This study examines empirically whether investors in the
Romanian stock market perceive accounting information based on domestic GAAP
to be value relevant. The study is motivated by the value-relevance literature in the
emerging stock markets in which Romania is also included. Using a sample of all
productive listed companies in the Bucharest Stock Exchange from 2005 to 2008
with available data, we obtain evidence of value relevance of accounting
information in Romania based on the return and price models. The results of this
study are the following: accounting information is value relevant to investors in the
emerging stock markets despite the young age of the market; the improvement of
the accounting rules leads to increase the relevance of accounting information; the
value relevance of accounting information is greater for the companies which: has
positive earnings, are large, recorded a decrease of turnover; and/or are high
indebted
