عوامل تعیین کننده و پیامدهای اقتصادی صورت جریان های نقدی
Abstract
1- Introduction
2- Background, related literature, and hypothesis development
3- Research design and sample selection criteria
4- Descriptive statistics and empirical findings
5- Summary and conclusions
References
Abstract
The FASB, PCAOB, SEC, and AICPA have all acknowledged that the accounting field needs to revisit the statement of cash flows (SCF). While the overall number of restatements has held steady over the past five years, the percentage of cash flow restatements (CFRs) has risen from 8.7% of all restatements in 2009 to 20.2% of all restatements in 2014. We examine the determinants of CFRs, investors’ differential beliefs about CFRs, and the information content of CFRs by focusing on abnormal trading volume and price reactions to CFRs. We then examine whether the guidance the SEC/AICPA published in early 2006 changed the information content of CFRs. Finally, since the proper classification within the SCF is a current regulatory issue, we examine whether classification shifting within the SCFs impacts the market. The market finds CFRs to be informative with some investor disagreement as shown by higher abnormal trading volume. We also find an incremental volume reaction to changes in operating cash flows after the SEC allowance period. While the market responds negatively to CFRs, we find that the market does not differentiate between whether classification shifting occurs or does not occur with the CFR. This study has implications for policymakers, auditors, and investors since it is one of the first to examine the capital market consequences of CFRs.
Introduction
The purpose of this study is to examine the determinants and information content of cash flow restatements (CFRs). This study is the first to examine the abnormal trading volume and market price reactions to CFRs using a comprehensive multivariate analysis. We contribute to the literature by analyzing a dataset of CFRs that has rarely been studied, despite regulators’ recent interest in CFRs. We also analyze how investors perceive and react to this type of restatement. We contribute to literature on restatements by showing that the information content of CFRs is incrementally informative for investors and is incremental to the information contained in earnings restatements. While we provide evidence that the abnormal trading volume reaction to changes in operating cash flows increases after the SEC allowance period, we find that when classification shifting occurs within the statement of cash flows resulting from a CFR, there is no significant difference with abnormal trading volume or market returns reaction.2 The American Institute of Certified Public Accountants (AICPA), Financial Accounting Standards Board (FASB), Public Company Accounting Oversight Board (PCAOB), and the Securities and Exchange Commission (SEC) have all acknowledged that the accounting profession needs to revisit the statement of cash flows (SCF). While the overall number of restatements has held steady over the past five years, the percentage of CFRs has not. The SEC first dealt with the issue of misclassification of items in SCFs in 2005. The result was the SEC gave firms an allowance period to correct misclassified SCFs without penalty in 2006. The Center for Public Company Audit Firms (CPCAF) published Alerts #90 and then #98 to help firms determine whether or not to restate the SCFs. Most restatements at that time were related to the misclassification of items among the operating, investing, and financing categories within the SCFs. Following the SEC allowance period there was a decline in CFRs from 2006 to 2009. However, there has been a resurgence of cash flow restatements; the percentage of SCFs that were restated rose from 8.7% in 2009 to 20.2% in 2014.3 The reasons for restatements vary, but most do not involve complex determinations of underlying cash flow problems, and many of the issues with the original SCFs have been related to misclassifications. As a result, in 2014, the FASB acknowledged that the SCFs have been neglected by the standard setting bodies (FASB, 2014). The following year, the FASB asked the Emerging Issues Task Force to consider nine issues related to the SCFs to address this problem. The SEC also noted an increase in the number of restatements related to errors in SCFs (Crews, 2014). They called for companies to tighten accounting procedures and controls pertaining to the SCFs. The PCAOB also noted the same issue and hired inspectors to evaluate auditors’ testing of the SCFs (PCAOB, 2015). Consequently, the statement of cash flows continues to be a topic of interest for regulators.