Search results

1 – 4 of 4
Click here to view access options
Article
Publication date: 1 February 2012

Faisal S. Alanezi, Mishari M. Alfaraih, Eyad A. Alrashaid and Saad S. Albolushi

The purpose of this paper is to examine the use of a dual‐audit/joint‐audit process and the level of compliance with IFRS in listed Kuwaiti financial institutions.

Downloads
1036

Abstract

Purpose

The purpose of this paper is to examine the use of a dual‐audit/joint‐audit process and the level of compliance with IFRS in listed Kuwaiti financial institutions.

Design/methodology/approach

An OLS‐regression model was used to test the relationship among dual‐audit/joint‐audit process and the level of compliance with IFRS‐disclosure. The sample was based on 33 firm observations in 2006.

Findings

The main results reveal that financial institutions audited by dual‐auditors were more compliant with IFRS‐required disclosure than financial institutions audited by joint‐auditors.

Research limitations/implications

The authors have assumed that the work done by both auditors is as per the Central Bank of Kuwait (CBK) circular which obligates both auditors to do their fieldwork independently and then consolidate their work before issuing the final audit report. In the authors’ opinion, it is less likely that both auditors will not comply with CBK regulation, especially because CBK has the right to ban a non‐compliant audit firm from auditing banks. The authors did not ask audit firms whether they are complying with this circular because it was believed that audit firms would not disclose a non‐compliance issue with regulators to outsiders.

Practical implications

This paper provides empirical evidence about the effectiveness of using dual‐auditors in promoting compliance with IFRS‐disclosure.

Originality/value

To the authors’ knowledge, this is the first study to explore the association between the levels of compliance with IFRS‐disclosure and the dual/joint audit process in the financial institutions listed on the Kuwait Stock Exchange.

Details

Journal of Economic and Administrative Sciences, vol. 28 no. 2
Type: Research Article
ISSN: 1026-4116

Keywords

Click here to view access options
Article
Publication date: 20 March 2019

Hesham I. Almujamed and Mishari M. Alfraih

The study of developed capital markets suggests that information provided in financial statements has lost its value relevance to equity holders. The purpose of this paper…

Abstract

Purpose

The study of developed capital markets suggests that information provided in financial statements has lost its value relevance to equity holders. The purpose of this paper is to explore this issue in the emerging market of Qatar.

Design/methodology/approach

Following other studies in the literature, the study examines the value relevance of earnings and book values using the price valuation model provided by Ohlson (1995). A total of 215 observations were collected from all firms listed on the Qatari Stock Exchange over a period of five years (2012–2016).

Findings

This study suggests that the value relevance of both earnings and book values has noticeably decreased over the sample period. However, its results show that the decline in the value relevance of earnings favored book values.

Research limitations/implications

Like other studies, this one has limitations that suggest areas for future research. For example, in Qatar, like other emerging markets, a lack of data prevents the performance of deep analysis. Additionally, the authors only use Ohlson’s (1995) model as a framework for evaluation. It would be interesting to explore the changes when examining alternative valuation models. Another limitation is that the authors examine only two accounting measures: earnings and book values. Further research could explore changes in the value relevance of other measures, such as cash flow.

Practical implications

These findings provide empirical evidence regarding the value relevance of earnings and book values in an emerging market.

Originality/value

To the authors’ knowledge, this paper provides the first empirical evidence regarding the value relevance of earnings and book values in the emerging capital market of Qatar.

Details

EuroMed Journal of Business, vol. 14 no. 1
Type: Research Article
ISSN: 1450-2194

Keywords

Click here to view access options
Article
Publication date: 13 August 2021

Anubha Srivastava and Harjum Muharam

The authors aim to examine the association between earnings and book values with stock prices in India during the IFRS convergence period because, in India, the literature…

Abstract

Purpose

The authors aim to examine the association between earnings and book values with stock prices in India during the IFRS convergence period because, in India, the literature is yet to investigate more about IFRS convergence and its impact on the financial reporting environment. Hence, the purpose of this study is to assess the influence of IFRS conversion on the value relevance of accounting information throughout the IFRS conversion period.

Design/methodology/approach

The current paper endeavors to investigate the earnings and book values affiliation with stock prices in India during the IFRS convergence period by employing a price valuation model (Ohlson’s Model). The study assembled a total of 3,440 firm-year observations from the National Stock Exchange in India over five years, which signifies the IFRS conversion period (2015–2019).

Findings

The research findings displayed that accounting information such as earnings, book value has value relevance throughout the IFRS enforcement period; however, the value relevance has been increasing for earnings and showing a descending association for book value. The significant explanatory power of earnings reveals that market participants give more weightage to earnings than book values. Overall, the findings of the study will facilitate improved decision making for both, capital market participants and regulators, by highlighting the key areas for improvement in the Indian capital market.

Research limitations/implications

This study also extends a discussion on the subject in those economies where regulations are weak and the market is imperfect with asymmetrical information.

Practical implications

The research outcome provides for empirical shreds of evidence regarding the value relevance of accounting information during IFRS enforcement in India, where IFRS is a recent emergence.

Social implications

This paper examines the value relevance of accounting information during IFRS convergence period in India which will felicitate improved decision making for both, market regulators and investors.

Originality/value

This research is the first factual documentation regarding value relevance of earnings and book value during the IFRS enforcement process in India with the most recent data and contributes to the limited study conducted in developing nations like India.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 5
Type: Research Article
ISSN: 1985-2517

Keywords

Click here to view access options
Article
Publication date: 14 August 2017

Erick Rading Outa, Peterson Ozili and Paul Eisenberg

The purpose of this paper is to examine the relative value relevance of accounting information arising from the adoption of converged and revised International Accounting…

Downloads
1058

Abstract

Purpose

The purpose of this paper is to examine the relative value relevance of accounting information arising from the adoption of converged and revised International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) in East Africa.

Design/methodology/approach

The research applies “same firm year” design for identification of the effects of changes in accounting standards. A model similar to Ohlson’s price model and random-effects GLS are used to estimate R2 of the regressions of share prices on book values and earnings.

Findings

The results show that accounting information prepared from revised and converged IAS/IFRS display higher value relevance and also increased following the revision and convergence of IAS/IFRS. The cross-product term is more significant in the post-revision/convergence period thus providing further evidence for increased value relevance after the revision of IAS/IFRS. The results are robust to various models and show that value relevance in East Africa is relatively lower than that of the developed markets.

Originality/value

The current study provides empirical evidence that value relevance increases with converged/revised IAS/IFRS based on quasi natural experimental setting in East Africa. The authors also extend the debate on whether value relevance is relevant in emerging markets, which are regarded as imperfect markets with few regulations, weak enforcement and limited sources of information. The results may be useful to accounting preparers, regulators, investors, standard setters and countries seeking to adopt IAS/IFRS in developing countries.

Details

Journal of Accounting in Emerging Economies, vol. 7 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

1 – 4 of 4