-
Journal menu
- General information
- Editorial Board and External Reviewers
- Journal Policies
- Publication Ethics and Malpractice Statement
- Instructions for authors
- Paper reviewing
- Article processing charge
- Feedback from stakeholders
- Journal’s Open Access statement
- Order hard copies of the journal
- 50 most cited papers in the journal
DISCRETIONARY ACCRUALS AND THE PREDICTIVE ABILITY OF EARNINGS IN THE FORECAST OF FUTURE CASH FLOWS: EVIDENCE FROM AUSTRALIA
Download This ArticleAbstract
We examine whether discretionary and non-discretionary accruals improve the predictive ability of earnings for forecasting future cash flows in an Australian context. Using both within-sample and out-of-sample forecasting tests; we demonstrate that discretionary accruals improve the predictive ability of earnings in the forecast of future cash flows. Further, discretionary and non-discretionary accruals and direct method cash flow components together are more useful than (i) aggregate earnings, (ii) aggregate cash flow from operations and total accruals, and (iii) aggregate cash flow from operations, discretionary accruals and nondiscretionary accruals.
Keywords: Discretionary Accruals, Nondiscretionary Accruals, Cash Flow, Earnings, Future Cash Flows, Australia
How to cite this paper: Farshadfar, S., & Monem, R. (2011). Discretionary accruals and the predictive ability of earnings in the forecast of future cash flows: Evidence from Australia. Corporate Ownership & Control, 9(1-6), 597-608. https://doi.org/10.22495/cocv9i1c6art3