Application of Panel Data Approach to Comparing the Relevant and Incremental Information Content of Accounting Variables before and After Implementing the National Accounting Standards

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Abstract. The main purpose of financial reporting is representing useful information for users to help them make the conscious economic decisions and finally do the best resource allocation. This goal is achieved through representing relevant and reliable information. This information is realized by the observance of accounting standards requirements and regulations. In Iran this matter has begun by setting national accounting standards since 1999 and binding in 2001. The present study is comparing the relevant and incremental information content of accounting variables before and after implementing the national accounting standards in a period covering eight years (1997-2004) which includes four years before and four years after binding the standards). The research sample contains 123 firms and the dependent variable is the stock market value and the independent variables include net income, stock book value and operational cash flows (as a proxy of financial statements). The multivariate regression is used to analyze the data. Using panel data and measuring the changing effect of operational cash along with net income and stock book value and applying Z voung test has made this study different with other domestic researches. The results show that after implementing the national accounting standards the relevant information content of accounting variables and the incremental information content of book value has been developed.


National Accounting Standards, relevant information content, Incremental Information Content

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