Vol. 19, N°2 (2024)

103

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The Impact of adopting IFRS on the value relevance of accounting information: Evidence from the Saudi Exchange Market

Résumé

The global acceptance of International Financial Reporting Standards (IFRS) has encouraged many developing countries to adopt these standards, following the lead of developed nations. Despite this widespread adoption, the debate continues on whether IFRS enhances the quality of accounting information. Since 2017, the Saudi Organization for Certified Public Accountants (SOCPA) has mandated the adoption of IFRS for Saudi companies, marking a significant shift in their financial reporting practices. This study investigates whether the relevance of accounting information improved following the adoption of IFRS among listed companies in the Saudi market. Utilizing the Price Model and the Return Model, the study assesses how much investors rely on accounting information in their decision-making processes. It compares the pre- and post-IFRS adoption periods, covering a sample of 91 companies from 2013 to 2020, thus including four years before and four years after IFRS adoption. The results are mixed: the relevance of book value of equity and earnings per share did not increase post-IFRS adoption, while the relevance of operating cash flows improved in the Price Model. Conversely, the relevance of earnings increased in the Return Model post-IFRS adoption. These findings suggest that the adoption of IFRS has led to a partial and significant improvement in the relevance of accounting information.

Comment citer cet article

Abrar Raja Aljohani & Ahmad Alslman (2024), " The Impact of adopting IFRS on the value relevance of accounting information: Evidence from the Saudi Exchange Market", International Journal of Management And Technologies Journal, Vol.19, N°2, pp:135-166