Research has concluded that there has been a decline in the informativeness of financial reports over recent years. The reported decline has been attributed to an increasing mismatch of expenses to revenues in the income statement. This paper challenges this attribution: Mismatching that results...

Considerable research has been devoted to the evaluation of accrual accounting, with an accrual-cash flow relation at the center of the investigation. However, much of the research is based on misconceptions. First, accruals are defined as changes in balance sheet items, but these are not the...

Research has concluded that there has been a decline in the informativeness of earnings over recent years. The reported decline has been attributed to an increasing mismatch of expenses to revenues from the increasing expensing of investment to the income statement. This paper challenges this...