01687nas a2200169   4500008004100000245011900041210006900160260000900229300001000238490000700248520107100255653001501326100001801341700001601359700001601375856012601391       2005                        eng d00aThe Value Relevance of Accounting under Political Uncertainty:  Evidence Related to Quebec's Independence Movement0 aValue Relevance of Accounting under Political Uncertainty Eviden  c2005  a49-680 v163 aThe Canadian province of Quebec is a region of an advanced industrialized nation characterized by a strong independence movement and, therefore, provides an interesting context in which to test the effect of political uncertainty on the relationship between market values and accounting values. In this study we compare market-to-book value associations of a sample of firms headquartered in Quebec with those of a sample of Canadian firms headquartered outside Quebec, over the period 1988”2002. Our comparisons suggest that, on average, the value of Quebec-based firms is significantly less than other Canadian firms when valuation is based on multiples of book value and earnings. In addition, we find that the "Quebec discount" decreased significantly in the period immediately following the 1995 provincial sovereignty referendum wherein Quebeckers voted (narrowly) against Quebec sovereignty. We conclude that the relative undervaluation of Quebec firms is related, at least in part, to political uncertainty associated with the Quebec independence movement.10aAccounting1 aGraham, Roger1 aMorrill, C.1 aMorrill, J.  u/biblio/value-relevance-accounting-under-political-uncertainty-evidence-related-quebecs-0