Effect of IFRS on Value Relevance of Accounting Information: Evidence from Quoted Manufacturing Firms in Nigeria

This study evaluated the extent to which value relevance of financial information in Nigerian manufacturing firms has improved after the implementation of International Financial Reporting Standards (IFRS). Specifically, the study intended to: Ascertain the extent the adoption of IFRS has significantly improved the book value per share of manufacturing companies in Nigeria; Determine the extent the adoption of IFRS has significantly improved the Earnings Per Share of manufacturing companies in Nigeria and Examine the extent the adoption of IFRS has significantly improved the cash flow of manufacturing companies in Nigeria. Ex-post facto research design was adopted for the study. A sample of 54 manufacturing companies was randomly selected from manufacturing companies quoted on the Nigerian Stock Exchange for the periods of 20082015. Data for the study were obtained from the annual reports and accounts of the sampled companies. Specifically, a modified price model for detecting value relevance of accounting data for two different periods was employed. Regression Analysis and Chow test statistical tools were used to analyze and validate the data with aid of SPSS version 20.0. The study found that the adoption of IFRS has improved the book value per share, market share price, Earnings Per Share and cash flow of manufacturing companies in Nigeria. The implication of findings is that the value relevance of accounting information of manufacturing companies is more sensitive during Post-IFRS era than the Pre-IFRS era. The findings also imply that the book value per share, market price, earnings and cash flow have become informative to equity investors in determining the value of firms following IFRS adoption. The study recommends among other things that the accounting information for book value per share should be communicated to the investing public; and such information should be of high quality to avoid negative consequences on the part of investors. KEYWORD: Value relevance, accounting information, manufacturing companies INTRODUCTION Value relevance research is being motivated by the fact that listed firms use financial statements as one of the major medium of communication with their shareholders and public at large. Markets usually depend on financial reports prepared by the Management of such firms (Khanna, 2014). Barth, Cram and Nelson, (2001) believe that for making the financial reporting to be effective, information contained in the financial reports should be relevant and reliable. Information is considered to be relevant when it influences the users’ decisions to form predictions or help in confirming or correcting the past evaluations, while, it is considered reliable if it can be depended upon to faithfully represent the transactions or events that it aims to represent without any undue error or bias (FASB, 1978). Bello (2009), believes that accounting is an information infrastructure used by economic units to achieve various economic decisions. Corporate organizations use accounting to communicate to all stakeholders about their operating performance and position at a particular time period. The value of a firm is based on what the market perceives about its performance, and accounting International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 @ IJTSRD | Available Online @ www.ijtsrd.com | Volume – 2 | Issue – 5 | Jul-Aug 2018 Page: 2256 disclosures provide the essential information so as to form the basis of such perception. Many studies have examined the value relevance of earnings per share (EPS), book value of equity per share (BVPS), and cash flows. Such studies have reported that earnings and book values have significant information content for equity valuation of a firm (Holthousen and Watts, 2001; Choi and Jang, 2006; Kwon, 2009). A review of international reports published since 1970 examining the purpose of accounting information and content, indicates that the focus is on the needs of external users and the decision usefulness of accounting information. In the last decade, accounting literature has focused increasingly on examining the value relevance of accounting information (Adaramola & Oyerinde, 2014). The dynamic nature of the environment in which accounting operates led to the development of different methods of wealthcreation in each emerged environment through time. These environments according to Lamberg (2004) include agriculture, industrial and information era; each wealth-creation method was served with appropriate accounting model in order to produce relevant accounting information for economic decisions. Sibel, (2013) opine that accounting information contained in financial statements is expected to be useful for decision makers. In order to provide this, financial statements should meet some basic characteristics. “If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable” (CFFR, 2010). Inherent in the profession of accounting are rules and principles that give room for manipulations and designs by professional accountants. Hence, given the required skill and accounting acumen, two accountants could present two different profit figures from the same records and none would be considered to have erred in so far as he considers some underlying concepts in the preparation of his accounts. Advocates of fair value accounting see the key motivation in reporting all assets in the balance sheet at fair value because it is more current and perhaps more relevant (Cunningham & Harris, 2006). However, accounting traditionally measures most assets using historical cost because it is considered reliable. This serves as the basis of annual depreciation of the historic value of an asset as it is justified by its consistent burdening of income of accounting periods with the supposed equivalent contribution of the depreciated asset to the generation of such incomes. This tradition is faulted both in basis and methods. Depreciation methods are numerous and also produce different depreciation figures. This and several other examples dominate the principle and practices of accounting. The exploitation of the loopholes created by the accounting rules to generate undeserved and unwarranted benefits is referred to as designed accounting or creative accounting, also termed macro-manipulation, income smoothing, earnings management, earnings smoothing, financial engineering cosmetic accounting or window dressing (Belkaoui, 2004). Designed accounting is defined as “the opportunistically used discretion over accounting numbers with intention to mislead users of the information”. Financial reporting by companies is effected via the preparation and publication of financial statements. These financial statements are required to exhibit certain degree of quality in terms of their information contents. Maines and Wahlen (2006) and Belkaoui (2002) opine that accounting information contained in the financial reports should possess certain qualities as relevance, verifiability, understand ability, neutrality, timeliness, comparability, and completeness. When the financial reports disclose quality accounting information, Benston (2007) stated that the decision of the users (investors, management, government, employees, creditors, analysts) of the reports could as well be qualitative and informed. The users of the financial reports use the reports frequently in passing judgments on the viability of a company. Ghofar and Saraswati (2008) opined that investors in many cases are too dependent on the quality of accounting disclosure. Applied faithfully, the harm caused by the strict adherence to accounting rules could have been restricted to the relevance and reliability of the figures it produces in terms of time value of money. By extension however, the loopholes created by these rules have been exploited by fiendish accountants to perpetrate fraud and this has taken a toll on the profession as it has manifested in an upsurge of accounting scandals across the globe thereby having implications for the public confidence in the


INTRODUCTION
Value relevance research is being motivated by the fact that listed firms use financial statements as one of the major medium of communication with their shareholders and public at large. Markets usually depend on financial reports prepared by the Management of such firms (Khanna, 2014). Barth, Cram and Nelson, (2001) believe that for making the financial reporting to be effective, information contained in the financial reports should be relevant and reliable. Information is considered to be relevant when it influences the users' decisions to form predictions or help in confirming or correcting the past evaluations, while, it is considered reliable if it can be depended upon to faithfully represent the transactions or events that it aims to represent without any undue error or bias (FASB, 1978). Bello (2009), believes that accounting is an information infrastructure used by economic units to achieve various economic decisions. disclosures provide the essential information so as to form the basis of such perception. Many studies have examined the value relevance of earnings per share (EPS), book value of equity per share (BVPS), and cash flows. Such studies have reported that earnings and book values have significant information content for equity valuation of a firm (Holthousen and Watts, 2001; Choi and Jang, 2006; Kwon, 2009).
A review of international reports published since 1970 examining the purpose of accounting information and content, indicates that the focus is on the needs of external users and the decision usefulness of accounting information. In the last decade, accounting literature has focused increasingly on examining the value relevance of accounting information (Adaramola & Oyerinde, 2014). The dynamic nature of the environment in which accounting operates led to the development of different methods of wealthcreation in each emerged environment through time. These environments according to Lamberg (2004) include agriculture, industrial and information era; each wealth-creation method was served with appropriate accounting model in order to produce relevant accounting information for economic decisions. Sibel, (2013) opine that accounting information contained in financial statements is expected to be useful for decision makers. In order to provide this, financial statements should meet some basic characteristics. "If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable" (CFFR, 2010).
Inherent in the profession of accounting are rules and principles that give room for manipulations and designs by professional accountants. Hence, given the required skill and accounting acumen, two accountants could present two different profit figures from the same records and none would be considered to have erred in so far as he considers some underlying concepts in the preparation of his accounts. Advocates of fair value accounting see the key motivation in reporting all assets in the balance sheet at fair value because it is more current and perhaps more relevant (Cunningham & Harris, 2006). However, accounting traditionally measures most assets using historical cost because it is considered reliable. This serves as the basis of annual depreciation of the historic value of an asset as it is justified by its consistent burdening of income of accounting periods with the supposed equivalent contribution of the depreciated asset to the generation of such incomes. This tradition is faulted both in basis and methods. Depreciation methods are numerous and also produce different depreciation figures. This and several other examples dominate the principle and practices of accounting. The exploitation of the loopholes created by the accounting rules to generate undeserved and unwarranted benefits is referred to as designed accounting or creative accounting, also termed macro-manipulation, income smoothing, earnings management, earnings smoothing, financial engineering cosmetic accounting or window dressing (Belkaoui, 2004). Designed accounting is defined as "the opportunistically used discretion over accounting numbers with intention to mislead users of the information".
Financial reporting by companies is effected via the preparation and publication of financial statements. These financial statements are required to exhibit certain degree of quality in terms of their information contents. Maines and Wahlen (2006) and Belkaoui (2002) opine that accounting information contained in the financial reports should possess certain qualities as relevance, verifiability, understand ability, neutrality, timeliness, comparability, and completeness. When the financial reports disclose quality accounting information, Benston (2007) stated that the decision of the users (investors, management, government, employees, creditors, analysts) of the reports could as well be qualitative and informed. The users of the financial reports use the reports frequently in passing judgments on the viability of a company. Ghofar and Saraswati (2008) opined that investors in many cases are too dependent on the quality of accounting disclosure.
Applied faithfully, the harm caused by the strict adherence to accounting rules could have been restricted to the relevance and reliability of the figures it produces in terms of time value of money. By extension however, the loopholes created by these rules have been exploited by fiendish accountants to perpetrate fraud and this has taken a toll on the profession as it has manifested in an upsurge of accounting scandals across the globe thereby having implications for the public confidence in the profession.
reports to users. Palea (2013) opines that financial information influences investors' behavior with respect to portfolio selection, which in turn affects security prices and therefore, the terms on which a firm obtains additional financing. Standard setters, regulators, and policy-makers all have a vital interest in the effect of financial reporting on the economy. This interest is due to the economic consequences associated with financial information. 'Value relevance is one of the measures used in determining accounting quality' (Adebimpe & Ekwere 2015).
Nigerian Accounting Standards Board (NASB) is the first Federal agency statutorily responsible for the development and issuance of Statements of Accounting Standards (SAS) used in the preparation of financial statements in Nigeria. The NASB initially derived its powers from Section 335(1) of Companies and Allied Matters Act 1990 until the Nigerian Accounting Standards Board Act No. 22 of 2003 was enacted.
The development and adoption of the IFRS (International Financial reporting standards) is a major development across the Globe arises from the need for better comparability and relevance of accounting statements across the Globe has changed the face of financial reporting within and amongst countries (Nassar, Uwuigbe & Abuwa, 2014). The use of IFRS in preparing financial statements globally is maturing. This is not surprising given the pains associated with the low quality financial reports which witnessed an unprecedented growth in the recent past.
The move towards a unified set of accounting standards could be traced to 1993, when about 16 professional accounting bodies from Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom, and the United States established the International Accounting Standards Committee (IASC), which was later changed to the International Accounting Standards The primary goal of the IASB and its predecessor body, IASC is to evolve a globally acceptable set of high quality financial reporting standards (Okoye, 2014;Barth, Landsman and Lang, 2007). It was the primary duty of IASC to issue IASs, while the successor, the IASB issued the IFRS which included the adoption of the IASs already issued by the IASC (subsequent to amendment) (Oyedele, 2011;Barth, Langsman and Lang, 2007).
IFRS is a set of International Accounting Standard (IAS) that state how particular transactions and events should be reported in the financial statement of the companies. The standard which replace the old IAS are issued by the International Accounting Standard Board (IASB) for the purpose of making comparison as easy as possible. IFRS remains as a standard with high quality accounting reporting framework. Thus, the users of financial statements can easily compare the entity's financial information between countries in different parts of the world. Implications of adopting IFRS means adopting a global financial reporting language that would create a company globally understood financial statement (Fasina & Adegbite, 2014). To achieve full adoption of the IFRS in Nigeria, the NASB (now financial Reporting Council (FRC) established by FRC of Nigeria Act No 6, 2011) inaugurated a Roadmap Committee of Stakeholders on the adoption (Okoye, 2014).
The demand for relevant accounting disclosures by users is increasing due to the rapid growth of business environments worldwide. Businesses continue to grow with more people participating in the stock market (Kasum, 2007) and comparing financial information between firms of different countries has become significant issue to investors (Tarca, 2004).
Studies have been conducted in Nigeria to ascertain the value relevance of accounting information (Adaramola & Oyerinde, 2014, Abiodun, et al, 2012). But questions remain as to whether the relevance of accounting information has increased or decreased over time. Sami and Haiyan (2004) find that the explanatory power of earnings of stock return is very limited and consistent with the prior studies in US. Gaston, Fernadez et al, 2004) find that accounting institutional environment has a stronger positive association with value relevance of accounting earnings than legal environment. Beijer, Dekimpe, Dutordoir, and Verbeeten, et al (2008) revealed a positive relationship between dividends, book value and earnings with stock market value. Habib (Mattessich, 1989). Through fossils and records discovered not only in Jericho but other parts of the world, it can be concluded that before men knew the concept of money, the process of stewardship was known.

Reason for IFRS Adoption in Nigeria
The story of the tower of Babel signified that anything can be achieved when there is uniformity in language.
In this same vein, the evolution of accounting (seen as the language of business) strives towards "a uniform language" which is the adoption of International Financial Reporting Standards in many countries of the world. Regulation of accounting information is aimed at ensuring that users of financial statement receive a minimum amount of information that will enable them make meaningful decisions regarding their interest in a reporting entity (Jayeoba & Ajibade, 2016). Accounting standards, as explained by Okaro (2002), are authoritative statements aimed at narrowing the areas of differences and varieties in accounting practice. Accounting standards are not only seen as important regulatory devices but also act as a unifying template connecting the interest of the users of financial statement.
It will not be totally wrong to conclude that the adoption of IFRS and the enactment of the Financial Reporting Council Act, 2011 were triggered by the nation's sense of belonging since IFRS has already been embraced by over 122 countries. This sense of belonging and not feeling left out can be seen as positive when the growth and development of the nation is at stake. According to Asein (2011), it was expedient and in the best interest of the nation to raise and benchmark the quality of its financial reporting on current global best practices by adopting IFRS in order to achieve its goal of becoming one of the twenty largest economies of the world by year 2020 (vision 20:2020 goals). It can be deduced from Obazee (2011), that the move towards adopting the Today, global commerce is increasingly polarized into Multi-National Corporations (MNCs) and national companies. Clearly, financial reporting is responding to this business dynamics by following in this direction. However, most national companies do not have foreign subsidiaries while their financial statements are mainly for tax assessment purposes and possibly to provide information to local banks in order to secure credit facilities; whereas, MNCs play in different jurisdictions through their subsidiaries which prepare financial reports in compliance with various local GAAPs. This entails huge conversion costs of their financial statements during consolidation. Since these MNCs often seek finance from various capital markets, comparability of financial reports was a huge problem leading, in many cases, to inefficient and sub-optimal investment decisions (Asein, 2011).
The development and adoption of the IFRS (International Financial reporting standards) is a major development across the Globe. The operation which arises from the need for better comparability and relevance of accounting statements across the Globe has changed the face of financial reporting within and amongst countries (Phang & Mahzan, 2013). The use of IFRS in preparing financial statements globally is maturing. This is not surprising given the pains associated with the low quality financial reports which witnessed an unprecedented growth in the recent past (Isabel & Mariela, 2009).
Globalization of capital market and internationalization has come to stay. The need for harmonization of financial statements and single set of consistent high quality financial reporting standard gained wide spread acceptance amongst policies makers, standard setters and preparers (Godfrey, Hodgson, Tarca, Hamilton, & Holmes, 2010). The need for quality and uniformity in the preparation and presentation of financial statements gave birth to International Financial Reporting Standards (IFRS). Before the adoption in Nigeria, there was legal and regulatory framework of accounting in respect to preparation of financial report in Nigeria (Abdulkadir, 2013). The Company and Allied Matter Act (CAMA'90) prescribe some format and content of company financial statement disclosure requirements and auditing. It requires that the financial statement of all corporate organizations comply and adhere with the Statement of Accounting Standards (SAS) issued from time to time by the Nigerian Accounting Standard Board (NASB). This also requires that audit be carried out in accordance to with the General Auditing Standards. Therefore, the adoption of IFRS in Nigeria was launched in September, 2010 by the then Minister of Commerce and Industry. The adoption was organized in such that the entire stakeholders that prepare and present financial statement use it by the beginning of 2014. the adoption was made in such a way that all the first tier In addition, Internationalization and globalization of business has given reason for harmonized financial statement preparation and presentations (Isabel & Mariela, 2009).Companies compete globally for limited resources, shareholders, potential investor and creditors as well as multinational enterprises are required to bear the cost of adopting financial statement that are prepared using national standards (Abdulkadir, 2013). It is expected that the move towards IFRS convergence will enhance capital market performance and ginger global business expansion in Nigeria. In the view of this development all corporate organization are expected to adopt and comply with IFRS in preparation and presentation of their financial statement (Oghoma & Iyoha, 2006).
There is wide spread adoption and compliance by other country of the world. In a survey conducted by Manuel, (2008) on Spanish stock market, on how to hedge disclosures, today firms face several financial risks in their daily business activities due to global, international trading and transactions. One way to cope with this kind of risk is to use hedging because of its lower cost and good solution to solving risks in business entity (Leonard & Jan, 2012). Additionally, Inwinkl (2010) conducted a survey on reclassifications of financial instruments in Nordic countries on the effect of reclassification amendments on Nordic banks financial statement. Quantitative survey was conducted on these Nordic banks and the results are as follows. 47% of sampled Nordic banks reclassified financial instrument in 2008 and 12% in 2009. All the banks increased their net profit as a result of reclassifying their financial instrument in 2008 and 2009. On the influence of IFRS implementation on business management, the finding of the study shows that there are positive effects from the adoption of the IFRS by Finnish companies (Jonna, 2009). IFRS are seen as a comprehensive information package where the management gets improved financial information easier for their decision making and judgement. In another research conducted by Jonna, (2009) mandatory IFRS contributes and improve business environment. The study was a survey report. He also found out that after mandatory IFRS adoption, the quality of information in accounting and business environment increased significantly more for mandatory adopters.
Conclusively, IFRS is a set of International Accounting Standard (IAS) that state how particular transactions and events should be reported in the financial statement of the companies. The standard which replace the old IAS are issued by the International Accounting Standard Board (IASB) for the purpose of making comparison as easy as possible. IFRS remains as a standard with high quality accounting reporting framework. Thus, the users of financial statements can easily compare the entity's financial information between countries in different parts of the world. Implications of adopting IFRS means adopting a global financial reporting language that would create a company globally understood financial statement (Oghoma & Iyoha, 2006).The impact of inclusion of IFRS in schools and colleges curriculum will enable the potential accountants to be well trained before joining the accounting and auditing profession (Daske, Hail & Leuz, 2006).

Value Relevance of Accounting Information
Value relevance of accounting information is defined as the ability of accounting numbers contained in the financial statements to explain the stock market measures (Beisland, 2009). In other words, value relevance is being defined as the ability of information disclosed by financial statements to capture and summarize firm value. Value relevance can be measured through the statistical relations between information presented by financial statements and stock market values (returns).
A business enterprise specifically a company is a conscious, deliberate and purposeful creation for satisfying the domain of aspiration of the society at large. It is an independent and a separate legal entity (Tharmila & Nimalathasan, 2013).
Vishnani and Shah, (2008) value relevance" implies ability of the financial information contained in the financial statements to explain the stock market measures. A value relevant variable is that data or amount in the financial statement that guide investors in their pricing of shares. Investment decision, therefore, centres on the association between stock returns or share price and accounting related information such as earnings, cash flows, book value of equity, firm's size.
Value relevance refers to the capacity of information to influence the decision making process of users. The users should be in a position to make predictions International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 Page: 2263 about the future with the available information. Information in order to be relevant should be made available to the user before it loses its capacity to influence decisions and therefore it should be apt and well-timed. Not only this, information should also be reliable that is free from bias and error (Swati, 2015).
The value relevance research provides evidence as to whether accounting numbers relate to corporate value in a predicted manner (Beaver 2002). The value relevance literature explains how well accounting amounts reflect information used by equity investors, and provides insights into questions of interest to standard setters.
The value relevance research is useful to the investors and also to the accounting standard setters. The objective of value relevance research is to find the company's financial statements are providing the investors with valid, adequate and reliable accounting information or not for decision making. It provides the statistical association measures whether investors actually use the information in question in setting prices or not.
Generally, investors are not in a situation to directly assess the performance of companies in which they intend to invest. They usually depend on financial statements prepared by the management of such organization. The primary purpose of financial statements is to provide information concerning the financial situation of the company, its operational results, any changes of control in the company and cash flow (Nirmala & Florence, 2011).
The impact of financial statement information on capital markets indicators referred to as the value relevance studies and it is part of the market-based accounting stream. Information is considered 'value relevant' if stock price movements are associated with the release of such information (Utami & Noraya, 2010).
The concept of value relevance refers to the strength of relationship between accounting variables and market value of equity of a firm. This is indicated from regression analysis and the earnings response coefficient of each accounting variable in the equation. The regression result can be used to measure another important concept of financial information, its timeliness. Timeliness means having information available to decision makers before it loses its capacity to influence decisions the value relevance of financial information can also be affected by how timely that information is (Kothari and Sloan, 1992; Colins, Maydew and Weiss, 1997; . The coefficient of regression of market value on accounting numbers also indicates the timeliness of that accounting number. A value relevance study is evaluation of the relationship between accounting information and capital market values (market values). Beaver (2002) indicated that the theoretical groundwork of value relevance studies adopting a measurement approach is a combination of valuation theory plus contextual accounting and financial reporting arguments (accounting theory) that allows the researcher to predict how accounting variables and other information relating to market value will behave. Holthausen and Watts (2001) suggest that value relevance studies use two different theories of accounting and standard setting to draw inferences: (i) "direct valuation" theory and (ii) "inputs-to equityvaluation" theory. Direct valuation theory proposes a link between accounting earnings and stock market value. In direct valuation theory, accounting earnings is intended to either measure or be combined with the equity market value changes or levels.
Value relevance is the "association between accounting amounts and security values" (Barth & Beaver, 2000). The ability for financial reporting information to summarize and capture information that affects share values has been empirically tested as a statistical association between accounting and market values" and mapping from financial statements to "intrinsic" value ( employed to explore associations between the market value of equities and main financial information disclosed variables, such as book value per share (as balance sheet) and earnings per share (as income statement), other comprehensive income and cash flows.
The International Accounting Standards Committee (IASC) 1989 reported the role of accounting information to be both confirmatory and predictive to market values and accounting numbers as well as interrelated to each other. Thus, the IASB in 2010 stated that, "Financial information needs to be predictive or forecasted to have predictive value; financial report with predictive value is used by users in making their predictions". Ebaid (2012) studied influence of accounting based methods on market returns and prices and their predictive values to be considered as the value relevance of accounting disclosures. Thus, generally book value is value relevant when it can determine stock prices (Kargin, 2013). Similarly, Vishnani and Shah (2008) report that, "Value relevance" denotes power of the financial information stated in the financial reports to explain the stock market price measures.

Sig 1: Value Relevance Model
Source: Researcher's Value Relevance of Accounting Information Variables

Accounting Information Variables
According to Meyer (2007), "accounting plays a significant role within the concept of generating and communicating wealth of companies". Accounting data, such as earnings per share, is termed value relevant if it is significantly related to the dependent variable, which may be expressed by price, return or abnormal return (Gjerde, Knivsfla & Saettem, 2007). Accounting information is any data or information obtained from the accounting system of a firm whether contained in a financial statement, a special report, or verbal statement (William, 1968). However, for the purpose of this research, accounting information refers to written information contained in a complete or partial financial report -financial position or comprehensive income or fund flow statement.

Market Price per Share (MPS):
Price is the arithmetic average of monthly average closing equity prices. Some authors may prefer to use share prices prevailing on the day immediately following the cross-section year. It could, however, be argued that share prices prevailing at any one day may contain random or temporary disturbances (Marris & Singh, 1966). On the other hand, an average of monthly prices may be relatively free of temporary disturbances.
The share price of public traded company which is determined by the forces of market supply and demand is highly volatile due to its dependent on the expectations of the buyers and sellers (Menaje, 2012). O' Hara, Lazdowski, Moldovean and Samuelson (2000) find that earnings as well as dividend declared by firm are related to market prices of share. Irrespective of these accounting number that can be adopted to predict the market price, if this numbers contain some new information, reaction will always be expected in the market over the market price of share; this reaction evidence in share price is found to continually drift in the same direction as that of the initial information.

Interpretation of Market Price Per Share vs Current Trading Price
The market price per share and the current price at which the stock is being traded are not necessarily the same. The market price per share is also called the intrinsic value of a share of stock or the actual value based on the actual variables taken from the company's financial statements. The current trading price is based on investor buying and selling behavior. If investors are paying more than the intrinsic value, then the stock is overvalued. If investors are paying less than the intrinsic, then the stock is undervalued and is a good buy.

Book value per share (BV):
BV is the owners' equity over the number of shares in circulation. According to the theory , we expect a positive relationship between share prices and book value. Book value per share is determined by the researcher by dividing value of common equity by the number of shares outstanding for the respective periods.
International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 Page: 2265 Furthermore,  and Feltham and Ohlson (1995) show that under certain condition, market value of a firm can be expressed as the weighted average of book value and earnings. This form the bases of the studies conducted on the value relevance of accounting numbers. Studies in this area of research have shown that the book value of equity in addition to earnings is associated with the market value of firms. While the fundamental role of earnings in value relevance is a long settled issue in accounting literature, this cannot be said of the book value of equity (Subramanyam & Venkatachalam, 2000). The framework of the clean surplus valuation which is based on the residual income valuation model by   The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. The term "book value" is a company's assets minus its liabilities and is sometimes referred to as stockholder's equity, owner's equity, shareholder's equity, or simply equity.
Common stockholder's equity, or owner's equity, can be found on the balance sheet for the company. In the absence of preferred shares, the total stockholder's equity is used.
Book Value per Share = Total Common Shareholder's Equity over Number of Common Shares.

Earnings per Share
Earnings per share considered as the most frequently used accounting information in value relevance studies. By using the formula given by them earnings per share calculated by taking earnings after tax, interest and depreciation divided by the total number of outstanding shares.
Moreover, Earning is a fundamental and prominent accounting variable when it comes to the investigation of the value relevance of accounting information. This is due to its superiority over cash flow in this regard. However, the market will look out for both cash flow and net book value if the earnings numbers are perceived to be inadequate (Abiodun, 2012). The earnings per share which is a parameter that can be used to measure the earnings ability of firms is required to be disclosed by companies quoted or about to be quoted in the public security market (Valix & Peralta, 2009). The non-public enterprises to the extent that it would enhance their financial report comparability, are encouraged to present their EPS on the face of their income statements (Menaje, 2012). Contrary to the past practices of presenting information on the earnings per share in the form of primary and fully diluted EPS, the Financial Accounting Standard Board (FASB) now requires the disclose of both the basic and fully diluted EPS. This new practice of EPS disclosure is being motivated by the need to conform the calculation of EPS to the international standard and to assist the investors to better access the effect of potential dilution than that achieved under the primary EPS (Livant & Segal, 2000). Most of the studies done on examine value relevance of earnings per share on share price, results reported to be significant and positive related with share price, this supported by the results found by Pathirawasam, (2010) in Sri-Lanka observed earnings per share to have positive value relevance on the market share price of 129 companies selected from 6 major sectors listed at Colombo stock exchange and other study done by different researchers including Tharmila,.
(2013) and Vijitha, and Namalathan (2014) in Sri-Lanka, by Ragab (2006) in Egyptian market, Adaramola and Oyerinde (2014) in Nigeria reported the same results. Earnings per share were sourced from profit and loss statement of the company by dividing the profit after tax by the number of outstanding shares for the respective period.

IFRS Adoption and the Value-Relevance of Accounting Information
Fair Value Accounting has shifted the paradigm of Accounting since "a major feature of IFRS qua standards is the extent to which they are imbued with fair value accounting" (Ball, 2005). In history, Fair value accounting "has played an important role in U.S. generally accepted accounting principles (GAAP) for more than 50 years" (Ryan, 2008).
It has been described as "the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction" (IFRS 3), apparently, it departs from historical cost accounting" (Jensen 2007).
Although it shares similar features with liquidation valuation, it is considered as a concurrent exit value because it does not take cognizance of the accompanying cost of liquidating underlying assets as in the case of liquidation values. Accounting literature is replete with arguments against fair valuation. It has mostly been criticized on the ground that it brings about "adjustment that cause enormous fluctuations in earnings, assets and liabilities that are washed out over time and never realized" (Jensen 2007). However, testimonies of its radicalism in improving the scope for market discipline, accounting information and corrective actions are countless. "It is increasingly acknowledged in both the academic literature and the supervisory debate that the discipline exercised by informed and uninsured investors is an essential complement of supervisory control" (European Central Bank, 2004) created by the fair value accounting. It has also been practically proven that fair value accounting aligns positively both during upturns and downturns. Barth, Gomez-Biscarri& Lopez-Epinosa (2012) observe: "It leads to stronger cyclicality of accounting variable: in the upturns of the economy fair value would allow for revaluation of assets and in downturns only fair value accounting would recognize bad news when fair value is above the cost" (p.1).

Perspective on Value Relevance
There are different ways of interpreting value relevance, Francis and Schipper. (1999) identified four different approaches to studying the value relevance of accounting information as follows: The Fundamental Analysis view of Value Relevance The fundamental analysis approach to value relevance focuses on the usefulness of accounting information in equity valuation. Financial statement information is assumed to be relevant for valuation if portfolios based on this information are associated with abnormal returns. Thus, it is not assumed that the market is at all times efficient but that there is the possibility of earning abnormal returns simply by using accounting information.

The Prediction view of Value Relevance
This interpretation of value relevance is also related to fundamental analysis research. Accounting information is assumed to be value relevant if it can be used to predict future earnings, dividends, or future cash flows. The Information view of Value Relevance Accounting figures are assumed to have information content if the release of new information modifies investors' beliefs about future cash flows and thus causes price revisions. Information content studies use statistical association models to examine how the stock market reacts to the disclosure of new accounting information.

The Measurement View of Value Relevance
Under the measurement of value relevance, accounting information is value relevant if it captures or summarizes information that in turn affects stock prices.

Theoretical Framework
Agency theory Institute of Chartered Accountant of Nigeria (ICAN), (2014) elucidated that Agency theory is based on the idea that when a company is first established, its owners are usually also its managers. As a company International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 @ IJTSRD | Available Online @ www.ijtsrd.com | Volume -2 | Issue -5 | Jul-Aug 2018 Page: 2267 grows, the owners appoint managers to run the company. The owners expect the managers to run the company in the best interests of the owners; therefore a form of agency relationship exists between the owners and the managers. Agency theory addresses problems that arise due to differences between the goals or desires between the principal and agent. This situation may occur because the principal isn't aware of the actions of the agent or is prohibited by resources from acquiring the information. For example, company executives may have a desire to expand a business into other markets. This will sacrifice the short-term profitability of the company for prospective growth and higher earnings in the future. However, shareholders that desire high current capital growth may be unaware of these plans.
Kipchoge, (2015) adopted the theory on the premise that managers (agents) have better access to company's' accounting information can make credible and reliable communication to the market to optimize the value of the firm. Through financial reporting they communicate to the users of financial reports information that is useful in making choices among alternative uses of scarce resources. This study adopted the agency theory owing to the fact that financial information presentation signifies the stewardship role of an agent to his principal as in the case of information disclosure to uses following the former Nigeria Statement of accounting Standard during the pre IFRS adoption and the Post adoption period.

Review of Empirical Studies
Quite number of researches has been carried out locally and outside Nigerian borders on value relevance on accounting information within and outside the new accounting reporting for or against the established theories.
Beijer, Dekimpe, Dutordoir, and Verbeeten (2008) study the impact of inter-brand value announcements on the value relevance of brand by documenting a statistically and economically significant effect of brand value announcement on stock prices in Erasmus. That is, stock price are generally increasing in the magnitude of the brand value charged.
Omaima, Peter, Gianluigi and David (2008) studied the value of voluntary and mandatory disclosure in a market that applies International Accounting Standards (IAS) with limited penalties for noncompliance employed panel-data analysis, their results show that, after controlling for factors such as asset size and profitability, mandatory disclosure has a highly significant but negative relationship with firm value, although a puzzling result from a traditional perspective, it is consistent with the predictions of analytical accounting models, which emphasize the complex interplay of factors determining disclosure effects.
Pourheydari, Aflatooni and Nikbakat (2008)  show significant association with stock market indicators. Further, through this study, they also explored the value relevance value additively of cash flow. They concluded that despite the widespread use and continuing advancement in accounting information and reporting practices, there is some concern about their not carrying enough value in the eyes of the shareholders or investors.
Habib and Elhamaney (2009)  The study shows that accounting information has the ability to capture information that affects equity values and that there is relationship between accounting numbers and share prices in Nigerian Stock Market. This study however shows a number of serious limitations: the time scope for this study was narrow, such that conclusions from this study could not be compared to studies done in more matured markets. It also did not take into cognizance the factor of scale as well as the effects of heteroscedasticity.
Karunarathne and Rajapakse (2010) studied the value relevance of earnings and cash flow in determining stock prices by paying attention to firm size effects on value relevance in Colombo stock exchange. The authors used both return model and price model to determine the value relevance of financial statement information and found that the value relevance of accounting information under the price model has more explanatory power than that of the return model, earnings per share was found to be more relevant in the study.
On another study, Belesis and Sorros (2010) established that both earnings and book values are value relevant and can explain the share price in the same degree in Greek listed firms. However, the major limitation of this study is that it made use of data from all business sectors except banking, finance, and insurance, which makes it impossible to pin the findings to a specific industry.

Abubakar
(2010) conducted an empirical investigation using Ohlson model on the value relevance of accounting information of listed new economy firms in Nigeria. The study aimed at establishing the level at which accounting information of the firms such as book values and earnings per share influence the share price valuation. The study found that accounting information published by the firms in Nigeria has no significant value relevance to the users of the information. However, the firms considered in this study are new economy firms known as Telecommunication, Media and Technology (TMT) firms whose assets are largely intangible and are not included in the financial statements. Oka for and Ogiedu (2011) examine the potential effects of the adoption and implementation of IFRS in Nigeria from the perspective of stakeholders. It presents the results from a questionnaire survey of a sample of accounting lecturers, auditors and accountants. The data were analyzed using the Chi Square. The study found that International Financial Reporting Standards have the potential for yielding greater benefits than current GAAP, improve business performance management and impact on other business functions apart from financial reporting. The study also finds that IFRS adoption will add to financial reporting complexities and increase compliance with accounting standards.
Keener (2011)  Uthman and Abdul-Baki (2014) examined the effect of IFRS adoption on the performance evaluation of a case firm using some financial ratios selected from four major categories of financial ratios. The study was conducted through comparison of the ratios that were computed from IFRS based financial statements and Nigerian GAAP based financial statements. A One-Sample Kolmogorov-Smirnov Test was conducted to test for data normality. Mann-Whitney U test was employed in testing whether significant difference exists between the pair of ratios when the normality test showed a non-normal distribution of the data set. The result of the Mann-Whitney U test showed that there is no significant difference between the pair of ratios at 5% level of significance. It was concluded that the disclosure of IFRS compliant set of financial statements was not attributable to higher performance evaluation, through ratios, of the case firm. Rather, such disclosure could have been motivated by the capital needs theory or signaling theory.
In the study of Mechelli and Cimini (2014), they state that, net income is more value-relevant than comprehensive income (CI) in Europe, but total OCI for the period adds relevant information on net income for those items already disclosed in net income and book value. Additionally, Dhaliwal et al. (1999) found improvement on the association between returns and income as well as OCI. Furthermore, Lee and Park (2013), by adding control variables (audit size) report incremental value relevance of OCI, the result showing that there is incremental value relevance to the aggregate OCI.  Omokhudu and Ibadin (2015) the purpose of this paper is to contribute to the empirical literature on value relevance by examining the extent to which accounting information is associated with firm value, from an emerging market context. The paper uses the basic  model and the modification of the model that includes cash flow from operation, and dividends, to ascertain the value relevance of accounting information in Nigeria. The paper accommodates the documented relative inefficiency of the market by using stock price at three months and six months after year end as dependent variable. The study employs a pooled and panel data in the regression of share price and returns on accounting numbers. The ordinary least square (OLS) estimation and dynamic model estimation, with the Random and Fixed effects variants were used in the regression. The study finds that earnings, cash flow and dividends were statistically significantly associated with firm value but book value was related but not statistically significant.  Lawani, Umanhonlen and Okolie (2015) centered on conservatism and value relevance of accounting information to quoted firms in Nigeria stock exchange. In order to ascertain the impact of conservatism on value relevance of accounting information, secondary source of data collection, statistical instruments such as multiple regression and correlation coefficient were used in the analysis of data collected. It was discovered among others that there is the existence of a significant inverse relationship between Market-based conservatism (BMCONA) and Earnings per share (EPS) for the pooled OLS, fixed and random effects model. The results suggest that higher conservative practices by companies will affect the in formativeness of financial estimates and declines in stock returns may be seen as an outcome of the markets assessment of disclosure credibility.
Charumathi and Suraj (2015)  accounting information before and after the mandatory adoption of IFRS in Germany and the UK. Regression analysis was used for data analysis. The study shows that the incremental value relevance of both earnings and book values are considerably higher in the long term for firms in the UK than in Germany. Secondly, a simultaneous addition of accounting and macroeconomic variables in an extended model, which indicates a significant rise in the relative predictive power of the book value of equity.
Jinadu (2016) Examines whether the adoption of International Financial Reporting Standards (IFRS) has improved the quality of accounting information in the area of value relevance as it affects the Nigerian quoted firms. Regression method was used to analyses the data collected. The findings revealed that the adoption of IFRS has a positive and significant effect on the value relevance of accounting information. The study recommends that the government should empower the relevant bodies to incorporate more measures to improve the quality of the financial reporting in order to increase the value relevance of financial statements.
Uwalomwa, Agba, Jimoh, Olubukunola and Jimoh (2017) examined in the impact of IFRS adoption on earnings predictability of listed banks in Nigeria. A sample of 11 listed banks in Nigeria. Categorically, data were obtained from the financial statement 2013 to 2014 (post-adoption period) and 2010 to 2011 (preadoption period). The data obtained were analyzed using regression on the Statistical Package for Social Sciences (SPSS). The study found a decrease in the ability of current earnings to predict future earnings after the adoption period. Thus, IFRS adoption has a negative impact on earnings predictability.

Summary of Empirical Literature
Prior literature provides evidence on the value relevance of accounting information as measured in balance sheet, income and expenditure, comprehensive income and cash flows statements. Balance sheet disclosures on assets and liabilities provide information needed by the investors for decision-making in financial institutions. Gaston, et al (2003); Wulandri and Rahman (2004); find that accounting institutional environment has a stronger positive association with value relevance of accounting earnings than legal environment. Ragab and Omiran (2006) standard, besides most of the studies on value relevance of accounting information on IFRS financial periods were in developed countries. In addition their results were inconsistent and this might be as a result of the methodology used. In view of this, this study however set out to fill the gap by adding additional statistical tool to determine whether value relevance of accounting information in Nigerian manufacturing firms has improved after the implementation of IFRS.

METHODOLOGY Research Design
Ex-post facto research design was adopted for the study. This is appropriate because the study aims at measuring the relationship between one variable and another, in which the variables involved are not manipulated by the researcher. Stratified random sampling was employed in selecting the manufacturing companies to be included in the sample. In stratified random sampling, the entire population is organized into homogenous subjects and a random sample is drawn from each subset or strata (Ezinwa, 2011). Each of the 5 grouping is regarded as strata. The sample size was apportioned among the 5 stratum and random sampling technique was applied in selecting the companies in each stratum.

Method of Data Analysis
To determine whether IFRS has impacted on value relevance, the study divided the periods into pre-IFRS

Model Specification
The researcher adopted  price model from two financial reports indicators (financial position and comprehensive income) is being used to test the value relevance of financial reporting. This was used to explore the relationship between market value with two main financial reporting variables; the book value per share which represents financial position and earnings per share which represents comprehensive income. By the   The method uses a F-test to determine whether the perceived structural change has a measurable effect on the study periods and aim is to determine whether a single regression covering the periods before and after the adoption of IFRS in 2012 is more efficient than two separate regression involving splitting of data into two samples, one representing the period before 2012 and the other for the period after 2012.          Although the value relevance of accounting information has been studied in many perspectives, some related studies has offered contradicting results about whether relevance of accounting information has declined or increased over time. Some empirical studies reveal that value relevance of accounting information declines, many studies found that value relevance of accounting numbers increases. Many countries' results show that adopted IFRS significantly improve value relevance of accounting information. Therefore, this study is consistent with the studies that revealed an increase in the value relevance of accounting information after implementation of IFRS.

Recommendations
Based on the findings of this research work, the study recommends thus; 1. The accounting information for book value per share should be communicated to the investing public; and such information should be of high quality to avoid negative consequences on the part of investors. 2. Investors should have it in mind that earnings represent quite a significant variable in the determination of share prices. Therefore earnings per share should be given high consideration during the investor decision making process. 3. The accounting preparers and standard setters should enhance the quality of cash flow because it received attention of most investors as it disclose the in and out movement of cash for operations. 4. However, potential investors in Nigeria should consider manufacturing firms while making investments decision.

Implication of the Findings
The findings of this study imply that the value relevance of accounting information of manufacturing companies is more sensitive during Post-IFRS era than the Pre-IFRS era. This may also imply that the book value per share, market price, earnings and cash flow have become informative to equity investors in determining the value of firms following IFRS adoption.

Contributions to Knowledge
In addition to the statistical tools used by previous studies, this research contributes to the literature by adding additional statistical tool (Chow test) in determining whether the structural change has a measurable effect on the study periods. This however, has provided a clearer view to the study on IFRS and value relevance of accounting information on the Nigerian manufacturing firms.