Universal Journal of Accounting and Finance Vol. 12(4), pp. 95 - 108
DOI: 10.13189/ujaf.2024.120401
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Value Relevance of Accounting Information of Quoted Manufacturing Firms: The Moderating Role of Low-Quality Governance in Nigeria

Ndubuisi Odoemelam ^*, Henry O. Wobo
Department of Accounting, Faculty of Management Sciences, University of Port Harcourt, Nigeria

ABSTRACT

Purpose: This study investigates the importance of earnings in Nigeria and focuses on the impact of low-quality governance (LQG) on the relationship between earnings per share (EPS) and stock prices. Design/Methodology/Approach: The study uses a quantitative approach, applying the OLS regression model to financial data from manufacturing companies listed on the Nigerian Exchange Group (NGX). Key variables include EPS, BVPS, and dimensions of LQG, such as the average composite of the rule of law, regulatory quality, control of corruption (ACRRC), audit quality (AFS), government effectiveness (GovEc), and political stability (PolStab). Findings: The results show that EPS and BVPS positively correlate with share prices; however, this relationship is significantly weakened by poor rule of law, regulation, control of corruption (ACRRC), and political instability (PolStab). Conversely, audit quality (AFS) and government effectiveness (GovEc) positively and significantly enhance this relationship. Research Limitation/Implication: The study is limited to manufacturing firms listed on the NGX, which may affect the generalizability of the findings to other contexts. Practical Implications: The findings suggest that policymakers should enhance governance frameworks to improve the reliability of financial reporting. Corporate managers should focus on robust governance practices to increase financial transparency, and investors should consider governance quality in their investment decisions. Originality/Value: The study's originality lies in its detailed analysis of the governance dimensions index (ACRRC, AFS, PolStab, and GovEC) and their moderating effects on the relationship between EPS and stock prices in Nigeria's manufacturing sector from 2006 to 2022. This research offers valuable insights for stakeholders.

KEYWORDS
Value Relevance, Accounting Earnings, Low-quality Governance, Emerging Markets, Share Price

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Ndubuisi Odoemelam , Henry O. Wobo , "Value Relevance of Accounting Information of Quoted Manufacturing Firms: The Moderating Role of Low-Quality Governance in Nigeria," Universal Journal of Accounting and Finance, Vol. 12, No. 4, pp. 95 - 108, 2024. DOI: 10.13189/ujaf.2024.120401.

(b). APA Format:
Ndubuisi Odoemelam , Henry O. Wobo (2024). Value Relevance of Accounting Information of Quoted Manufacturing Firms: The Moderating Role of Low-Quality Governance in Nigeria. Universal Journal of Accounting and Finance, 12(4), 95 - 108. DOI: 10.13189/ujaf.2024.120401.