VALUE RELEVANCE OF ACCOUNTING INFORMATION IN NIGERIAN FIRMS

ABSTRACT

This study examined the value relevance of accounting information in Nigerian firms. To achieve the objectives of this research, an ex-post facto research design was employed in the study, secondary data was retrieved from the financial statements of 20 nonfinancial service companies listed on the Nigerian Exchange group (NGX) for a period of 11 years spanning from 2012-2022. The ordinary least squares regression method (OLS) was adopted to make the statistical decisions. The findings of the research reveal that there is a significant positive relationship between the dependent variable, share price (MSP) and some of the independent variables namely, earnings per share (EPS), dividends per share (DPS), operating cashflows (OCF). However there was no significant relationship between share price and book value per share (BVPS). The study concludes that accounting variables namely, EPS, DPS and OCF have significant impact on the share price of xi Nigerian firms. The study recommends that Nigerian firms should prioritize transparent and accurate financial reporting, with a specific emphasis on earnings, dividends, and operational cash flow. This will not only enhance investor confidence but also contribute to the overall stability of the financial market.