Accounting and Auditing Studies

Accounting and Auditing Studies

The role of accounting accruals for the prediction of future cash flows of listed companies in Tehran Stock Exchange

Document Type : Original Article

Authors
Saeid Jabbarzadeh Kangarluei
Bita Dehghan Khanghahi
10.22034/iaas.2013.105411
Abstract
The prediction of future cash flows and its changes as economic events, long has favored capital investors, managers, financial analysts, creditors and the researchers. The attention is Because of the application of cash flows in the stock assessment models, evaluate solvency (dividends, interest and other liabilities), risk assessment, evaluation of economic performance and stewardship of management and how to choose the methods of accounting by management. So if the cash flows can be predicted, will provide a suitably major portion of the information needs related to cash flow.
This study investigates the role of accounting accruals for the prediction of future cash flows. Study sample included 74 listed companies in Tehran Stock Exchange (TSE) during 2003 to 2010. In this regard, two hypotheses formulated and to test research hypotheses, multiple regression analysis was used. Findings show that with the addition of accounting accruals to current cash flow model, the power to predict future cash flows increases and also the explanatory power of accounting accruals in the prediction of future cash flows in the presence of accounting items manipulation reduces.
Keywords
Accruals
Operating Cash Flows
Tehran Stock Exchange
Accounting and Auditing Studies
Volume 2, Issue 6
Summer 2020
Pages 32-47