Relevance Of Accounting Information on Investors Decision in Turbulence Times: Evidence From Manufacturing Firms In Nigeria

Abstract

This study examined the relevance of accounting information on investors’ decision in turbulence times: evidence from manufacturing firms in Nigeria. This research work was necessitated by the fact that manufacturing firms on the Nigerian Stock Exchange has undergone many turbulent times caused by the outbreak of Coronavirus disease 2019 (COVID-19) around the world, causing an unprecedented global public and economic crisis. The pandemic has created an unprecedented crisis with momentous challenges on investors in quoted manufacturing firms with volatile stock prices. This study therefore adopted an ex-post facto research design as it relied on secondary source of data extracted from the annual reports of five quoted manufacturing firms and daily stock prices for these companies were sourced from the Nigerian Stock Exchange for the period of five years (2017-2021). The population for this study was the five manufacturing firms listed on the Nigerian Stock Exchange. These are Nestle Nigeria plc.,Viju Industries Nigeria Limited, Dufil Prima Foods, Livestock Feeds Plc and Flour Mills of Nigeria Plc.Data from the annual report were basically drawn from the statement of comprehensive income and statement of financial position. The data collected for this study were analyzed using multiple regression analysis to test the research relationshipsat 0.05 level of significance.The results of cross section fixed effect model show that accounting information has a strong positive significant impact on stock price and earnings per share. It was therefore concluded that since poor accounting information has been found as one of the causes of stock price volatility, it is therefore the responsibility of management to ensure proper preparation and presentation of accounting information to enable potential investors make economic and investment decisions, as this will lead to less volatile stock price. This study recommends that proper regulation of accounting information should be put into place as accounting information has the ability to cause either an increase or decrease in the stock price of a company.

Keywords:Accounting Information, Investors, Turbulence, Manufacturing Firms.

DOI: 10.7176/RJFA/14-16-08

Publication date:August 31^st 2023