Value Relevance of Accounting Information and Non-accounting Information: Evidence from Oman

Abstract

This study examines the value relevance of accounting information (AI) and non-accounting information (NAI) of listed non-financial firms in an emerging market; namely, Oman, for the period 2010-2019 using the Ohlson (1995) model. The ordinary least squares, generalized least squares (GLS), fixed effects and feasible GLS were used to test the hypotheses of the study. The results of the study show that the value relevance of earnings per share (EPS) is higher than that of book value (BV) and operating cash flow (OCF) in the Omani capital market. The results support the argument of the conceptual framework for financial reporting (2018) that earnings are the most relevant AI. The results also show that the combination of AI (i.e. EPS) and NAI (i.e. corporate social responsibility (CSR)) is more value relevant than the combination of BV, EPS, OCF and CSR. The study concludes that investors perceive that firms give less weight to OCF and BV in their investment decisions. The important contribution of this study is that it finds that the increase in the value relevance of EPS and the decrease in the value relevance of OCF, BV and CSR should be a concern for new investors in developing their investment decision making in the Omani capital market.