ارزش مربوطه استانداردهای بین المللی گزارشگری مالی: شواهد تجربی در بازار نوظهور

This study examines the value relevance of accounting information under International Financial Reporting Standards (IFRS) in the Abu Dhabi Stock Exchange (ADX, henceforth). Based on models developed by Easton and Harris (1991), and Ohlson (1995) and using monthly market data from 2000 to 2006, this paper investigates the value relevance of accounting information of firms traded on the ADX. Our overall results show that earnings scaled by beginning of period price are positively and significantly related to cumulative returns and that earnings per share and book value per share are positively and significantly related to price per share. We also find that value relevance of accounting information has changed since the market inception in 2000. The results documented herein extend the literature on value relevance accounting information in an emerging market that requires the use of IFRS. The study therefore contributes to the debate over the mandatory adoption of IFRS and the value relevance of accounting information reported under IFRS.

This study examines the value relevance of accounting information produced under International Financial Reporting Standards (IFRS) in an emerging market that mandates the use of IFRS by its listed firms.1 There has been considerable debate over the value relevance of accounting information prepared under IFRS. The goal of establishing IFRS is to develop an internationally acceptable set of high quality financial reporting standards. The International Accounting Standards Committee (IASC) and its successor, the International Accounting Standards Board (IASB), have issued principle-based standards (Barth, Landsman, & Lang, 2008). Barth, Beaver, and Landsman (2001) show that firms with high quality accounting have a stronger association between stock prices and earnings and book value because higher earnings quality better reflects a firm's economic condition. Barth et al. (2008) indicate that accounting standards that reduce opportunistic behavior result in accounting earnings that have high value relevance as documented by Ewert and Wagenhofer (2005). However, IFRS may also lead to lower quality and thus, less value relevance of accounting information if the standards fail to report on firm's economic position and performance (Barth et al., 2008 and Soderstrom and Sun, 2007). Existing studies show conflicting evidence on the value relevance of accounting information provided under International Accounting Standards (IAS)/IFRS versus domestic Generally Accepted Accounting Principles (GAAP). Studies show earnings and book value are more value relevant under IFRS than domestic GAAP (e.g. Barth et al., 2008, Bartov et al., 2005 and Liu and Liu, 2007), while other studies find contrary evidence (e.g. Hung & Subramanyam, 2007). Moreover, Barth et al. (2008), Daske, Hail, Leuz, and Verdi (2008), Soderstrom and Sun (2007), and Ali and Hwang (2000) report interdependence between accounting standards and the country specific factors and individual firm's incentives that possibly result in different economic consequences of financial reporting standards. Therefore, this study examines empirically the value relevance of accounting information under IFRS in an emerging market in one country, the United Arab Emirates (UAE). Examining the value relevance of accounting information under IFRS in an emerging market is interesting because investors in emerging markets have very limited information available. Thus we expect that publicly available accounting information is value relevant (Liu & Liu, 2007). Firms traded on the Abu Dhabi Stock Exchange (ADX) are subject to the United Arab Emirates Securities and Commodities Authority (ESCA2) regulations as well as to the ADX laws. Prior studies show some evidence of the IFRS enforcement level in the UAE market (Al-Shammari, Brown, & Tarca, 2008). In addition, there is conflicting evidence about market efficiency in the UAE market (e.g. Ebid, 1990, Moustafa, 2001, Moustafa, 2004 and Squalli, 2006) that potentially affects the value relevance of accounting information in this market (Abdel-Khalik, Wong, & Wu, 1999). The ADX laws and regulations require all domestic firms listed to file their financial statements under IFRS. The ADX also requires listed firms to have audited financial statements including auditor's reports stating whether the firm's financial statements are in compliance with IFRS. Al-Shammari et al. (2008) indicate that the average level of compliance with IFRS in the GCC region has increased over time (1996–2002). They show that UAE has high compliance level because enforcement bodies (government agency, exchange, or central bank) check compliance and this enforcement monitoring has increased in recent years. The laws also enforce auditors' quality by requiring professional training and by requiring that directors and officers can be prosecuted for noncompliance (Al-Shammari et al., 2008). In addition, the UAE market depends heavily on banks and financial institutions as a main source of funding. This feature can make accounting information less value relevant because banks can obtain the information they need to assess firms' ability to repay debt (Ali & Hwang, 2000). Therefore, the ADX is an interesting setting to examine the value relevance of accounting. We examine value relevance of accounting information under IFRS using the pooled sample and year-by-year subsamples. Due to data unavailability, we do not test pre- and post-IFRS adoption, but rather the association between accounting information and market data where accounting information is prepared using IFRS. We use two well-known models in accounting literature: the returns–earnings models of Easton and Harris (1991) and price–earnings models of Ohlson (1995). We use monthly data matching approach of Fama and French (1992). The results show an association between earnings level and earnings change and returns of firms trading on the ADX. The price–earnings models also provide evidence on value relevance of accounting information. Overall, the results show that in this emerging market, the accounting information produced under IFRS is value relevant. The results also show that this relationship has changed over time as the market became more developed and during periods of bullish and bearish trends. The study contributes to the existing literature in two ways. First, the ESCA laws and ADX rules require full compliance with IFRS for all domestic listed firms. Moreover, these regulations require registered independent public accountants to state compliance (or lack thereof) with IFRS in their audit reports (IASB, 2008). Therefore, the study contributes to the existing debate over accounting information value relevance under IFRS using under-researched one country-emerging market data. Using one-country data allows us to compare firms that are subject to the same political, social and economic factors that affect their operations. Second, the study examines the value relevance of accounting information under IFRS in an emerging market that is presently attracting a large amount of equity. In the past, international investors have had limited interest in pursuing investing opportunities in the UAE due to imposed restrictions on foreign stock ownership, the lack of common accounting standards and corporate transparency, or simply because of economic and political uncertainties. However, even under equity ownership restrictions, there is increasing evidence of heightened international investors' interest in the ADX. In a speech by Tom Healy, chief executive officer of the ADX in 2008, he stated clearly that international investors come second (after local investors) in terms of dollar value holdings ($5 billion) or 26.30% of total share holding value outstanding as of mid 2008. Moreover, the ADX has entered into agreements with other Gulf Cooperation Council (GCC) stock exchanges, Tokyo Stock Exchange, NYSE Euronext and other exchanges to encourage cross-listing and to increase institutional foreign investments.3 From another perspective, international investors may find these emerging markets an attractive investment opportunity because of potential risk diversification in the GCC (Abraham, Seyyed, & Al-Elg, 2001). The study progresses as follows: Section 2 provides brief background information about the ADX, Section 3 provides the literature review and hypothesis development, Section 4 presents our research methodology and sample selection, Section 5 presents our results, and Section 6 provides summary and conclusion.

The objective of this study is to examine the value relevance of accounting information reported under IFRS in the UAE financial market. Using a sample of firms traded on the ADX, we show that the relevance of accounting information produced under IFRS has changed since the market inception in 2000. We follow Kothari and Zimmerman (1995) by using both price and returns models and testing regression coefficients and the adjusted R-squared. We document evidence on the positive association between accounting information and market values in the pooled sample. We also show that as the ADX market developed, the value relevance of accounting information has improved until 2005. In years 2005 and 2006, a period of a bearish market is characterized by rumors and investors' speculations, and accounting information reported under IFRS seem to have less value relevance. In addition, we show that the size of the firm and its type of auditor affect the value relevance of accounting information in the ADX market. Our results show that accounting information reported under IFRS may not be value relevant in periods of bearish trends. More regulations and enforcements have to take place in order for investors to trust and use the reported accounting numbers. The study supports the regulatory initiative of compliance and enforcement of IFRS and the need to implement transparent financial reporting and governance systems so that market movements are better associated with accounting information and are based less on speculations and rumors. In addition, the results have some implications on the market efficiency as tested by prior studies (e.g. Moustafa, 2004 and Squalli, 2006). El-Gazzar and El-Sadek (2001) showed that prices lead earnings in the emerging Egyptian market, which suggests that investors learn about earnings from other sources prior to its disclosure. This theory is supported by moderate reactions to earnings announcements. Anecdotal evidence further supports the idea that investors get earnings information from other sources (often not reliable, i.e. rumors) and this may explain further the results documented here. The results documented, however, are limited to the sample firms included. Although our sample is representative of the ADX, inclusion or exclusion of firms is evolving over time, especially because the market is thin for shares outstanding of particular firms and the listing of new firms over time may affect the reported results. Moreover, employing stronger governance mechanisms with the goal of higher quality financial reporting and transparency may make the results documented herein change during periods when these mechanisms become effective and are enforced. Future studies are needed to examine post-corporate governance reform periods and periods when IFRS is further enforced in this emerging market. Moreover, the UAE market includes DFM. Due to data availability, DFM is not examined in this study. As such, future studies may be guided toward comparing the ADX and DFM. Other GCC country markets and GCC countries are pursuing economic reforms similar to the European Union. In addition, the field needs additional analysis to incorporate other variables, e.g. beta and growth proxies, in order to establish the value relevance of accounting information under IFRS in this market, as data become available.