IDEAS home Printed from https://ideas.repec.org/a/jfr/ijfr11/v6y2015i4p1-9.html
   My bibliography  Save this article

Is Cash Flow per Share Paternalism by U.S. Accounting Rule Makers Warranted? An Empirical Study

Author

Listed:
  • Ning Du
  • John E. McEnroe

Abstract

The Financial Accounting Standards Board (FASB) prohibits the reporting of cash flow per share (CFPS) information from the financial statements in fear of undermining the importance of the earning per-share metric. The objective of our research is to understand the validity of this argument by examining the effects of cash flow per share information on investors¡¯ judgments. We conducted a two by one experiment where we manipulate cash flow per share as the absence or presence of the statistic in the financial statements. Eighty-eight MBA students assumed the role of investors and participated in this study. We find that the cash flow per share information affects investors¡¯ reliance on cash flow information, but does not affect participants¡¯ performance evaluation. Our results are in support of including CFPS in the income statement as it may lead investors to pay more attention to cash flow information.

Suggested Citation

  • Ning Du & John E. McEnroe, 2015. "Is Cash Flow per Share Paternalism by U.S. Accounting Rule Makers Warranted? An Empirical Study," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(4), pages 1-9, October.
    • Handle: RePEc:jfr:ijfr11:v:6:y:2015:i:4:p:1-9
    DOI: 10.5430/ijfr.v6n4p1
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/7740/4624
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/7740
    Download Restriction: no
    File URL: https://libkey.io/10.5430/ijfr.v6n4p1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:ijfr11:v:6:y:2015:i:4:p:1-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gina Perry (email available below). General contact details of provider: http://ijfr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.