IMPACT OF COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ON VALUE RELEVANCE

Authors

  • Iftikhar Ali Janjua Assistant Professor
  • Muhammad Aksar Senior Lecturer
  • Sheeba Zafar Assistant Professor

DOI:

https://doi.org/10.52567/pjsr.v5i01.1023

Abstract

The main objective of this research is to highlight the usefulness of the accounting figures produced as a result of compliance with all the mandatory disclosure requirements of financial reporting standards for investors in making their investment decisions. Top five companies from every sector listed on Pakistan Stock Exchange, apart from the financial services sector are studied for the years 2006-2016. An item-based index is created to calculate the compliance score for every selected firm and is regressed on the returns of every firm using the extended Returns model to estimate the impact of compliance with IFRSs/IASs’ mandatory disclosure requirements on value relevance. Results show significant figures for Earnings, Changes in Earnings and Compliance index while the control variables of extended returns model, namely Profitability, Size and Industry, show insignificant results. This study is aimed at assisting regulatory bodies to strengthen their policies toward compliance with financial reporting laws to safeguard the interests of investors.

Key Words: IFRS Compliance, Mandatory Disclosure Requirements, Value Relevance  

 

Author Biographies

  • Iftikhar Ali Janjua, Assistant Professor

     

    Department of Accounting and Finance, Capital University of Science and Technology Islamabad, Pakistan.

     

     

     

  • Muhammad Aksar, Senior Lecturer

     

    Department of Accounting and Finance, Capital University of Science and Technology Islamabad, Pakistan.

     

  • Sheeba Zafar, Assistant Professor

     

     Department of Management Sciences, Shifa Tameer-e-Millat University, Islamabad, Pakistan.

     

     

Additional Files

Published

2023-03-31

How to Cite

[1]
“IMPACT OF COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ON VALUE RELEVANCE”, Pak. J, Soc. Sci., vol. 5, no. 01, pp. 419–430, Mar. 2023, doi: 10.52567/pjsr.v5i01.1023.