The moderating effects of family and state ownership on value relevance of accounting information in Malaysia

Firm value represents the economic worth of a firm. It is a good indicator of investor perception about a firm’s prospect. Many factors influence firm value; one of the most influencing factors is accounting information. Therefore, unbiased accounting information is of the utmost importance. Otherwi...

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Main Author:	Mirza, Aboubakar
Format:	Thesis
Language:	eng eng eng eng
Published:	2019
Subjects:	HF5601-5689 Accounting
Online Access:	https://etd.uum.edu.my/9211/1/s900728_01.pdf https://etd.uum.edu.my/9211/2/s900728_02.pdf https://etd.uum.edu.my/9211/3/s900728_references.docx https://etd.uum.edu.my/9211/5/depositpermission_s900728-Aboubakar%20Mirza.pdf
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id	my-uum-etd.9211
record_format	uketd_dc
spelling	my-uum-etd.92112022-04-24T01:02:21Z The moderating effects of family and state ownership on value relevance of accounting information in Malaysia 2019 Mirza, Aboubakar Abdul Hamid, Mohamad Ali Tunku Puteri Intan Safinaz School of Accountancy (TISSA) Tunku Puteri Intan Safinaz School of Accountancy (TISSA) HF5601-5689 Accounting Firm value represents the economic worth of a firm. It is a good indicator of investor perception about a firm’s prospect. Many factors influence firm value; one of the most influencing factors is accounting information. Therefore, unbiased accounting information is of the utmost importance. Otherwise, it will be considered irrelevant for decision-making by investors and will result in lower value relevance (firm value) of accounting information. The primary accounting information earning is losing value relevance due to the managerial manipulation practices by the Malaysian listed firms. Investors are now relying more on other accounting information for decision-making. According to agency theory, concentrated ownership is the most significant factor that determines the value relevance of accounting information. The value relevance research has paid more attention to concentrated ownership and overlooked the unique agency context of concentrated family and state ownership, a common phenomenon in Malaysia. Therefore, this study investigates value relevance of earning, book value of equity, and cash flow from operations. Due to inconsistencies in prior studies, the moderating role of family and state-ownership on the value relevance of earning, book value of equity, and cash flow from operations are also examined. The sample of 607 public listed companies were used to test the hypotheses over the period 2012-2016. Using Prais-Winsten (PCSE) multivariate regression, this study finds that earning, book value of equity, and cash flow from operations are value relevant, and family ownership moderates the value relevance of earning, book value of equity, and cash flow from operations. State ownership only moderates the value relevance of book value of equity and cash flow from operations. These results have theoretical implications for the alignment and entrenchment hypotheses of the agency theory and practical implications for the regulators to improve investors’ perception regarding quality of accounting information. 2019 Thesis https://etd.uum.edu.my/9211/ https://etd.uum.edu.my/9211/1/s900728_01.pdf text eng public https://etd.uum.edu.my/9211/2/s900728_02.pdf text eng public https://etd.uum.edu.my/9211/3/s900728_references.docx text eng public https://etd.uum.edu.my/9211/5/depositpermission_s900728-Aboubakar%20Mirza.pdf text eng staffonly other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng eng
advisor	Abdul Hamid, Mohamad Ali
topic	HF5601-5689 Accounting
spellingShingle	HF5601-5689 Accounting Mirza, Aboubakar The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
description	Firm value represents the economic worth of a firm. It is a good indicator of investor perception about a firm’s prospect. Many factors influence firm value; one of the most influencing factors is accounting information. Therefore, unbiased accounting information is of the utmost importance. Otherwise, it will be considered irrelevant for decision-making by investors and will result in lower value relevance (firm value) of accounting information. The primary accounting information earning is losing value relevance due to the managerial manipulation practices by the Malaysian listed firms. Investors are now relying more on other accounting information for decision-making. According to agency theory, concentrated ownership is the most significant factor that determines the value relevance of accounting information. The value relevance research has paid more attention to concentrated ownership and overlooked the unique agency context of concentrated family and state ownership, a common phenomenon in Malaysia. Therefore, this study investigates value relevance of earning, book value of equity, and cash flow from operations. Due to inconsistencies in prior studies, the moderating role of family and state-ownership on the value relevance of earning, book value of equity, and cash flow from operations are also examined. The sample of 607 public listed companies were used to test the hypotheses over the period 2012-2016. Using Prais-Winsten (PCSE) multivariate regression, this study finds that earning, book value of equity, and cash flow from operations are value relevant, and family ownership moderates the value relevance of earning, book value of equity, and cash flow from operations. State ownership only moderates the value relevance of book value of equity and cash flow from operations. These results have theoretical implications for the alignment and entrenchment hypotheses of the agency theory and practical implications for the regulators to improve investors’ perception regarding quality of accounting information.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Mirza, Aboubakar
author_facet	Mirza, Aboubakar
author_sort	Mirza, Aboubakar
title	The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
title_short	The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
title_full	The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
title_fullStr	The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
title_full_unstemmed	The moderating effects of family and state ownership on value relevance of accounting information in Malaysia
title_sort	moderating effects of family and state ownership on value relevance of accounting information in malaysia
granting_institution	Universiti Utara Malaysia
granting_department	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
publishDate	2019
url	https://etd.uum.edu.my/9211/1/s900728_01.pdf https://etd.uum.edu.my/9211/2/s900728_02.pdf https://etd.uum.edu.my/9211/3/s900728_references.docx https://etd.uum.edu.my/9211/5/depositpermission_s900728-Aboubakar%20Mirza.pdf
_version_	1747828547635904512

The moderating effects of family and state ownership on value relevance of accounting information in Malaysia

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