2,710
Views
0
CrossRef citations to date
0
Altmetric
ACCOUNTING, CORPORATE GOVERNANCE & BUSINESS ETHICS

Causes of country-specific effect related to the value relevance of cash flows and earnings: evidence from France, Germany, Italy and Spain

ORCID Icon, &
Article: 2121225 | Received 12 Jul 2022, Accepted 01 Sep 2022, Published online: 08 Sep 2022

References

  • Akbar, S., Zulfiqar Ali Shah, S., & Stark, A. W. (2011). The value relevance of cash flows, current accruals, and non-current accruals in the UK. International Review of Financial Analysis, 20(5), 311–16. https://doi.org/10.1016/j.irfa.2011.06.005
  • Akono, H., & Nwaeze, E. T. (2018). Why and how firms use operating cash flow in compensation. Accounting and Business Research, 48(4), 400–426. https://doi.org/10.1080/00014788.2017.140444
  • Ali, A., & Hwang, L. S. (2000). Country-specific factors related to financial reporting and the value relevance of accounting data. Journal of Accounting Research, 38(1), 1–21. https://doi.org/10.2307/2672920
  • Andrén, N., & Jankensgård, H. (2020). Disappearing investment-cash flow sensitivities: Earnings have not become a worse proxy for cash flow. Journal of Business Finance & Accounting, 47(5–6), 760–785. https://doi.org/10.1111/jbfa.12427
  • Arthur, N., Cheng, M., & Czernokowski, R. (2010). Cash flow disaggregation and the prediction of future earnings. Accounting & Finance, 50(1), 1–30. https://doi.org/10.1111/j.1467-629X.2009.00316.x
  • Ball, R., Gerakos, J., Linnainmaa, J. T., & Nikolaev, V. (2016). Accruals, cash flows, and operating profitability in the cross section of stock returns. Journal of Financial Economics, 121(1), 28–45. https://doi.org/10.1016/j.jfineco.2016.03.002
  • Barth, M. E., Landsman, W. R., & Lang, M. H. (2008). International accounting standards and accounting quality. Journal of Accounting Research, 46(3), 467–498. https://doi.org/10.1111/j.1475–679X.2008.00287.x
  • Bartov, E., Goldberg, S. R., & Kim, M. S. (2002). The Valuation-relevance of earnings and cash flows: An international perspective. Journal of International Financial Management & Accounting, 12(2), 103–132. https://doi.org/10.1111/1467-646X.00068
  • Boujelben, S., Khemakhem-Feki, H., & Alqatan, A. (2020). Real earnings management and the relevance of operating cash flows: A study of French listed firms. International Journal of Disclosure and Governance, 17(4), 218–229. https://doi.org/10.1057/s41310-020-00091-0
  • Bradbury, M. (2011). Direct or indirect cash flow statements? Australian Accounting Review, 21(2), 124–130. https://doi.org/10.1111/j.1835-2561.2011.00130.x
  • Camodeca, R., Almici, A., & Brivio, A. R. (2014). The value relevance of accounting information in the Italian and UK stock markets. Problems and Perspectives in Management, 12(4), 512–519. http://dx.doi.org/10.21511/ppm.15(1-1).2017.01
  • Charitou, A., Clubb, C., & Andreou, A. (2001). The effect of earnings permanence, growth, and firm size on the usefulness of cash flows and earnings in explaining security returns: Empirical evidence for the UK. Journal of Business Finance & Accounting, 28(5–6), 563–594. https://doi.org/10.1111/1468-5957.00385
  • Charitou, M., Karamanou, I., & Kopita, A. (2018). The determinants and valuation effects of classification choice on the statement of cash flows. Accounting and Business Research, 48(6), 613–650. https://doi.org/10.1080/00014788.2017.1407626
  • Charitou, M., Lois, P., & Vlittis, A. (2010). Do capital markets value earnings and cash flows alike? Journal of Applied Economic Sciences, 3(13), 173–183. https://www.ceeol.com/search/journal-detail?id=1011
  • Cutillas Gomariz, M. F., Sánchez Ballesta, J. P., & Yagüe, J. (2016). The effects of IFRS on net income and earnings components: Value relevance, persistence, and predictive value. Spanish Journal of Finance and Accounting, 45(3), 365–388. https://doi.org/10.1080/02102412.2016.1198562
  • Delvaille, P., Ebbers, G., & Saccon, C. (2005). International financial reporting convergence: Evidence from three continental European countries. Accounting in Europe, 2(1), 137–164. https://doi.org/10.1080/09638180500379103
  • Devalle, A., Onali, E., & Magarini, R. (2010). Assessing the value relevance of accounting data after the introduction of IFRS in Europe. Journal of International Financial Management and Accounting, 21(2), 85–119. https://doi.org/10.1111/j.1467-646X.2010.01037.x
  • Dhole, S., Gul, F. A., Mishra, S., & Pal, A. M. (2021). The joint information role of analystsćash flow and earnings forecasts. Accounting & Finance, 61(1), 499–541. https://doi.org/10.1111/acfi.12581
  • Easton, P. D., & Harris, T. S. (1991). Earnings as an explanatory variable for returns. Journal of Accounting Research, 29(1), 19–36. https://doi.org/10.2307/2491026
  • Fama, E. F., & French, K. R. (2015). A five-factor asset pricing model. Journal of Financial Economics, 116(1), 1–22. https://doi.org/10.1016/j.jfineco.2014.10.010
  • Farshadfar, S., & Monem, R. (2013). The usefulness of operating cash flow and accrual components in improving the predictive ability of earnings: A re-examination and extension. Accounting & Finance, 53(4), 1061–1082. https://doi.org/10.1111/j.1467-629X.2012.00486.x
  • Farshadfar, S., Monem, R., & Smith, T. (2019). Further evidence of the relationship between accruals and future cash flows. Accounting & Finance, 59(1), 143–176. https://doi.org/10.1111/acfi.12260
  • Feltham, G. A., & Ohlson, J. A. (1995). Valuation and clean surplus accounting for operating and financial activities. Contemporary Accounting Research, 11(2), 689–731. https://doi.org/10.1111/j.1911-3846.1995.tb00462.x
  • Foerster, S., Tsagarelis, J., & Wang, G. (2017). Are cash flows better stock return predictors than profits? Financial Analysts Journal, 73(1), 73–99. https://doi.org/10.2469/faj.v73.n1.2
  • Francis, J. (2010). The relative informational content of operating and financing cash flows in the proposed cash flow statement. Accounting & Finance, 50(4), 829–851. https://doi.org/10.1111/j.1467-629X.2010.00344.x
  • Frankel, R. M., & Sun, Y. (2018). Predicting accruals based on cash-flow properties. The Accounting Review, 93(5), 165–186. https://doi.org/10.2308/accr-52001
  • Habib, A. (2008). The role of accruals and cash flows in explaining security returns: Evidence from New Zealand. Journal of International Accounting, Auditing and Taxation, 17(1), 51–66. https://doi.org/10.1016/j.intaccaudtax.2008.01.003
  • Hollie, D., Shane, P. B., Zhao, Q., & Cahan, S. (2017). The role of financial analysts in stock market efficiency with respect to annual earnings and its cash and accrual components. Accounting & Finance, 57(1), 199–237. https://doi.org/10.1111/acfi.12138
  • Horton, J., Serafeim, G., & Serafeim, I. (2008). Does mandatory IFRS adoption improve the information environment? Contemporary Accounting Research, 30(1), 388–423. https://doi.org/10.1111/j.1911-3846.2012.01159.x
  • Hribar, P., & Collins, D. W. (2002). Errors in estimating accruals: implications for empirical research. Journal of Accounting Research, 40(1), 105–134. https://doi.org/10.1111/1475–679X.00041
  • Hung, M. (2001). Accounting standards and value relevance of financial statements: An international analysis. Journal of Accounting and Economics, 30(3), 401–420. https://doi.org/10.1016/S0165-4101(01)00011-8
  • Imam, S., Chan, J., Zulfiqar, S., & Shah, A. (2013). Equity valuation models and target price accuracy in Europe: Evidence from equity reports. International Review of Financial Analysis, 28, 9–19. https://doi.org/10.1016/j.irfa.2013.02.008
  • International Accounting Standards Board, IASB (2018). Conceptual Framework for Financial Reporting. https://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/
  • Kaserer, C., & Klingler, C. (2008). The accrual anomaly under different accounting standards – Lessons learned from the German experiment. Journal of Business Finance & Accounting, 35(7–8), 837–859. https://doi.org/10.1111/j.1468-5957.2008.02089.x
  • Kent, R. A., & Birt, J. (2021). IAS 7 and value relevance: The direct method versus the indirect method. Review of Accounting Studies, 26(4), 1352–1586. https://doi.org/10.1007/s11142-021-09584-x
  • Kent, R. A., & Bu, D. (2020). The importance of cash flow disclosure and cost of capital. Accounting & Finance, 60(S1), 877–908. https://doi.org/10.1111/acfi.12382
  • Li, J. Q., & Ding, Y. (2008). Institutional effects on informational content of US and French management earnings forecasts: Evidence from market reactions and analyst revisions. Advances in Accounting, 24(1), 101–109. https://doi.org/10.1016/j.adiac.2008.05.004
  • Lu, M., Shan, Y., Wright, S., & Yu, Y. (2018). Operating cash flow asymmetric timeliness in Australia. Accounting & Finance, 60(1), 587–627. https://doi.org/10.1111/acfi.12349
  • Miller, M. H., & Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. The Journal of Business, 34(4), 411–433. https://doi.org/10.1086/294442
  • Novy-Marx, R. (2013). The other side of value: The gross profitability premium. Journal of Financial Economics, 108(1), 1–28. https://doi.org/10.1016/j.jfineco.2013.01.003
  • Onali, E., Ginesti, G., & Vasilakis, C. (2017). How should we estimate value-relevance models? Insights from European data. British Accounting Review, 49(5), 460–473. https://doi.org/10.1016/j.bar.2017.05.006
  • Orpurt, S. F., & Zang, Y. (2009). Do direct cash flow disclosures help predict future operating cash flows and earnings? The Accounting Review, 84(3), 893–935. https://doi.org/10.2308/accr.2009.84.3.893
  • Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, İ. (2005). Accrual reliability, earnings persistence and stock prices. Journal of Accounting and Economics, 39(3), 437–485. https://doi.org/10.1016/j.jacceco.2005.04.005
  • Sahin, O. F. (2020). REIT cash flows and stock returns. Journal of Accounting & Finance, 20(3), 64–72. https://doi.org/10.33423/jaf.v20i3.3009
  • Sidhu, B. K., & Yu, C. (2021). Direct method operating cash flow disclosures: Determinants and incremental usefulness. Abacus, 57(3), 421–467. https://doi.org/10.1111/abac.12238
  • Troilo, M., Walkup, B. R., Abe, M., & Lee, S. (2019). Legal systems and the financing of working capital. International Review of Economics & Finance, 64, 641–656. https://doi.org/10.1016/j.iref.2018.01.010
  • Wang, P. (2013). The role of disaggregation of earnings in stock valuation and earnings forecasting. Accounting and Business Research, 43(5), 530–537. https://doi.org/10.1080/00014788.2013.804794