The effect of applying the conceptual framework of the financial report issued 2018 on the application of prudence and caution and property rights and their relationship to the value of the company - an applied study on Egyptian companies registered in the index EGX50
The research aimed at analyzing the effect of applying the conceptual framework of financial reporting 2018 (CF 2018) on prudence and examining the relationship between prudence and book value of equity from one side and the firm value from another side. To achive the research objectinve, the inductive and the deductive approach are applied in analyzing previous literature, building and testing research hypotheses, and deriving results.
Paired sample T test was used to test the first hypothesis regarding the effect of applying CF2018 on prudence by comparing 2017 prudence measure with 2019 prudence measure for all Egyptian companies registered in EGX 50 index after execluding financial institutions with a final sample 37 companies. Simple and Multiple Regressionis were used to test the second and third hypotheses to test the relationship between prudence application as an independent variable and book value of equity as an independent variable and book value as a dependent variable both before and after CF2018 application.
Results showed that there was no statistical significant effect as a result of apllying CF2018 on prudence and so accepting the first research hypothesis. Results also showed that there was no statistical significant relationship between prudene and equity book value from one side and firm value from another side for EGX 50 companies before the CF2018 application but a statistical significant relationship after CF2018 application ans so rejecting the second hypothesis and accepting the third one.
Recommendations included the importance of considering the book value of equity as an important determinant of firm value after CF2018 application as traditional prudence measures for firm value are no longer valid after CF 2018 apllication and this may be due to prudence has a different meaning after CF 2018 application.
Elsayed, D. A. A., & Elrashidy, T. A. (2020). The effect of applying the conceptual framework of the financial report issued 2018 on the application of prudence and caution and property rights and their relationship to the value of the company - an applied study on Egyptian companies registered in the index EGX50. Alexandria Journal of Accounting Research, 4(2), 45-78. doi: 10.21608/aljalexu.2020.106023
MLA
Dalia Adel Abas Elsayed; Tarek Abdelazim Elrashidy. "The effect of applying the conceptual framework of the financial report issued 2018 on the application of prudence and caution and property rights and their relationship to the value of the company - an applied study on Egyptian companies registered in the index EGX50". Alexandria Journal of Accounting Research, 4, 2, 2020, 45-78. doi: 10.21608/aljalexu.2020.106023
HARVARD
Elsayed, D. A. A., Elrashidy, T. A. (2020). 'The effect of applying the conceptual framework of the financial report issued 2018 on the application of prudence and caution and property rights and their relationship to the value of the company - an applied study on Egyptian companies registered in the index EGX50', Alexandria Journal of Accounting Research, 4(2), pp. 45-78. doi: 10.21608/aljalexu.2020.106023
VANCOUVER
Elsayed, D. A. A., Elrashidy, T. A. The effect of applying the conceptual framework of the financial report issued 2018 on the application of prudence and caution and property rights and their relationship to the value of the company - an applied study on Egyptian companies registered in the index EGX50. Alexandria Journal of Accounting Research, 2020; 4(2): 45-78. doi: 10.21608/aljalexu.2020.106023
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