Accounting Numbers and Stock Prices in the Nigerian Stock Market

Adetula Dorcas Titilayo ； Obigbemi Imoleayo Salako ； Owolabi Folashade ； Nwobu Obiamaka

《Journal of Accounting and Auditing Research & Practice》 2016卷 (2016/12) Pp. 60-72

https://doi.org/10.5171/2016.252697

摘要

This research is motivated to study the extent to which accounting information summarizes stock prices in Nigerian stock market as an indicator of value relevance. Piece of accounting data is termed value relevant if it is significantly related to the dependent variable, which may be expressed by the stock price. The methods used for gauging information contents of various accounting numbers were Ordinary Least Squared (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). The findings show that there is a significant relationship between accounting information and share prices of companies listed on the Nigerian Stock Exchange. Dividends are the most widely used accounting information for investment decisions in Nigeria, followed by earnings and net book value. The study therefore recommends that the firms should improve the quality of earnings as manipulated earnings (of which dividends are sub-sets) have large effects on share prices. The paper also recommends that all companies listed on the Nigerian Stock Exchange should prepare Simplified Investor's Summary Accounts (SISA) with emphasis on the most widely used accounting information along the required mandatory detailed financial statements to suit Nigerian peculiarities. The study's findings and recommendations may be of use to National Standard Setters, preparers of accounting information, Nigerian Stock Exchange Regulators, investors and other emerging stock market.

關鍵字

Value Relevance ； Accounting Information ； Investors ； Financial Statement