The Global Financial Crisis and Value Relevance

This study addressed two diverse areas of investigation value relevance of the accounting data (is the statistical interpretation of the accounting data in stock prices) and its connection to the Global Financial Crisis by employ sample of 81 enterprises scheduled in Pakistan Stock Exchange from textile sector for the period 2003-2015. Firstly it is investigated either the accounting data is value relevant or not in Pakistan during 2003- 2015. The results describe during the investigating period the accounting data is significant in Pakistan. Secondly the other intention of this cram is to investigate either the Global Financial Crisis affect the accounting data in Pakistan. The results show the troubling event has effects the credibility of the books of accounts in Pakistan. In respect to this event book value is value relevant pre and post crisis which emphasis on that in bad time’s stock prices has high correlation with the information substance of book value as it seem the proxy of an abandonment option. In respect to earnings it is stated that earnings is value relevant throughout the investigating phase.