Development of Accounting in Poland: Market Efficiency and the Value Relevance of Reported Earnings

27 Pages Posted: 16 Jan 2008 Last revised: 23 Jan 2011

See all articles by Dorota Dobija

Dorota Dobija

Kozminski University

Karol Marek Klimczak

Lodz University of Technology

Date Written: February 12, 2010

Abstract

This paper outlines the evolution of the information environment surrounding the Warsaw Stock Exchange in Poland. Like other transition economies, Poland’s economy needed to develop accounting regulations to support privatization. We trace changes in financial reporting regulation from 1994, through the adoption of IFRS and corporate governance codes, to the crisis of 2007/2008. The effect of these developments is then evaluated empirically by testing the relevance of earnings of listed corporations from 1997 to 2008 to corporate value. We show that the stock exchange was weak-form efficient during this period and estimate regressions for value relevance of earnings to corporate value. We find positive evidence of such relevance but find no improvement in the strength of the relationship over time.

Keywords: transition economy, information content, value relevance, Poland

JEL Classification: G12, M41, M47, K22, G38

Suggested Citation

Dobija, Dorota and Klimczak, Karol Marek, Development of Accounting in Poland: Market Efficiency and the Value Relevance of Reported Earnings (February 12, 2010). International Journal of Accounting, Vol. 45, No. 3, 2010, Available at SSRN: https://ssrn.com/abstract=1084423

Dorota Dobija (Contact Author)

Kozminski University ( email )

ul. Jagiellonska 57/59
Warsaw, 03-303
Poland

Karol Marek Klimczak

Lodz University of Technology ( email )

Poland

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