Title: Motivation for voluntary disclosure of cash flow statements in non-listed medium-sized companies

Authors: Finn Schøler

Addresses: School of Business and Social Sciences, Department of Economics and Business, Aarhus University, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark

Abstract: In some EU member states, medium-sized companies are under the obligation to present a cash flow statement, but there are exemption rules similar to those for subgroups' exemption from presenting consolidated financial statements. In a sample consisting of 385 Danish companies, we found that 29 were actually exempted from presenting consolidated financial statements, but chose to voluntarily disclose the cash flow statement. In this study, we investigate the motivation that the companies had for voluntarily disclosing this information. Much to our surprise, for the majority tradition seemed to be the main motivating factor for presenting the cash flow statement, and not an intention of fulfilling the needs of the annual report's users. We also found that some of the companies that voluntarily disclosed information would like to discontinue doing so, but they did not dare to change the accounting practice because of a potential negative reaction.

Keywords: voluntary disclosure; corporate transparency; cash flow statements; small and medium-sized enterprises; SMEs; non-listed companies; disclosure motivation; Denmark; annual reports; accounting.

DOI: 10.1504/IJBAF.2016.079879

International Journal of Behavioural Accounting and Finance, 2016 Vol.6 No.1, pp.54 - 69

Received: 21 Mar 2016
Accepted: 06 Jul 2016

Published online: 19 Oct 2016 *

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