Purpose: This study investigates the impact of COVID-19 on the relevance of accounting information for equity valuation among listed financial service firms in Nigeria.
Methodology: The period of the study is 2016-2024. Using a correlational research design, data were sourced from the annual reports and Cash Craft Stockbroker website. The population comprised 49 listed financial service firms as of 31st December 2022, from which 34 firms were sampled. Two panel regression models were estimated each for pre-pandemic and post-pandemic respectively.
Findings: Findings reveal a post-pandemic decline in the value relevance of earnings, while book value became statistically insignificant. However, dividend relevance increased, cash flow from operations lost its predictive power after the Pandemic.
Implications: Based on the results, earnings, dividend, and cash flow from operations be prioritized in share price valuation across both stable and crisis periods. However, book value should not be used in the post-pandemic. Financial service firms should enhance earnings and maintain dividends to boost firm value and investor confidence. Effective management of book value and cash flows aligned with industry average.
Originality: The study contributes to the literature by providing insights on the effect of COVID-19 on the relevance of accounting information on equity valuation among the listed financial service firms in Nigeria offering a valuable insight to investors in the sector.
Limitations and directions for future research: This study is on Nigerian financial service firms; future research could explore other sectors or countries.