The usefulness of accounting information; evidence from the Egyptian market

The usefulness of accounting information; evidence from the Egyptian market Purpose – The purpose of this paper is to ascertain financial analysts' views regarding the usefulness of a number of items of accounting information via a postal survey. This usefulness is explored in the context of the Egyptian capital market. In addition the usefulness of different types of information is researched, namely: historical vs forward‐looking information; mandatory vs voluntary information; and quantitative vs non‐quantitative information. Design/methodology/approach – This paper uses descriptive analysis to investigate the views of a sample of 23 financial analysts regarding a number of items of accounting information. Analysts' ratings are obtained via a postal questionnaire, most of which are collected by hand. Fifteen out of 23 responses are collected in person, which offer the opportunity to ask follow‐up questions about the information which the analysts see as valuable. Findings – The findings indicate that different items of information are valued differently. In the context of the Egyptian market, financial analysts tend to value: mandatory disclosure more than voluntary disclosure; quantitative information more than non‐quantitative information; and historic information more than forward‐looking information. This type of preference reflects the information environment in Egypt, where mandatory disclosure is comprehensive and detailed based on International Accounting Standards but where compliance is an issue. Voluntary disclosure is limited and other sources of information are less common. Since mandatory information in Egypt tends to be historic and quantitative in nature, this may explain the preference for these types of disclosures. Research limitations/implications – The findings suggest that the importance of different types of information may be affected by the degree of maturity of the market and how rich the information environment is. Practical implications – The results should be useful in informing companies and market regulators about the types of information that financial analysts find useful for investment decision making and the areas of disclosure where financial analysts suggest that improvement is needed. Originality/value – This paper contributes to the literature by investigating the views of a sample of financial analysts regarding the usefulness of accounting information and different types of disclosure in the context of an emerging capital market where a dearth of studies exist. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Financial Markets Emerald Publishing

The usefulness of accounting information; evidence from the Egyptian market

Loading next page...
 
/lp/emerald-publishing/the-usefulness-of-accounting-information-evidence-from-the-egyptian-6Wpvxd8o1Z
Publisher
Emerald Publishing
Copyright
Copyright © 2009 Emerald Group Publishing Limited. All rights reserved.
ISSN
1755-4179
DOI
10.1108/17554170910997393
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to ascertain financial analysts' views regarding the usefulness of a number of items of accounting information via a postal survey. This usefulness is explored in the context of the Egyptian capital market. In addition the usefulness of different types of information is researched, namely: historical vs forward‐looking information; mandatory vs voluntary information; and quantitative vs non‐quantitative information. Design/methodology/approach – This paper uses descriptive analysis to investigate the views of a sample of 23 financial analysts regarding a number of items of accounting information. Analysts' ratings are obtained via a postal questionnaire, most of which are collected by hand. Fifteen out of 23 responses are collected in person, which offer the opportunity to ask follow‐up questions about the information which the analysts see as valuable. Findings – The findings indicate that different items of information are valued differently. In the context of the Egyptian market, financial analysts tend to value: mandatory disclosure more than voluntary disclosure; quantitative information more than non‐quantitative information; and historic information more than forward‐looking information. This type of preference reflects the information environment in Egypt, where mandatory disclosure is comprehensive and detailed based on International Accounting Standards but where compliance is an issue. Voluntary disclosure is limited and other sources of information are less common. Since mandatory information in Egypt tends to be historic and quantitative in nature, this may explain the preference for these types of disclosures. Research limitations/implications – The findings suggest that the importance of different types of information may be affected by the degree of maturity of the market and how rich the information environment is. Practical implications – The results should be useful in informing companies and market regulators about the types of information that financial analysts find useful for investment decision making and the areas of disclosure where financial analysts suggest that improvement is needed. Originality/value – This paper contributes to the literature by investigating the views of a sample of financial analysts regarding the usefulness of accounting information and different types of disclosure in the context of an emerging capital market where a dearth of studies exist.

Journal

Qualitative Research in Financial MarketsEmerald Publishing

Published: Oct 2, 2009

Keywords: Accounting information; Capital markets; Financial analysis; Egypt

References

  • Disclosure level and the cost of equity capital
    Botosan, C.A.
  • A study of the consensus on disclosure among public accountants and security analysts
    Chandra, G.
  • An analysis of brokers and analysts unpublished forecasts of UK stock returns
    Dimson, E.; Marsh, P.
  • The extent of financial disclosure and its determinants in an emerging capital market: the case of Egypt
    Hassan, O.; Giorgioni, G.; Romilly, P.
  • Investment in Central and Eastern European equities: an investigation of the practices and viewpoints of practitioners
    Middleton, C.A.J.; Fifield, S.G.M.; Power, D.M.
  • Accounting information, value relevance, and investors behavior in the Egyptian equity market
    Ragab, A.A.; Omran, M.M.
  • Social disclosure, financial disclosure and the cost of equity capital
    Richardson, A.J.; Welker, M.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off