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Title: Decision-usefulness of accounting information to equity investors of firms listed on the Amman Stock Exchange : an empirical investigation
Author: Africano, Beatriz Elena
Awarding Body: University of Sunderland
Current Institution: University of Sunderland
Date of Award: 2013
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This study examines the decision-usefulness of financial information produced in the external financial reports from the implementation of the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) to equity investors of the Amman Stock Exchange (ASE) in their investment decision-making process. The study employs mixed method research that uses quantitative and qualitative methods. The quantitative research methodology employs archival financial data from the ASE using inferential statistics to investigate the association between share market prices and a well known model, the residual earnings model, derived from (Preinreich 1938, Ohlson (1995) Feltham and Olson (1995)). Data is collected from companies listed on the ASE for the period before implementation of the IAS/IFRS, 1980-1989, and for the period after implementation, 1991-2009. In general, the results indicate a statistical association between share market prices and book value per share (BVPS) and residual earnings per share (REPS) with the BVPS robust to share market prices. The second quantitative method employs questionnaires administered to individual and institutional equity investors of the ASE. Key findings indicate that equity investors believe the implementation of the IAS/IFRS produces decision-useful financial information, that the accounting information has the useful qualitative characteristics proposed by the International Accounting Standards Board and that the price-to-book ratio, the dividend discount model and the price-earnings multiple are very useful models as inputs into their investment decision-making process. Semi-structured interviews were conducted to accounting, auditing and ASE experts in Jordan. Prevalent findings indicate that developments within the ASE and accounting profession have influenced the decision-usefulness of financial information. Few believed that Jordan should develop its own accounting standards. This research contributes to knowledge, being the first comprehensive study that employs a mixed method research using archival financial data for a 29-year study period from the ASE and primary data to evaluate the decision-usefulness of financial information produced from implementing the IAS/IFRS. Furthermore, this research fills a gap in the literature by examining the period before IAS/IFRS implementation and the period after implementation in Jordan to determine if IAS/IFRS implementation resulted in decision-useful financial information. The main implication of this research is that reported financial information has greater decision-usefulness after the implementation of the IAS/IFRS than before, implying positive effects of accounting standard-setting in an emerging economy.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Accounting and Finance