A Study of Relationship between Accruals and Managerial Operating Decisions among Listed Firms in Tehran Stock Exchange

Abstract

The link between accruals and managerial operating decisions was examined in 1,880 firm- year (235 firms in 8 years) in 2011 among the firms listed in Tehran Stock Exchange (TSE) for the period 2002 to 2009 using backward multiple linear regression (BMLR) on modified accruals as criterion variable and performance as predictor. First, the regression over total modified accruals, prior to eliminating of outliers, was examined through SPSS and then, final regression results, after eliminating all outliers, were analyzed. Among the managerial operating variables (capital expenditure, variations in revenue, cash flow from operating activities (CFO) and cash flow from financing activities (CFF), firm age, and cost of goods sold (CGS)), firm age and CGS were not significantly related to accruals while a significant relationship was found between the rest of the variables (capital expenditures, variation in revenue, CFO, and CFF) and accruals