While numerous studies have examined accounting value relevance (AVR) in terms of its measurement, evolution and usefulness, few studies have interpreted it through the lens of the information transmission process. This study aims to fill this gap and provide guidance for future research.
The authors constructed an integrative framework to articulate how information is transmitted from its producers to its processors and is incorporated into share value. The authors identified 243 value relevance studies published between 1995 and 2024 and synthesised, analysed and summarised these studies using the proposed framework.
The findings suggest that information producers and processors benefit differently from AVR and affect this accounting quality indicator in their own ways. Furthermore, while early AVR research on information sets primarily focused on financial information, subsequent research has expanded to include non-financial information, highlighting the growing demand for comprehensive information in decision-making. However, this expansion has not curbed the slowdown of AVR research in recent years, emphasising the need for fresh perspectives to advance research on this topic.
The authors provide a roadmap for researchers to effectively structure their studies on AVR. By reviewing the existing literature, this study helps researchers understand the origins, development and measures of AVR; examine how AVR is affected and shaped throughout the information transmission process; and identify trends, gaps and opportunities in existing AVR research.
This study makes a meaningful contribution by identifying underexplored areas in AVR research, particularly those related to the information transmission process. It also outlines directions for future value relevance research.
