One of the main objectives of accounting systems is to provide investors with relevant information that may be useful in decision making for efficient resource allocation. This paper investigates the value relevance of accounting number in Mauritius through the implementation of six models. Hence, using a sample of all Mauritian firms listed on the SEM-7 for the period 1998-2005, the value relevance of book value, earnings and dividends are analyzed. Through various comparisons, the overall results of the study suggest that the Ohlson model is a better model in explaining share prices. Based on the above findings, the current issues that are hinging the stock market development along with their plausible solutions are subsequently discussed.

Financial statements represent a valuable tool for investors to facilitate their task of decision-making as it essentially provides investors with the maximum possible financial information about a company's performance, its financial position as well as the changes in its financial position. In accounting research, the value relevance criterion is used to assess the impact of financial statements on share prices. In that respect, a key theme in capital markets research is indeed the relative value-relevance of accounting figures.

Thus, the aim of this is study is to analyze the ability of accounting numbers to explain stock prices in the Mauritian stock market. The study is motivating given that Mauritius is not well documented regarding this particular research field. This paper attempts to answer the following questions: How relevant is accounting information in the Mauritian stock market? Is the value relevance concentrated in earnings or book values? This study also aims at determining whether a valuation approach under the Ohlson model gives a better explanation of the value relevant to the accounting information in the Mauritian financial statements.

This paper first reviews some of the empirical studies that document the value relevance literature and divulges the basic information related to the Stock Exchange of Mauritius. This paper then provides the methodological approach and the data analysis of the study. Finally, it summarizes and provides concluding remarks.

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