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Cash-Flow Reporting Between Potential Creative Accounting Techniques And Hedging Opportunities Case Study Romania

Author

Listed:
  • Dumitru Matis
  • Alina Beattrice Vladu
  • Laura Negrea

Abstract

We have studied the cash flow reporting issues in Romania, trying to establish if there is an interest in using creative accounting techniques in order to manipulate cash flow reporting. Another issue of our research is focused on the possibility of using hedging opportunities by financial managers of Romanian companies, in order to at least partially protect future cash-flow from external fluctuating factors. In order to achieve our goals, we have issued a questionnaire, submitted to authorize auditors from Romania (208 audit companies and 267 individual auditors). Our study lead us to conclude that creative accounting techniques related to cash flow are only partly known and used by the Romanian companies. On the other hand, hedging techniques were found to be very little known and used by Romanian managers. In this respect, the few instruments used are related to bank and insurance products like factoring, receivables insurance, financial instruments based on interest and foreign exchange rates.

Suggested Citation

  • Dumitru Matis & Alina Beattrice Vladu & Laura Negrea, 2009. "Cash-Flow Reporting Between Potential Creative Accounting Techniques And Hedging Opportunities Case Study Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-13.
    • Handle: RePEc:alu:journl:v:1:y:2009:i:11:p:13
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    File URL: http://oeconomica.uab.ro/upload/lucrari/1120091/13.pdf
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    References listed on IDEAS

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    1. Froot, Kenneth A & Scharfstein, David S & Stein, Jeremy C, 1993. "Risk Management: Coordinating Corporate Investment and Financing Policies," Journal of Finance, American Finance Association, vol. 48(5), pages 1629-1658, December.
    2. Francis, J & Olsson, P & Oswald, DR, 2000. "Comparing the accuracy and explainability of dividend, free cash flow, and abnormal earnings equity value estimates," Journal of Accounting Research, Wiley Blackwell, vol. 38(1), pages 45-70.
    3. DeFond, Mark L. & Hung, Mingyi, 2003. "An empirical analysis of analysts' cash flow forecasts," Journal of Accounting and Economics, Elsevier, vol. 35(1), pages 73-100, April.
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    Cited by:

    1. Diana Andreea Traistaru, 2015. "The Development And Impact Of The Progress Of Accounting Standards On International Co-Operation And European Integration," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(43), pages 299-308.

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    More about this item

    Keywords

    cash flow; creative accounting; hedging opportunities;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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