SEC and CBN) should ensure the total implementation and compliance with the requirements of IFRS which is widely argued will have a strong influence on the financial reporting quality including promoting value relevance.
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Keywords
Value Relevance, Accounting Information, Variation, Deposit Money Banks