CHAPTER 5

The Timing of Events

About This Chapter

The production of financial reports raises several problems. The issues are, in different ways, frequently concerned with timing. The use of the accruals concept may give the figure of profit for a financial period but tells us little about the actual cash, both in and out, over which management has control. A number of studies have demonstrated the importance of users receiving cash flow information and have confirmed that earnings, net assets, and cash flows from investment ranked first separately as critical variables with stockbrokers.

A 12-month reporting cycle may provide information of substance for that period, but investors may require information more frequently than this for decision ...

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