Value Relevance of Accounting Information in Sustainable Finance

DOI

10.2991/aebmr.k.211207.038How to use a DOI?

Keywords

sustainable finance; book value; earnings per share; accrual; cash flow; return

Abstract

This study aims to provide empirical evidence related to the relevant factors of accounting information that need to be considered in Sustainable Finance for companies listed on the IDX. This relevance will be following the concept of sustainable finance if the information used as the basis for predictions shows a relevant value, that is, it has predictive, confirmative, and timely value. So it is necessary to know what components will be used in compiling a predictive model of firm value which is reflected in price and stock returns. This is important to do to determine the company’s strategy in applying the principles of sustainable finance

The research uses Ohslon’s measurement model and the robustness test using the earnings and cash flow relevance model. The research sample is companies listed on the Indonesia Stock Exchange that publish financial statements for the 2016 – 2019 period. The samples obtained are 472 companies with observation data of 1455 companies_years based on unbalanced panel data.

The results show that Ohslon’s model can predict stock prices based on the relevance of book value and earnings value. Based on data analysis shows that book value and earnings have a significant effect on stock prices by 11.8%. To determine the consistency of the model, a robustness test was conducted using the relevance of earnings and cash flows. Robustness test results show consistent results that the value of earnings and cash flow can show the relevance of accounting information. Likewise, the use of variables shows consistent results, namely the relevance of book value, earnings, and cash flow to stock prices.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Yuni Pristiwati Noer Widianingsih
AU  - Doddy Setiawan
PY  - 2021
DA  - 2021/12/07
TI  - Value Relevance of Accounting Information in Sustainable Finance
BT  - Proceedings of the Conference Towards ASEAN Chairmanship 2023 (T-A-C 23 2021)
PB  - Atlantis Press
SP  - 245
EP  - 250
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211207.038
DO  - 10.2991/aebmr.k.211207.038
ID  - Widianingsih2021
ER  -