A Lancaster University Management School (LUMS) accounting researcher is influencing major international standard setters with his work on cash flow statements.

Dr Zhan Gao, a Senior Lecturer in the Department of Accounting and Finance, provided evidence to a full board meeting of the International Accounting Standards Board (IASB) in London.

The IASB develop the International Financial Reporting Standards (IFRS) – the global language of business. IFRS are trusted by investors worldwide and required by more than 140 jurisdictions and permitted in many more.

Dr Gao (above right) collaborated with Ana Simpson (above left), a member of the IASB technical staff, to write a report summarising academic evidence on the statement of cash flows (International Accountancy Standard 7). These statements measure inflows and outflows of cash – or equivalents – from an organisation. They are effectively report cards of private entities and are used extensively by investors and lenders in critical business decisions. Dr Gao has developed considerable expertise in these areas through his research.

He said: “The IFRS are a globally influential set of standards for business, and it is important to understand how they all operate. Being able to present evidence along with colleagues from the IASB technical team can help to encourage further discussion and analysis among the IASB and hopefully shape future actions.”

After hearing the evidence, the IASB has officially initiated a project to improve the statement of cash flows.

The full IASB board meeting can be watched online.