Value relevance of accounting and Non-Accounting information

Abstract

This study investigates the value relevance of accounting and non-accounting information in the Colombo Stock Exchange, with a view to determining whether accounting information and non-accounting information has the ability to capture data that affect share prices of companies listed on the Colombo Stock Exchange. The required accounting information and non-accounting information are obtained through banks annual reports and data library published by Colombo Stock Exchange. Value Relevance is examined by partially replicating and modifying Ohlson's Value Relevance Model. The Regression analysis is used for evaluating information content of various accounting numbers and non-accounting information. The results revealed that accounting information of BVPS and OCFPS has strong positive correlation with Share Price. And also, it revealed that the non-accounting information of Local number of shareholders, Market Capitalization and Age of the Company has strong positive correlation with Share Price. So, Not only accounting information and non-accounting information but also other factors that affect changes in share prices, future study can include impact of other information sources like rumour, insider trading and noise among others on share prices.