Year: 2009
Type: article
Abstract: Value relevance research empirically investigates the usefulness of accounting information to stock investors.Accounting information is denoted as value relevant if there is a statistical association between the accounting numbers and market values of equity.This review provides a comprehensive study of the value relevance literature.The review focuses mainly on high-quality value relevance research from the last two decades, but it also covers seminal studies from the late 1960s.The primary focus is on research on U.S. financial data, but some international evidence is also presented.The articles are generally selected from top accounting journals.The review offers an introduction to the methodology employed within this research tradition and presents the main results from studies regarding the value relevance of the two summary measures used in financial reports, namely, earnings and book equity.Furthermore, the review describes studies on the development in value relevance over time and shows how value relevance from different accounting methods can be compared.Overall, the review provides in-depth information on the value relevance literature to readers who wish to familiarise themselves with this line of empirical accounting research.
Source: The Open Business Journal
Author: Leif Atle Beisland
Institution: University of Agder
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
Funder: Universitetet i Agder
OpenAlex ID: W2002531671