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A Survey of the Role of Earnings Quality in Accurately Forecasting of Operational and Cash Circulation of Companies Listed on Tehran Stock Exchange

Akbar Jelodari () and Fatemeh Asadi Kordshouli ()

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2016, vol. 6, issue 4, 82-89

Abstract: Accuracy of financial prediction is one of the important goals of financial reporting as important information is provided for internal and external users. Accounting profit and its components are the information considered during decision making by people. The present study aimed to evaluate the relations and role of earnings quality on accuracy of prediction of operating cash flow of companies listed on TSE. To achieve study purpose, 25 active industries during 5 years (2009-2013) are selected. Then, by Cochran’s formula, a sample of 50 companies is selected. Based on the results of study, we can say by increase of earnings quality, accuracy of cash flow and operations forecast can be increased. Thus, earnings quality is a reliable criterion for accuracy of financial forecast of business units.

Keywords: Earnings quality; working capital; prediction of financial variables; operating activities; financial reporting (search for similar items in EconPapers)
Date: 2016
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