EMPIRICAL VERIFICATION OF THE VALUE RELEVANCE IN ADOPTION OF INTERNATIONAL ACCOUNTING STANDARDS FOR BRAZILIAN CAPITAL MARKETS

Abstract

The way the financial statements are prepared on the basis of their principles and standards has been submitted to critical issues about their informational capability by the diverse users, is not to meet all the needs of disclosure or the shape measurement. The book value, in most cases, differs from the market value, for example, in company’s businesses and sale actions. It seems to be less important when it makes a decision. The term value relevance has been used, in this context, in order to represent the magnitude of the importance that some accounting information produces on the value of the company in the market, which is represented by stock exchange prices. Brazil has been gradually adjusting its accounting standards with international accounting standards. After the publication of Law 11.638/07 and 11.941/08, there have been significant changes in our accounting standards to adhere to international standards. The main goal of this work is to verify if the adoption of international accounting standards in Brazil has become more relevant to financial statements in accordance with informative for the capital market, considering the changes imposed by these laws. We have used the Collins, Maydew e Weis (1997) model, which is based on the equation for the evaluation by residual profits, proposed by Ohlson (1995). The sample consists of listed companies of São Paulo’s Stock Exchange (BM&FBOVESPA), from March 2004 to March 2012. The total data is 13,143 of 579 analyzed companies with quarterly data from. The outcomes show an increase in the relevance of accounting information in the company’s value, which converges to international standards. This work contributes to the understanding of the studies related to value relevance.