ICARE 2018

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/19607

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Author: search.filters.author.Karunarathna, W.V.A.D.Subject: search.filters.subject.Value relevance

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    The Value Relevance of Accounting Information: A Comparison between Published Interim and Annual Financial Statements
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Weerasinghe, P.S.M.; Karunarathna, W.V.A.D.
    Main objective of the accounting information is providing useful information to stakeholders of the entity. Current and prospective investors are the most important users of such information. Public Listed Companies in the stock market use financial statement as one of the main medium of communication with their stakeholders. Value relevance can be defined as the ability of information disclosed by financial statement to capture and summarize firm value. Investors predict future performance through existing accounting information. When the economy changes time to time investors need to be referred timely information for the investment decision making. If the investors depend on outdated information, investment decision will become inappropriate and ineffective. On the other hand, investors can obtain the short-term financial progress from the interim quarterly financial statements and also they can use audited annual financial reports after completing the accounting year. Therefore, the purpose of this study is to distinguish the value relevance between interim financial statements and the audited annual financial statements in Sri Lanka context. The study is based on 35 listed manufacturing companies in the Colombo Stock Exchange (CSE) for the period of 2012 to 2017. The relevant data were gathered from the published interim financial report, audited annual financial statement and publish research articles. Earnings per share, book value per share, dividend per share and return on equity are use as key independent variables. Data were analyzed using correlation and regression analysis through E-views software. The results show that the interim financial statement appear to have higher value relevance than annual financial statement and value relevance of accounting 4th International Conference for Accounting Researchers and Educators 61 information has the significant impact on share price and value relevance of accounting information is significantly correlated with the share price
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    The Impact of International Financial Reporting Standards Adoption on the Value Relevance of Accounting Information: Evidence from the Public Listed Manufacturing Companies in the Colombo Stock Exchange in Sri Lanka
    (4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Athukorala, A.S.P.; Karunarathna, W.V.A.D.
    The purpose of this study is to investigate the impact of International Financial Reporting Standard (IFRS) adoption on the value relevance of accounting information in Sri Lanka and also the study has made a comparison between the value relevance of accounting information in pre- and post- adoption periods of IFRS. Sri Lanka has adopted Sri Lanka Financial Reporting Standards (SLFRS) which is almost aligned with the IFRS with effect from 1st January 2012 onwards. This study employs Ohlson (1995) price regression model to explain value relevance of accounting information. It explains market value per share (MPS) using earning per share (EPS) and book value of equity per share (BVEPS). The pre-IFRS period consist of 5 years from 2007 to 2011, and the post-IFRS period is 5years from 2012 to 2016. The sample comprises 28 firms and 280 firm-year observations. There are many studies available on IFRS adoption internationally. However, there is no clear evidence that IFRS adoption enhances the quality of accounting information pertaining to Sri Lankan context. Mainly the data were analyzed by using multiple regression model and correlation analysis. Results of the study showed that value relevance of accounting information has not significantly improved in the post- IFRS period than the pre-IFRS period. Further studies are encouraged to conduct by expanding the sample size and incorporating more accounting quality measurement indicators.