Value relevance in assessing the quality of financial reports: A systematic literature review
DOI:
https://doi.org/10.20414/jed.v5i3.8112Keywords:
value relevance, quality financial report, systematic literature reviewAbstract
Purpose — The purpose of this research is to identify trends in capital market publications across different scientific fields, such as economics, finance, and accounting. The focus is on exploring value relevance research for assessing the performance of company financial statements.
Method — This study employs a systematic literature review method to identify and analyze trends in value relevance research over the past 9 years, gathered from the Emerald Group and Science Direct databases. The research dataset consists of 31 articles, all of which underwent bibliometric and content analysis.
Result — We discovered that the majority of value relevance research in the Asian region was concentrated in China. The theoretical framework employed was valuation theory, complemented by the methodological approach of ordinary least squares. The type of value relevance investigated was relative association study. This classification has significant potential for future research utilization. The results indicate that investors are willing to invest in companies located in the Asian region based on assessments of the value relevance of their financial statements.
Contribution — This research makes a comprehensive academic contribution to the future trend of value relevance publications, particularly within the field of economic and investment research in Southeast Asia. The methodology employed in this study is the systematic literature review, a method rarely utilized for examining financial statements through the lens of value relevance.
Downloads
References
Afsheena, & Santhakumar, S. (2020). Timeliness and persistence of conservative earnings in an emerging market. Journal of Financial Reporting and Accounting, 18(3), 483–503. https://doi.org/10.1108/JFRA-12-2018-0116
Al-Hares, O. M., AbuGhazaleh, N. M., & Haddad, A. E. (2012). Value relevance of earnings, book value and dividends in an emerging capital market: Kuwait evidence. Global Finance Journal, 23(3), 221–234. https://doi.org/10.1016/j.gfj.2012.10.006
Alfraih, M. M. (2017). The value relevance of intellectual capital disclosure: empirical evidence from Kuwait. Journal of Financial Regulation and Compliance, 25(1), 22–38. https://doi.org/10.1108/JFRC-06-2016-0053
Almujamed, H. I., & Alfraih, M. M. (2019). Value relevance of earnings and book values in the Qatari Stock Exchange. EuroMed Journal of Business, 14(1), 62–75. https://doi.org/10.1108/EMJB-02-2018-0009
Barth, M. E., & Beaver, W. H. (2000). The Relevance of the Value Relevance Literature For Financial Accounting Standard Setting?: Another View. Journal of Accounting and Economics, 31(1), 77–104. https://doi.org/10.1016/S0165-4101(01)00019-2
Chamisa, E., Mangena, M., & Ye, G. (2012). Relative Value?Relevance of Accounting Measures based on Chinese Accounting Standards and International Financial Reporting Standards. Journal of Accounting in Emerging Economies, 2(2), 162–187. https://doi.org/10.1108/2042116
Chauhan, Y., & Kumar, S. B. (2019). The value relevance of nonfinancial disclosure: Evidence from foreign equity investment. Journal of Multinational Financial Management, 52–53, 100595. https://doi.org/10.1016/j.mulfin.2019.100595
Choi, J. S., & Nam, J. A. (2019). Does managerial discretion affect the value relevance of goodwill impairment information under IFRS? Korean evidence. Asia-Pacific Journal of Accounting and Economics, 27(1), 1–23. https://doi.org/10.1080/16081625.2020.1686813
Dedyansyah, A. F., Pujiningsih, S., & Maharani, S. N. (2021). The Impact of IFRS Adoption on the Quality of Accounting Information: Sytematic Literature Review. Oblìk ì Fìnansi, 04(94), 5–15. https://doi.org/10.35248/2472-114x.19.7.195
Dosamantes, C. A. D. (2013). The Relevance of Using Accounting Fundamentals in the Mexican Stock Market. Journal of Economics, Finance and Administrative Science, 18(S), 2–10. https://doi.org/10.1016/S2077-1886(13)70024-6
Elshandidy, T. (2014). Value Relevance of Accounting Information: Evidence from an Emerging Market. Advances in Accounting, 30(1), 176–186. https://doi.org/10.1016/j.adiac.2014.03.007
Frendy, & Semba, H. D. (2016). Does Recycling Improve Information Usefulness of Income? The Case of Japan. Asian Review of Accounting, 8(1), 83–105. http://www.emeraldinsight.com/doi/10.1108/eb060722
Harasheh, M., Amaduzzi, A., & Darwish, F. (2020). The relevance of valuation models: insights from Palestine exchange. International Journal of Islamic and Middle Eastern Finance and Management, 13(5), 827–845. https://doi.org/10.1108/IMEFM-08-2019-0367
Higgins, J. P. ., Thomas, J., Chandler, J., Cumpston, M., Li, T., Page, M. ., & Welch, V. . (2019). Cochrane Handbook for Systematic Reviews of Interventions (Second). Wiley-Blackwel.
Isaboke, C., & Chen, Y. (2019). IFRS Adoption , Value Relevance and Conditional Conservatism?: Evidence From China. Accounting & Information Management, 27(4), 529–546. https://doi.org/10.1108/IJAIM-09
Kumari, P., & Mishra, C. S. (2020). Value relevance of aggregated and disaggregated earnings in India: Significance of intangible intensity. Journal of International Accounting, Auditing and Taxation, 39, 100321. https://doi.org/10.1016/j.intaccaudtax.2020.100321
Kwon, G. (2018). Comparative Value Relevance of Accounting Information among Asian Countries?: Focusing on Korea , Japan , and China. Managerial Finance, 1–31. https://doi.org/10.1108/MF-07-2017-0261
Lam, K. C. K., Sami, H., & Zhou, H. (2013). Changes in the value relevance of accounting information over time: Evidence from the emerging market of China. Journal of Contemporary Accounting and Economics, 9(2), 123–135. https://doi.org/10.1016/j.jcae.2013.06.001
Mirza, A., Malek, M., & Abdul-Hamid, M. A. (2019). Value relevance of financial reporting: Evidence from Malaysia. Cogent Economics and Finance, 7(1), 1–19. https://doi.org/10.1080/23322039.2019.1651623
Nijam, H. M., & Jahfer, A. (2018). Ifrs adoption and value relevance of accounting information: Evidence from a developing country. Global Business Review, 19(6), 1416–1435. https://doi.org/10.1177/0972150918794571
Ohlson, J. A. (2001). Earnings, Book Values, and Dividends in Equity Valuation: An Empirical Perspective. Contemporary Accounting Research, 18(1), 107–120. https://doi.org/10.1506/7TPJ-RXQN-TQC7-FFAE
Omran, M., & Tahat, Y. A. (2020). Does institutional ownership affect the value relevance of accounting information? International Journal of Accounting and Information Management, 28(2), 323–342. https://doi.org/10.1108/IJAIM-03-2019-0038
Qu, X., & Zhang, G. (2015). Value-relevance of Earnings and Book Value Over the Institutional Transition in China: The Suitability of Fair Value Accounting in This Emerging Market. International Journal of Accounting, 50(2), 195–223. https://doi.org/10.1016/j.intacc.2013.01.009
Shamki, D., & Rahman, A. A. (2013). Does financial disclosure influence the value relevance of accounting information? Education, Business and Society: Contemporary Middle Eastern Issues, 6(3), 216–232. https://doi.org/10.1108/EBS-05-2013-0014
Srinivasan, P., & Narasimhan, M. . (2012). The value relevance of consolidated financial statements in an emerging market: The case of India. Asian Review of Accounting, 20(1), 58–73. http://dx.doi.org/10.1108/ARA-11-2013-0076
Swarnapali, R. N. C. (2019). Sustainability disclosure and earnings informativeness: evidence from Sri Lanka. Asian Journal of Accounting Research, 5(1), 33–46. https://doi.org/10.1108/AJAR-05-2019-0033
Tahat, Y., Dunne, T., Fifield, S., & Power, D. (2016). The value relevance of financial instruments disclosure: Evidence from Jordan. Asian Review of Accounting, 24(4), 445–473. https://doi.org/10.1108/ARA-11-2014-0115
Veltri, S., & Silvestri, A. (2020). The Value Relevance of Corporate Financial and Nonfinancial Information Provided by the Integrated Report: A Systematic Review. Business Strategy and the Environment, 29(8), 3038–3054. https://doi.org/10.1002/bse.2556
Wang, Z., Ali, M. J., & Al-Akra, M. (2013). Value relevance of voluntary disclosure and the global financial crisis: Evidence from China. Managerial Auditing Journal, 28(5), 444–468. https://doi.org/10.1108/02686901311327218
Wu, Hsieh, W. T., Yu, C. C., & Chu, H. T. (2016). Value relevance of financial statements in convergence with IFRS: analyses in the abnormal pricing error method. Applied Economics Letters, 24(7), 490–493. https://doi.org/10.1080/13504851.2016.1205714
Downloads
Published
Issue
Section
License
Copyright (c) 2023 Achmad Farid Dedyansyah, Maria Arista Ulfa
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
