Title Page
Contents
ABSTRACT 7
1. Introduction 8
1.1. Motivation 8
1.2. Research Objective 10
2. Literature Review and Hypothesis Development 13
2.1. Literature Review 13
2.1.1. Issues on Cash Flow Statement and the reliability of Cash Flows versus Earnings 13
2.1.2. Prior Literature on Classification of Interests and Dividends 14
2.1.3. Problems occur due to the different classification choices 17
2.2. Hypothesis 17
2.2.1. OCF-Increasing Classification Choices 17
2.2.2. Firm characteristics and classifications choices 18
2.2.3. Hypothesis development 19
3. Sample selection and classification choices 23
3.1. Sample selection 23
3.2. Description of the classification choices 25
4. Results 27
4.1. Descriptive Statistics and Correlations 27
4.1.1. Descriptive Statistics 27
4.1.2. Correlation Analysis 28
4.2. Chi-Square test 28
4.3. Logistic Regression Analysis 29
4.4. Small Sample analysis 30
5. Conclusion 37
References 39
Table 1. Sampling Distribution and Random Sample Selection Process 41
Table 2. Classification of Interest Received or Paid and Dividend Received or Paid at the adoption year 42
Table 3. Variable Definition 44
Table 4. Descriptive Statistics 46
Table 5. Correlation Analysis 49
Table 6. Chi-Square Test 50
Table 7. Logit Analysis 53
Table 8. The firms that changed classification choices of Interest Received or Paid and Dividend Received during the selected sample period 54
Table 9. The firms that Disclosed Interest Received/Paid and Dividend Received in multiple sections during the selected sample period 54
Table 10 Panel A. Classification of Interest and Dividends by Audited Companies 55
Table 10 Panel B. Classification of Interest and Dividends by Industry 55