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Matching Expenses with Revenues Around the World

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International Perspectives on Accounting and Corporate Behavior

Part of the book series: Advances in Japanese Business and Economics ((AJBE,volume 6))

Abstract

The purpose of this research is to examine changes in the relation between revenue and expense over the last 16 years around the world. I show that the correlation between revenue and expense has declined around the world, especially in English Speaking countries. Meanwhile, it has not necessarily decreased in the Far East countries and Western Europe countries. In addition, I investigate the relation between earnings smoothness and matching, based on the analysis of the country-year data, and analyzed the relation between the current accuruals and current and next cash flows from operations in each country. These results suggest that accrual process, supported by matching and accruals, promotes the earnings smoothing and signaling the future cash flows in the Far East countries, especially in Japan. These findings indicate that there are major differences in the roles of matching around the world.

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Author information

Authors and Affiliations

  1. Graduate School of Commerce and Management, Hitotsubashi University, 2-1 Naka, Kunitachi, Tokyo, 186-8601, Japan

    Tetsuyuki Kagaya

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  1. Tetsuyuki Kagaya
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Correspondence to Tetsuyuki Kagaya .

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Editors and Affiliations

  1. Graduate School of Commerce and Management, Hitotsubashi University, Kunitachi, Tokyo, Japan

    Kunio Ito

  2. Graduate School of Commerce and Management, Hitotsubashi University, Kunitachi, Tokyo, Japan

    Makoto Nakano

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Kagaya, T. (2014). Matching Expenses with Revenues Around the World. In: Ito, K., Nakano, M. (eds) International Perspectives on Accounting and Corporate Behavior. Advances in Japanese Business and Economics, vol 6. Springer, Tokyo. https://doi.org/10.1007/978-4-431-54792-1_4

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