Managers' incentives for issuing cash flow forecasts

Suzan Abed, Clare Roberts and Khaled Hussainey ()

International Journal of Accounting, Auditing and Performance Evaluation, 2014, vol. 10, issue 2, 133-152

Abstract: This study examines a recent change in voluntary disclosure by investigating the issuance of management cash flow forecasts for a sample of 690 UK non-financial firm-year observations which are drawn from the top 500 UK listed firms by total market capitalisation as listed by Financial Times on 30 March 2007. Automated content analysis is used to search for cash flow forecasts in annual reports narratives using QSR NVivo 8. The results of regression analysis provide support for institutional theory that companies try to imitate the disclosure practices of other companies in the same industry. Also, the results document that operating cash flow, industry behaviour, cross-listing, and company size are positively and significantly related to disclosure of cash flow forecasts, whereas performance and competition rate are negatively and significantly related to disclosure of cash flow forecasts. However, the results fail to find any significant relationship between normative or coercive isomorphism proxies and disclosure of cash flow forecasts.

Keywords: narrative disclosure; cash flow forecasts; industry behaviour; imitation; leadership; mimetic isomorphism; normative isomorphism; coercive isomorphism; automated content analysis; institutional theory; forward-looking information; panel data; QSR NVivo 8; manager incentives; voluntary disclosure; annual reports. (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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