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Operating cash flow asymmetric timeliness in Australia
Author(s) -
Lu Meiting,
Shan Yaowen,
Wright Sue,
Yu Yimeng
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12349
Subject(s) - cash flow , business , product (mathematics) , monetary economics , actuarial science , economics , finance , geometry , mathematics
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.