Gowry, Yuveshna and Soobaroyen, Teerooven and Subadar-Agathee, Ushad (2023) IFRS and the Evolution of Value Relevance : Evidence from an African Developing Country. Journal of Financial Reporting and Accounting. DOI https://doi.org/10.1108/jfra-07-2022-0252
Gowry, Yuveshna and Soobaroyen, Teerooven and Subadar-Agathee, Ushad (2023) IFRS and the Evolution of Value Relevance : Evidence from an African Developing Country. Journal of Financial Reporting and Accounting. DOI https://doi.org/10.1108/jfra-07-2022-0252
Gowry, Yuveshna and Soobaroyen, Teerooven and Subadar-Agathee, Ushad (2023) IFRS and the Evolution of Value Relevance : Evidence from an African Developing Country. Journal of Financial Reporting and Accounting. DOI https://doi.org/10.1108/jfra-07-2022-0252
Abstract
This study aims to assess the evolution of the value relevance of book value, earnings and its components in Mauritius, an African developing country, focusing on value relevance changes after IFRS adoption and subsequent local reforms. The study relies on a dataset of 567 firm-year observations (2001-2018) and the Ohlson (1995) valuation model to investigate value relevance after (i) IFRS adoption, (ii) the implementation of institutional reforms, and (iii) enforcement reforms. First, we find support for a rise in the combined value relevance of earnings and book value, albeit that book value significantly contributes to changes over time. The findings highlight the combined importance of IFRS adoption with institutional and enforcement reforms to improve value relevance. Second, we do not find evidence of a shift in value relevance between earnings and book value. Third, the cash flow model reveals a higher level of significance relative to the earnings model. We extend the value relevance literature in the context of African developing countries. Our study’s findings underpin the need for a reinforcing of relevant institutional and enforcement frameworks to ensure the benefits of IFRS adoption materialise. It also offers a contribution of how developing countries’ experience IFRS post-adoption while adding to the dearth of studies analysing IFRS enforcement practices.
Item Type: | Article |
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Uncontrolled Keywords: | Africa; Developing country; International Financial Reporting Standards; value relevance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 01 Mar 2023 12:41 |
Last Modified: | 16 May 2024 21:42 |
URI: | http://repository.essex.ac.uk/id/eprint/34909 |
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