IFRS and Secrecy: Assessing Accounting Value Relevance Across Africa

32 Pages Posted: 9 Sep 2016

See all articles by David Hillier

David Hillier

University of Strathclyde - Department of Accounting and Finance

Allan Hodgson

University of Queensland - Faculty of Business, Economics and Law; Financial Research Network (FIRN)

Shaban Ngole

Institute of Finance Management

Date Written: October 2016

Abstract

We examine the value relevance of accounting across several African countries and test whether IFRS improved the value association of earnings and equity book values. We report a stronger valuation association between accounting and stock prices in African countries classified as having a secrecy culture. This increases after IFRS and more so for earnings. On the other hand, IFRS induced a stronger increase in the book value coefficient in the less secretive and more developed South African market. We surmise that the more conceptual focus of IFRS induced an increased demand for higher‐quality accounting professionals, which had a filtering‐down effect of improving quality information flow and breaking down the secrecy culture. Our research highlights the diverse impacts of IFRS and the role of culture, asset markets and accounting professionalism, in driving the relevance of accounting components across Africa.

Suggested Citation

Hillier, David and Hodgson, Allan C. and Ngole, Shaban, IFRS and Secrecy: Assessing Accounting Value Relevance Across Africa (October 2016). Journal of International Financial Management & Accounting, Vol. 27, Issue 3, pp. 237-268, 2016. Available at SSRN: https://ssrn.com/abstract=2836755 or http://dx.doi.org/10.1111/jifm.12043

David Hillier (Contact Author)

University of Strathclyde - Department of Accounting and Finance ( email )

Curran Building
100 Cathedral Street
Glasgow G4 0LN
United Kingdom
44 0141 330 4809 (Phone)
44 0141 330 4442 (Fax)

Allan C. Hodgson

University of Queensland - Faculty of Business, Economics and Law ( email )

4072 Brisbane, Queensland
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Shaban Ngole

Institute of Finance Management ( email )

Shaaban Robert Street
Dar es Salaam, Dar es Salaam
Tanzania

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