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Determining the Importance Level of Accounting Information for Investors’ Decision Making

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  • Melis Ercan
  • Emrah Onder

Abstract

The aim of this study was to determine the precedence order of the accounting information (factors) influencing choice of investment, to derive the relative weight of each factor and to identify differences and similarities in such factors between accounting experts and finance experts. Analytical Hierarchy Process (AHP) methodology was used for the outranking of accounting information (Baker & Haslem, 1973) including future economic outlook of the company, quality of management, future economic outlook of the industry in which the firm is a part, expected future growth in sales, financial strength of the company, expected future percentage growth in the company’s earnings per share, reputation of the company, rate of return the company earn on its assets, ease with which the company can sell its assets in case of failure, size of the company, expected future level of long-term interest rate on corporate bonds, value of a share of stock based on the company’s accounting records (book value) etc. The questionnaires were answered by accounting and finance experts. In this study, subjective opinions of accounting and finance experts turn into quantitative form with Analytic Hierarchy Process. Results of this study can be used by investors, Ministry of Economy, finance, accounting, business and economy students, professionals and academicians etc.

Suggested Citation

  • Melis Ercan & Emrah Onder, 2016. "Determining the Importance Level of Accounting Information for Investors’ Decision Making," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(2), pages 136-152, February.
    • Handle: RePEc:hur:ijarbs:v:6:y:2016:i:2:p:136-152
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    Citations

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    Cited by:

    1. Eman Ismail & Yasser Tawfik Halim & Mohamed Samy EL-Deeb, 2023. "Corporate reputation and shareholder investment: a study of Egypt's tourism listed companies," Future Business Journal, Springer, vol. 9(1), pages 1-15, December.

    More about this item

    Keywords

    Accounting; Information; Finance; Investors; Analytic Hierarchy Process; Multi Criteria Decision Making;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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