RELEVANCE OF ACCOUNTING INFORMATION TOWARDS SHARE PRICES OF JAKARTA ISLAMIC INDEX (JII) LISTED COMPANIES

Fitri Utami; Slamet Haryono; Abdurrahman Niarman

doi:10.31958/imara.v5i1.2710

RELEVANCE OF ACCOUNTING INFORMATION TOWARDS SHARE PRICES OF JAKARTA ISLAMIC INDEX (JII) LISTED COMPANIES

Fitri Utami, Slamet Haryono, Abdurrahman Niarman

Abstract

Accounting information has an important role in describing the condition and performance of a company. However, some investors have not fully used accounting information in sorting out share purchases. This study examines the relevance of accounting information to share prices in companies listed on the Jakarta Islamic Index (JII) for the period 2015 to 2020. The accounting information used is Earnings per Share (EPS), Book Value (BV), Return On Equity (ROE), Net Profit Margin (NPM), and Current Ratio (CR). With the panel data regression analysis method, the researcher found that collectively all accounting information (EPS, BV, ROE, NPM and CR) were stated to have relevance value in explaining their effect on stock prices. Individually, only BV and ROE have relevance value in influencing stock prices. As for EPS, NPM and CR have no value relevance to the share price of companies listed on the Jakarta Islamic Index (JII) for the period 2015 to 2019

Keywords

Relevance, Information Accounting, Stock Price

Full Text:

PDF

References

A, A., & Omran, R. M. (2006). Accounting information, value relevance, and investors’ behavior in the Egyptian equity market. Review of Accounting and Finance, Vol. 5 Iss 3, 279-297.

Ahmadi, A., & Bouri, A. (2018). The accounting value relevance of earnings and book value: Tunisian banks and financial institutions. International Journal of Law and Managemen.

Arkan, T. (2016). The Importance of Financial Ratios in Predicting Stock Price Trends:A Case Study in Emerging Markets. Finanse, Rynki Finansowe, Ubezpieczenia , 13-26.

Ayzer, B., & Cema, I. (2013). Effects of new financial report standards on value relevance. A study of Turkish stock markets. International Journal of Economics and Finance.Vol.5, No.10, 10-13.

Badu, B., & Appiah, K. O. (2018). Value relevance of accounting information: an emerging country perspective. Journal of Accounting & Organizational Change.

Bagherzadeh, M. R., Safania, S., & Roohi, M. (2013). Relationship between Current ratio and Share Price – a study on NSE, INDIA (2009-2012). Int Jr. of Mathematical Sciences & Applications, Vol.3, No.1, 163-167.

Barth, M. E., & Landsman, W. R. (2001). The Relevance Of The Value Relevance Literature For Financial Accounting Standard Setting: Another View. Journal of Accounting and Economics Vol.31, 77-104.

Bayrakdaroglu, A., Mirgen, C., & Kuyu, E. (2017). RELATIONSHIP BETWEEN PROFITABILITY RATIOS AND STOCK PRICES: AN EMPIRICAL ANALYSIS ON BIST-100. Istanbul Finance Congress (IFC) (pp. 1-10). Turkey: Press Academia Procedia.

Blankespoor, E., Dehaan, E., Wertz, J., & Zhu, C. (2019). Why Do Individual Investors Disregard Accounting Information? The Roles of Information Awareness and Acquisition Costs. Journal of Accounting Research, Vol. 57 No. 1, 53-84.

Chen, B., Kurt, A. C., & Wang, I. G. (2020). Accounting comparability and the value relevance of earnings and book value. The Journal of Corporate Accounting & Finance, 1-17.

Chukwu, G. J., Damieibi, I. J., & Okoye, E. I. (2019). Firm-Specific Attributes and theValue Relevance of Accounting Information in Nigeria . International Journal of Business and Management; Vol. 14, No. 10, 12-20.

Farhood, S. B. (2019). Reflection The Level of Disclosure on the Accounting Informastion Relevant Using Standards and Poor's Indicators. Academy of Accounting and Financial Studies Journal, Vol. 23, Issue.2, 1-24.

Figlioli, B., Lemes, S., & Lima, F. G. (2020). In search for good news: The relationship between accounting information, bounded rationality and hard-to-value stocks. Journal Elsevier, 1-23.

Hung, D. N., Ha, H. T., & Binh, D. T. (2018). Impact of Accounting Information on Financial Statements to the Stock Price of the Energy Enterprises Listed on Vietnam’s Stock Market. International Journal of Energy Economics and Policy, Vol. 8, No.2, 1-6.

Mostafa, W. (2016). The value relevance of earnings, cash flows and book values in Egypt. Management Research Review, Vol. 39 .

Naveed, M., Ali, S., Iqbal, K., & Sohail, M. K. (2020). Role of financial and non-financial information in determining individual investor investment decision: a signaling perspective. South Asian Journal of Business Studies Vol. 9 No. 2, 261-278.

Obaidat, A. N. (2016). The Value Relevance of Accounting Information in Emerging Stock Exchange Markets "Case of Jordan". Research Journal of Finance and Accounting, Vol.7, No.12., 184-196.

Rasool, N., & Ullah, S. (2019). Financial literacy and behavioural biases of individual investors:empirical evidence of Pakistan stock exchange. Journal of Economics, Finance and Administrative Science.

Shao, S., Stoumbos, R., & Zhang, X. F. (2019). The power of accounting information in explaining stock returns . 1-55.

Sherman, E. H. (2015). A Manager's Guide to Financial Analysis : Powerful Tools for Analyzing the Numbers and Making the Best Decisions for Your Business. Sixth Edition . Amerika Serikat: AMA : American Management Association.

www.idx.co.id. (n.d.).

DOI: http://dx.doi.org/10.31958/imara.v5i1.2710