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The Use of the Statement of Cash Flows by Japanese SMEs

Author

Listed:
  • Katsuyoshi Okabe

    (Kyushu Kyoritsu University, Japan)

  • Martha G. Suez-Sales

    (University of Guam, Guam - USA)

Abstract

The purpose of the study is to analyze the usage of the statement of cash flows (SCF) by Japanese SMEs from the perspective of preparers. The paper analyzes how institutional mandates have shaped organizational behavior, and how these mandates reflect the country’s social and cultural values. We analyze this premise in respect to the usage of the statement of cash flows by Japanese SMEs. The study relies on institutional theory and cultural values to help explain the results obtained from a survey questionnaire. We focus on financial reporting behavior when the SCF is a noncompulsory disclosure under SMEs general guidelines. We analyze different variables including intent to make a public offering and the number of professional accounting staff, and find firm size to be significantly associated with the recognition and production of the statement of cash flows. We believe that our findings will be useful to the Japanese government in designing SME economic guidance for capital growth to improve capabilities and ensure sustainability.

Suggested Citation

  • Katsuyoshi Okabe & Martha G. Suez-Sales, 2021. "The Use of the Statement of Cash Flows by Japanese SMEs," Eurasian Journal of Business and Management, Eurasian Publications, vol. 9(4), pages 268-282.
    • Handle: RePEc:ejn:ejbmjr:v:9:y:2021:i:4:p:268-282
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    References listed on IDEAS

    as
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    2. Rahman, Asheq & Yammeesri, Jira & Perera, Hector, 2010. "Reply to the discussion on 'Financial reporting quality in international settings: A comparative study of the U.S.A, Japan, Thailand, France and Germany'," The International Journal of Accounting, Elsevier, vol. 45(1), pages 39-43, March.
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