Matching Expenses with Revenues Around the World

Tetsuyuki Kagaya ()
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Tetsuyuki Kagaya: Hitotsubashi University

A chapter in International Perspectives on Accounting and Corporate Behavior, 2014, pp 81-106 from Springer

Abstract: Abstract The purpose of this research is to examine changes in the relation between revenue and expense over the last 16 years around the world. I show that the correlation between revenue and expense has declined around the world, especially in English Speaking countries. Meanwhile, it has not necessarily decreased in the Far East countries and Western Europe countries. In addition, I investigate the relation between earnings smoothness and matching, based on the analysis of the country-year data, and analyzed the relation between the current accuruals and current and next cash flows from operations in each country. These results suggest that accrual process, supported by matching and accruals, promotes the earnings smoothing and signaling the future cash flows in the Far East countries, especially in Japan. These findings indicate that there are major differences in the roles of matching around the world.

Keywords: Accounting attributes; Accruals; International comparison; Matching concept; Path dependence (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-4-431-54792-1_4

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DOI: 10.1007/978-4-431-54792-1_4

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