Management Science Letters (Dec 2019)

Measuring the effect of disclosure quality of integrated business reporting on the predictive power of accounting information and firm value

  • Magdy Abdul Hakim Melegy,
  • Alaa Mohamad Malo Alain

DOI
https://doi.org/10.5267/j.msl.2019.11.019
Journal volume & issue
Vol. 10, no. 6
pp. 1377 – 1388

Abstract

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This paper measures the effect of disclosure quality of integrated business reports on the predictive power of accounting information and firms’ value in the Egyptian Stock Market. In order to achieve the research objectives, the research relies on content analysis approach in examining the annual reports of the companies listed in the Egyptian Stock Exchange from 2015 to 2018. The study depends on measuring the independent variable i.e. disclosure quality of the integrated business reports on building up a disclosure index consisting of 45 items in 8 groups equally weighted, whereas; dependent variables which represents the predictive power of accounting information measured by adopting three different methodologies; namely Accounting Conservatism, Share Prices, and Discretionary Accruals. Concerning to firm value, the study uses Tobin’s Q model to measure the relationship between the quality disclosure of the integrated business reports and the firm value. The results indicate that the quality disclosure of integrated business report leads to increase accounting conservatism and share prices, whereas the statistics analysis reports a negative effect towards discretionary accruals indicating that the quality disclosure of integrated business report leads to decrease in discretionary accruals.

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