The Impact of Financial Reporting Quality on Enhancing the Value Relevance of Accounting Information: An Applied Study on Companies Listed on the Palestine Exchange

Abstract

This study aimed to explore the extent to which companies listed on the Palestine Stock Exchange comply with the qualitative characteristics of accounting information, as well as the impact of audit quality, financial disclosure and transparency, and the adoption of International Financial Reporting Standards (IFRS) on the relevance of accounting information to value. The study adopted a descriptive-analytical approach and relied on various secondary sources to build the theoretical framework, in addition to using a questionnaire as a primary data collection tool directed at a sample of 375 employees representing the listed companies, of which 295 questionnaires were retrieved, yielding a response rate of 78.7%. The data were analyzed using appropriate statistical methods. The results indicated that companies’ compliance with the qualitative characteristics of accounting information was varied, with a strong commitment to meeting the needs of information users, while providing comparable information across different periods showed lower compliance, reflecting disparities in accounting and administrative practices. The findings also confirmed that audit quality positively affects the relevance of accounting information to value, particularly in enhancing transparency, despite some challenges in ensuring full representation of the company’s financial position. Additionally, financial disclosure and transparency levels were found to be moderate, with varying ability among companies to provide detailed and clear information to investors. The adoption of IFRS positively influenced the relevance of accounting information to value, especially by improving comparability between companies, although challenges remained in accurately reflecting the actual financial position. Overall, the study concluded that adherence to accounting standards, enhancing audit quality, improving financial disclosure, and adopting international standards are key factors for improving the reliability and relevance of accounting information for users and investors, with variation in implementation across different companies.