The decision usefulness of cash-flow statements by Australian reporting entities: some further evidence

This paper investigates further the findings of a survey on cash-flow reporting presented by Joneset al. (1995). Their study both corroborated and extended on previous UK and US research which demonstrated the decision relevance and utility of the CFS (see for example Lee, 1981; McEnroe, 1989). However, their results were both preliminary and generic. No attempt was made in their paper to examine the combined effects of two or more variables on attitudes and ratings of the decision usefulness capabilities of the CFS by respondents. This analysis will clearly impact on the authors' conclusions. By examining specific hypotheses and a priori relationships between variables, more rigorous, structured and refined tests of the decision usefulness functions of the CFS can be established. The results of the present study indicate that three independent variables were highly correlated with support for the CFS: firm size; the focus of a firm's financial reporting responsibility; and the incidence of companies preparing CFSs prior to the introduction of AASB 1026.