Pathirawasam, Chandrapala and Wickremasinghe, Guneratne B (2011) Impact of Information Technology Adoption on Value Relevance of Accounting Information: Evidence From the Colombo Stock Exchange. Journal of Modern Accounting and Auditing, 7 (7). pp. 680-688. ISSN 1548-6583 (print) 1935-9683 (online)

Abstract

The purpose of this paper is to investigate the value relevance of earning based accounting information and to see how value relevance has changed with the introduction of new information technology at Colombo Stock Exchange (CSE) in Sri Lanka. Sample of the study includes 129 companies selected from 6 major sectors at CSE. Cross sectional and time series cross-sectional regressions are used for the data analysis. Study finds that earnings per share (EPS) and returns on equity (ROE) have a significant impact on market price. However, the explanatory power of combined variables is below average. Further, value explanatory power of earnings has considerably improved after the new information technology adoption at CSE. This study is unique because it examines the impact of technological advancements on value relevance of accounting information probably as the first paper to be applied on Sri Lanka.

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