Does Human Resource Investment for Internal Control System Enhance Future Cash Flow Predictability?

Jaehong Lee and Suyon Kim
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Jaehong Lee: Division of Accounting/Tax and Management Information Systems, Kyonggi University, Suwon 16227, Korea
Suyon Kim: Department of Accounting, Jeonbuk National University, Jeonju 54896, Korea

Sustainability, 2020, vol. 12, issue 20, 1-16

Abstract: Generating positive long-term cash flow is vital for a firm’s sustainability. In this paper, we consider the earnings in the forecasting of future cash flow from a human resource investment of an internal control system. Using the firms listed in the Korea Stock Exchange market from 2014 to 2018, we find that the current earnings are the components of cash flow forecasting, and this relationship is genuine in a firm equipped with sufficient internal control personnel and their experiences. These findings indicate that earnings are reliable when forecasting future cash flow for a firm with a well-operated foundation.

Keywords: internal control system; human resource investment; future cash flow predictability; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:20:p:8500-:d:428378

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