Open AccessA study on relationship between earnings management and operating cash flows management: Evidence from Tehran Stock Exchange
Author(s) -
Bahman Banimahd,
Mina Jalali Aliabadi
Publication year - 2013
Publication title -
management science letters
Language(s) - English
Resource type - Journals
eISSN - 1923-9343
pISSN - 1923-9335
DOI - 10.5267/j.msl.2013.05.018
Subject(s) - earnings management , operating cash flow , cash management , cash flow , business , cash flow forecasting , stock exchange , cash flow statement , monetary economics , financial management , cash on cash return , finance , cash and cash equivalents , earnings , economics
This study investigates the impact of earnings management on operating cash flows management over the period 2004-2011 using the information of 119 firms listed on the Tehran Stock Exchange. Results indicate that there is a meaningful relationship between earnings management and operating cash flows management. In other words, earnings management creates and shapes operating cash flows management. In addition, after controlling for the loss reporting, firm size and firm's financial risk, the results show that there was a relationship between loss reporting and firm size with the cash flows management. When firms report loss, then operating cash flows increases. Finally, operating cash flows decreases when firm size increases. However, our survey does not provide any evidence to believe there is any relationship between financial risk and cash flows management