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This article assesses the state of cash flow reporting by listed South African industrial companies in order to evaluate whether the users of financial statements can accept them as being reliable and use them as a tool to compare the operating performance of various companies. As the cash flow statement has been in use since 1989, it was envisaged that compliance would be high. However, it was found that there are several companies that deviate from some of the requirements of AC 118 regarding cash flow statements.

Reporting cash flows is a relatively recent development in college and university financial reporting. An examination of the purported usefulness of cash flow information to the users of college and university financial statements including an examination of the relationship between accrual-based change in net assets and cash provided by operations found private universities have implemented the cash flow reporting requirements with a relatively high level of compliance employing the indirect format for reporting operating cash flows. The principal areas of deficiency were the reporting of split-interest, restricted gift activities and the required disclosures of cash outflows related to interest and taxes. The discussion of the compliance deficiencies and display findings leads to needed disclosure guidance and future research.

This study aims to explore the relationship between audit partner and firm industry specialization and board of director independence on the decision by Taiwanese firms to use International Financial Reporting Standards (IFRS) flexibility concerning reporting interest income and expense and dividends received in different sections of the statement of cash flows. This flexibility existed in Taiwan for the first time in 2013, the year that Taiwan switched from its own generally accepted accounting principle to IFRS.

Using 2013 data for a sample of 1,227 firms, 354 of whom changed their reporting classification, this study examined the interaction effect of board independence and partner-level and firm-level auditor industry specialization on the cash flow reporting decision using logistic regression.

The results show there is a substitute relationship between board independence and partner-level industry specialization on the change in cash flow reporting classification, but a complementary relationship between board independence and firm-level auditor specialization. Further, both partner-level and firm-level auditor industry specializations have a complementary (but negative) relationship with board independence as to whether the firm is likely to report interest expense paid in the operating or financing activities sections.

An important implication is that knowing the levels of audit firm and partner specialization and how independent the board is, is useful for researchers and regulators in investigating auditor-client relationships and understanding the influences of variables investigated here on the outcome(s) of accounting policy and regulatory changes.

This study improved the field’s understanding of the impacts of audit partner and firm specialization, board independence and relevant interactions on cash flow reporting choices.

An issue which has received recent attention internationally is that of cash flow statements. In Malaysia members of the accounting bodies have been invited to present their comments and views on the possibility of adopting cash flow statements in Malaysia. Historical links with the United Kingdom mean that extant UK accounting standards usually find their equivalents in Malaysia sooner rather than later. The UK standard on cash flows requires a categorisation of cash flows which is different to the IASC and every other regulatory body except that in Hong Kong. On the other hand, Singapore, which has historically mirrored extant UK regulations quite closely, has decided to adopt the IASC model for cash flows. Thus the debate about whether, and how, to move from funds flow to cash flow reporting in Malaysia is tinged with an additional degree of complexity. By setting out a brief history of the transition from funds flow to cash flow reporting in the rest of the world and providing evidence from observations on the UK standard by preparers of accounts, it is hoped to contribute to the current debate in Malaysia.

This paper reports results of a survey that examines user perceptions of alternate formats of the Statement of Cash Flows (SCF) mandated by the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). The formats were compared using seven reporting issues. The findings indicate that users found the GASB SCF model to be superior to the FASB model for all issues. The study has implications for both standard-setting bodies. The GASB has already considered the results in developing a new reporting model for governmental entities. The FASB may at some point want to reconsider its SCF reporting requirements.

This study aims to provide insights into US and Australian analysts' views regarding the relative importance of disclosing the direct method (DM) or indirect method (IM) statement of cash flows and forecasting firm performance.

Evidence is collected from responses to 104 surveys and 52 interviews completed by US and Australian analysts from 2017 to 2022. The survey and interview questions are developed with reference to the literature.

US and Australian analysts believe that the DM format provides incremental benefits compared to the IM for (1) confirming the reliability of earnings; (2) improving earnings confidence; (3) more accurate ex ante forecasts of operating cash flow and earnings; and (4) identifying opportunistic accruals manipulation. Analysts view that DM disclosure can lower firm-level cost of equity, although US interviewees more uniformly expect lower costs of equity under DM disclosure when firms yield low earnings quality. DM disclosure is also more important during unstable economic periods, as proxied by COVID-19.

Limited research currently exists regarding disclosure of the DM or IM and its impact on analysts' forecasting accuracy, earnings quality, economic uncertainty and cost of equity. Previous research has relied on archival research to examine differences between the DM and IM methods and are limited by data availability. Our findings are particularly relevant to the US market with few US firms reporting the DM format.

This study examines the incentives motivating listed companies in Malaysia to voluntarily choose the Direct Method over the Indirect Method in reporting cash flow from operating (CFO) activities in their 1997 annual financial reports following the adoption of the IAS 7 (Revised) Statement of Cash Flows (SCF), which was used prior to the current standard MASB No. 5 Cash Flow Statement promulgated by the Malaysian Accounting Standards Board (MASB) in 1999. Adopting the signalling perspective, the general hypothesis of this study is that the choice of the Direct Method over the Indirect Method in reporting CFO activities is to maximize a firm’s value via engagement in quality signalling to the market. Specifically, it is hypothesised that such decision is influenced by the firm’s level of managerial efficiency, financial risk, size, its auditor, and industry membership. The sample consists of 231 firms listed on the Kuala Lumpur Stock Exchange; 32 firms in the treatment group (Direct Method) and 199 firms in the control group (Indirect Method). Based on the results from the univariate and multivariate analyses, we found all variables to be in the hypothesised directions. However, we infer that the decision to choose the Direct Method for reporting CFO activities in SCF is significantly influenced by the firm’s level of managerial efficiency, size, and its auditor. Thus, there is support for the general hypothesis of maximization of the value of the firm via quality signalling. The authors gratefully appreciate the helpful comments of the discussant and workshop participants at the 11th Asian‐Pacific Conference on International Accounting

This study revisits the issue of the usefulness of the Statement of Cash Flows (SCF) by examining the perceptions of mutual fund investment analysts in India on the relative usefulness of the Income Statement, Balance Sheet, Notes to the financial statements and reports of Chairperson, Directors, and Auditors. Six testable hypotheses were developed and tested. The evidence of this study, drawn from a mail survey that achieved a high response rate, suggests that the SCF is read significantly less thoroughly, poses greater difficulty in understanding, and is perceived to be less useful than any of the other components of annual reports. The results of the study are also compared against those reported in similar studies undertaken in New Zealand and Malaysia, which show significant differences. A possible explanation for the contrasting results of the current survey is that Indian regulation allows only for an indirect format for presenting the statement of cash flows. The results of the survey suggests a pressing need for the Indian regulators to modify the format of reporting the SCF or give an option to companies accorded under IAS ‐7 (revised).

The purpose of this paper is to investigate the accuracy and informational quality of the cash from operations section of the cash flow statement.

This paper empirically tested the accuracy of the cash from operations reported by Canadian non-financial companies. The authors studied 262 companies at three different time periods providing 786 firm observations. For each observation, the balance sheet was used to confirm the figures reported in the statement of cash flows. In addition, the authors investigated management's disclosure of the particular working capital items.

The findings suggest that in recent years, companies are more likely to overstate their cash flow from operations, thereby presenting a better financial picture than is supported by the balance sheet accounts. This would suggest that the investing or financing section would be correspondingly understated. The presence of acquisitions reduces overstatements, which may be the result of more auditor presence.

This paper extends previous research from documented single, isolated instances of cash from operations being misstated to include a significant sample with more generalizable findings. The data are Canadian which may limit the generalizability to other countries. Future research should address the extent to which financial analysts rely on the reported cash from operations figure.

This preliminary study may have implications for financial analysts and others relying on the free cash flow figure.

This study expands on previous research which has taken place only on a case-by-case basis.

This study aimed at investigating the value relevance of book value and earnings and the relationship between earnings and operating cash flow of two different financial reporting regimes in Malaysia. A market and nonmarket valuation approaches were utilised for that purpose. The result of market valuation approach of pool sample shows that book values and earnings are value relevant. We also observed that the change in financial reporting regime affects significantly the value relevance of book value and but not earnings. While book value and earnings are value relevant during the MASB period, only book value is value relevance during the FRS period. The result of non‐market valuation approach on the other hand, shows that the change in financial reporting regime has no significant effect on the relationship between earnings and operating cash flow. The result of market valuation approach implicates that the introduction of new or improved standards under FRS regime strengthen the position of book value thus leaving earnings behind in equity valuation. The result of non‐market valuation model implicates that the level of relationship between earnings and operating cash flow persists as long as operating cash flow comprise of cash and cash equivalent components whereas earnings comprise of cash and accruals components. The study contributes to the existing literature in the area of the effect of adoption of FRS on value relevance of accounting numbers in Malaysia.