Abstract:
This study examined empirically the relationship between accounting information
and equity share investment in listed Nigerian companies. The study used earnings
per share, net book value per share, return on equity, and cash flow from operation
per share as proxies for accounting information. The main objective of this study is
to establish the effect of financial accounting information on the equity share
investment in companies listed on the Nigerian Stock Exchange Market. Specifically,
the study establish the effect of earnings per share, book value per share, return on
equity and cash flow from operation per share on the equity share investment. The
study adopted descriptive and explanatory research designs. Simple and multiple
linear regression analysis methods, using panel data Model, were employed to
determine the relationship between the dependent variable and the explanatory
variables. Both primary and secondary data were used to carry out the study. The
primary data were collected through questionnaires administered on the respondents.
Secondary data was collected for all variables for a period of ten years (2005 to
2014) and was obtained from the Nigerian Stock Exchange fact book, Published
annual financial reports of listed companies in Nigeria and the Nigerian Stock
Market annual reports. Correlation and regression methods were used to carry out the
inferential analysis. Statistical t-test and F- test were used to test the significance of
explanatory variables on dependent variable. Data analysis was carried out using R
Software Version 15. The results of the study revealed that there is a significant
relationship between accounting information and equity share investment in
companies listed on the Nigerian Stock Exchange. All accounting information
variables considered in this study significantly influenced equity share investment.
Earnings per share have the highest correlation coefficient with equity share
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investment, followed by net book value per share, return on equity and then cash
flow from operation per share. The study recommends that all listed companies in
Nigeria should prepare and disclose accounting information indices that are relevant
for equity share investment decisions makings alongside with the mandatory
financial statements to meet the needs of equity share investors. Furthermore,
accounting regulatory bodies and government should impose strict compliance with
accounting standard guidelines on listed companies in their preparation and
presentation of financial statements. Sanctions should be imposed on the managers
who failed to adhere to the accounting standard guidelines in the preparation and
presentation of their company‟s financial statements.
