Value Relevance

CHAPTER THREE

3. RESEARCH METHODOLOGY

3.0 INTRODUCTION

This chapter is a crucial part of this study which combines on data study and methodology. The purpose of this chapter is to introduce the research strategy and empirical techniques applied. Through this chapter, we will discuss in detail about the type of study, population and sample, data collection, variables measurement and statistical tests. In this study it will engaged in hypothesis testing to explain the relationship between four variables and to explore its differences among GLCs and Non-GLCs companies. Secondary data are used.

3.1 TYPE OF STUDY

In this study we used correlation study as it involves in collection of data to determine whether and to which extent the degree of relationship exist between four variables. In our study, we examine whether there is relationship between share price and accounting information in term of EPS, book value and net operating income.

3.2 POPULATION AND SAMPLE

The target sample of this research is focused on the comparison between GLCs and Non-GLCs in Malaysia. We will use random sampling which will be selected randomly within the group. There are 33 company categories as GLC companies listed in Putrajaya Committee of GLC High Performance (PCG) on 13 March 2009. Beside that for sample on Non-GLCs, we will select 67 Non-GLCs companies listed in Bursa Malaysia. These researches focus on these samples because the accounting information provided by the company financial statement would be very effective and relevant. Secondary data will be primarily used for this study.

3.3 DATA COLLECTION PROCEDURE

In order to achieve the objectives of the study and its impact towards the quality of financial reporting, it is important to measure whether accounting information is value relevance or not. The data collected for the study is categorized into two variables that consist of independent variable and dependent variables. The independent variables will consist of...