Operating cash flow asymmetric timeliness in Australia. (8th March 2018)

• Record Type: Journal Article
• Authors: Lu, Meiting; Shan, Yaowen; Wright, Sue; Yu, Yimeng
• Is Part Of: Accounting and finance. Volume 60(2020)Supplement 1
• Page Start: 587
• Page End: 627
• Publication Date: 2018-03-08
• Subjects: Operating cash flow -- Asymmetric timeliness -- Firm life cycle -- Cost stickiness; Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/acfi.12349
• Languages: English
• ISSNs: 0810-5391

Abstract

Abstract: Operating cash flow (CFO) asymmetric timeliness occurs when CFO reflects bad news more quickly than good news. We examine the presence and determinants of CFO asymmetric timeliness in Australia, where substantial differences in reporting requirements of cash flow components, in characteristics of listed companies and in the degree of conservative financial reporting produce contrasting findings to those in the United States. We find supportive evidence for the novel 'sticky cost behaviour' explanation and also the product‐pricing strategy, but not the life cycle hypothesis. These findings are useful for investors and analysts concerned with forecasting the future values of companies.