The value relevance of accounting information has changed over the last decade. The importance of the two accounting amounts traditionally implemented in value relevance estimation models (earnings and equity book value) has gradually decreased, but a wider and more heterogeneous set of accounting amounts has counterbalanced this trend. We studied the evolution of the value relevance of a set of accounting amounts and their relative importance in order to verify if accounting information can still be considered relevant in modifying stakeholders expectations and explaining the variations of stock-market prices. We found that even if the value relevance of earnings and equity book value decreased, this trend was counterbalanced by other accounting amounts: in particular, by the ones representing investments in intangible assets, and future growth opportunities. At the end, accounting information is still important, but what has changed is how it reflects in the prices of equities on stock markets. Management should be aware of this, in order to implement internal control systems increasing trustworthiness of information and operative performance towards stakeholders’ expectations.
Keywords: value relevance, capital markets, stakeholders expectations, internal audit, corporate governance, internal control
Madonna, S., Cestari, G., Callegari, F. (2020). The Value Relevance of Accounting Information in Italy. The evolution of Borsa Italiana STAR Segment, Management Control, n. 2, pp. 57-80, DOI:10.3280/MACO2020-002004