Empirical Research On Correlation Between The Cash Flow And The Profit Of The Public Limited Company

According to Western accounting theory, disclosing the statement of cash flowcould increase the information correlation. The Public Limited Company in China beganto work out the statement of cash flow since 1998 according to the request of theMinistry of Finance. Will the situation of the Public Limited Company in China bereverent to the Western accounting theory? Moreover, whether the cash flow supports theprofit advantageously and can be showed up in the company's financial report is the keypoint of this article.This article chooses the Public Limited Company (1998-2004) as a sample,analyzing whether the correlation between the cash flow and the profit statement of thePublic Limited Company is strengthening and whether disclosing the statement of cashflow could increase the information correlation to prove how much correlation betweenthe two statements, under the accounting supervision with theory and empirical research.If the correlation strengthened with the accounting supervision environment's changing,we can promote it more reasonably.