Disclosure requirements and voluntarily reporting of cash flow information in Greece
Abstract
Purpose
To review the disclosure requirements for cash flow reporting in Greece and the willingness of Greek companies to voluntarily disclose cash flow information.
Design/methodology/approach
The empirical research was conducted on a sample of 97 Greek firms listed in the Athens Stock Exchange by examining the relation between cash flows and other measures of profitability for year 1994 when IAS No. 7 was set in effect.
Findings
The results show that despite the fact that cash flows are more informative than an accruals definition of profits, in deciding about financial policy issues Greek companies show an increased preference to funds flows defined in terms of working capital.
Practical implications
The publication of a cash flow statement may reveal that many listed companies in Greece are not as robust as the balance sheet and the income statement potentially indicates. Thus, the main conclusion of the paper is that publication of the cash flow statement in Greece should become mandatory.
Originality/value
The present study shows that, despite the desire of the regulatory authorities that investors receive adequate and relevant information, voluntarily cash flow disclosure is not apparent in Greece because cash flows reveal financial problems that other measures of performance do not. Thus, it provides directions for standard setters in making mandatory the publication of cash flow statement in Greece.
Keywords
Citation
V. Kousenidis, D., I. Negakis, C. and N. Floropoulos, I. (2006), "Disclosure requirements and voluntarily reporting of cash flow information in Greece", Managerial Finance, Vol. 32 No. 8, pp. 685-699. https://doi.org/10.1108/03074350610676778
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited