Preprint Article Version 1 This version is not peer-reviewed

Sustainability Reporting and Value Relevance of Financial Statements

Version 1 : Received: 26 February 2018 / Approved: 27 February 2018 / Online: 27 February 2018 (05:26:26 CET)

A peer-reviewed article of this Preprint also exists.

Sutopo, B.; Kot, S.; Adiati, A.K.; Ardila, L.N. Sustainability Reporting and Value Relevance of Financial Statements. Sustainability 2018, 10, 678. Sutopo, B.; Kot, S.; Adiati, A.K.; Ardila, L.N. Sustainability Reporting and Value Relevance of Financial Statements. Sustainability 2018, 10, 678.

Journal reference: Sustainability 2018, 10, 678
DOI: 10.3390/su10030678

Abstract

This study examines whether information about the winners of the Sustainability Reporting Award (SRA) contributes to the usefulness of the information in the financial statements. This study used a sample consisting of 110 winners of SRA (SRA firms) and 110 companies that did not receive SRA (non-SRA firms) from 2008 to 2016. The study found that earnings per share (EPS), book value per share (BVPS), and earnings per share change (EPSC) are value relevant information. Results of comparison between SRA firms and non-SRA fimrs, this study found that EPS positive association with stock price and with returns for SRA firms is higher than that for non-SRA firms. Findings of this study also show that, value relevance of BVPS for non-SRA firms is higher than that for SRA firms. When mesures of Price and BVPS are transformed into natural logarithm, the value relevance of BVPS for SRA firms is higher than that for non-SRA firms. Thus, the results are sensitive to measures of the variables. The findings of this study indicate that information about the winners of SRA contributes to the usefulness of financial statements.

Subject Areas

sustainability reporting award (SRA), financial statements, value relevance, earnings per share (EPS), earnings per share change (CEPS), book value per share (BVPS)

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