A Study of the Disclosure Level of Cash Flow Statement

Abstract

Abstract: This study empirically investigates the factors influencing the disclosure level in Sri Lankan companies and provides evidence of factors associated with the level of disclosure requirement. The factors examined were, company size, profit after tax, cash and cash equivalents, cash flow from operating activities, investing activities and financing activities of the statement of cash flow. For this purpose, a disclosure index was developed representing the provisions given in Lanka Accounting Standard (LKAS)-07; Statement of cash flow. Annual reports of eight public companies in the plantation sector were examined against the disclosure index. The data gathered were statistically analyzed by refereeing to the content of disclosures. The findings of this study indicate that Sri Lankan companies have better disclosure level. The analysis indicates R-square value of 0.55 for overall disclosure level, despite the fact that independent variables show a low R-square value. Therefore, the level of disclosure can be regarded as favorable in terms of information needs of various interested parties of the companies.