IFRS and the evolution of value relevance: evidence from an African developing country

Yuveshna Gowry, Teerooven Soobaroyen*, Ushad Subadar Agathee

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Purpose: This study aims to assess the evolution of the value relevance of book value, earnings and its components in Mauritius, an African developing country, focusing on value relevance changes after International Financial Reporting Standards (IFRS) adoption and subsequent local reforms. Design/methodology/approach: The study relies on a data set of 567 firm-year observations (2001–2018) and the Ohlson valuation model to investigate value relevance after IFRS adoption, the implementation of institutional reforms and enforcement reforms. Findings: Firstly, the authors find support for a rise in the combined value relevance of earnings and book value, albeit that book value significantly contributes to changes over time. The findings highlight the combined importance of IFRS adoption with institutional and enforcement reforms to improve value relevance. Secondly, the authors do not find evidence of a shift in value relevance between earnings and book value. Third, the cash flow model reveals a higher level of significance relative to the earnings model. Originality/value: The authors extend the value relevance literature in the context of African developing countries. The present findings underpin the need for a reinforcing of relevant institutional and enforcement frameworks to ensure the benefits of IFRS adoption materialise. The findings also offer a contribution of how developing countries’ experience IFRS post-adoption while adding to the dearth of studies analysing IFRS enforcement practices.

Original languageEnglish
JournalJournal of Financial Reporting and Accounting
Early online date20 Apr 2023
Publication statusE-pub ahead of print - 20 Apr 2023


  • Africa
  • Developing country
  • International Financial Reporting Standards
  • Value relevance


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