The Relevance of Accounting Information Issued by Palestinian Listed Companies on Palestine Exchange
An-Najah National University
The main objective of this study was to investigate the value relevance of accounting information (i.e. book value of equity per share, earnings per share, operating cash flow per share and cash dividends per share) to the market value of equity per share and how this relevance affected by the month in which market value is sampled, using Ohlson (1995)’s model. The sample of the study included all companies (15 companies) listed on Al-Quds Index of the Palestine Exchange (PEX) . Two components of the value relevance were examined: confirmatory value measured by coincident relevance and predictive value measured by forecast relevance. The data were collected from PEX website (secondary data), regression is used for analysis (the panel analysis robustness standard errors). Results of the study indicated that a variation in value relevance between accounting information and share prices did exist. Furthermore, the ability of earnings per share and book value of equity per share to affect market value per share was found to be higher than operating cash flow and cash dividends per share. Further, there were forecast and coincident relevance between accounting information and market value of share. However, the forecast relevance was higher than the coincident relevance. The study recommends that companies give more interest to earnings per share and book value of equity and their disclosures because investors largely depend on them when pricing the shares.