This paper examines the properties of accruals, cash flows and earnings in firm listed on Tehran Stock Exchange(TSE). Using a sample of 135 firm through 1383 to 1387(675 firm-year observations).
Firm-years are ranked and assigned in equal numbers to the ten deciles. Decile 1 contains firms with extreme negative accruals (extreme positive cash flows) and decile 10 includes firms with extreme positive accruals (extreme negative cash flows)
We define ROA as operating earning, and accruals and cash flows are scaled by total assets too, as to control variables for firm scale.
We start from three hypotheses about persistence of earnings and its components.
First we find that the persistence of earnings is more than cash flows in high accruals
Second the persistence of earnings is more than cash flows in low accruals
And third after decomposing ROA into cash flows and accruals, the cash flow component of earning is more persistent than the accrual component of earnings
Blue, G., Hasani, M., & Farahani, E. (2012). Survey of the relationship between Operating Earnings , accruals and Operating cash flows. Accounting and Auditing Research, 4(15), 116-133. doi: 10.22034/iaar.2012.104677
MLA
Ghassem Blue; Mohammad Hasani; Ehsan Farahani. "Survey of the relationship between Operating Earnings , accruals and Operating cash flows". Accounting and Auditing Research, 4, 15, 2012, 116-133. doi: 10.22034/iaar.2012.104677
HARVARD
Blue, G., Hasani, M., Farahani, E. (2012). 'Survey of the relationship between Operating Earnings , accruals and Operating cash flows', Accounting and Auditing Research, 4(15), pp. 116-133. doi: 10.22034/iaar.2012.104677
VANCOUVER
Blue, G., Hasani, M., Farahani, E. Survey of the relationship between Operating Earnings , accruals and Operating cash flows. Accounting and Auditing Research, 2012; 4(15): 116-133. doi: 10.22034/iaar.2012.104677
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