VALUE RELEVANCE OF EARNINGS AND BOOK VALUE: A COMPARATIVE ANALYSIS BETWEEN BIG4 AND NON-BIG4 AUDITED LISTED FIRMS IN NIGERIA

Abstract

This study empirically examined the comparative value relevance of earnings and book value between big4 and non-big4 audited listed firms in Nigeria. The study covered 161 listed firms for the period 2014 -2019. However, an adjusted population of 154 firms was used with aid of a filter. The study employed quantitative data extracted from the annual reports of the sampled firms and the study aligns itself to positivist paradigm. Data were analyzed based on multiple regression technique with the aid of STATA, and the study revealed that both EPS and BVP are value relevant in both models. However, EPS and BVP in the first model are more value relevant. On the whole, the study found that accounting information of firms audited by Non-Big4 audit firms is more value relevant than that audited by Big4 audit firm. Thus, the study recommends inter-alia that regulatory authorities such as CBN and SEC should ensure that firms engage the service of audit firms not necessarily the Big4 audit firms as this helps improve the credibility of the report.

Keywords

• Accounting information
• earnings per share
• book value per share
• Big4 Audit firms
• Non-Big4 Audit firms