Impact of Institutional Ownership and Board Independence on the Relationship Between Excess Free Cash Flow and Earnings Management

Advances in Mathematical Finance and Applications

مقاله 8، دوره 2، شماره 3، آذر 2017، صفحه 91-105   

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2017.533104

نویسندگان

Allahkaram Salehi^{* 1}؛ Sajjad Mohammadi²؛ Marzieh Afshari²

¹Department of Accounting, Masjed-Soleiman Branch, Islamic Azad University, Masjed-Soleiman, Iran

²Department of Accounting, Khoramshar-Persian Gulf International Branch, Islamic Azad University, Khoramshar, Iran

چکیده

However, the free cash flows scale is important for the financial health of the company, but it has also its own limitations. Moreover, it’s not immune from accounting tricks. Free cash flows can be considered as a measure of value for shareholders of listed companies on Tehran Stock Exchange. The managers of these companies have tended to use the earnings management for managing the free cash flow and ultimately shareholder value and wealth. The main objective of this study is to investigate the interactive effect of institutional ownership and board independence on the relationship between excess free cash flow and earnings management in the Tehran Stock Exchange. The study is applied and correlation research by its objective and nature. The variables used in this study have been extracted from the financial reports of listed companies in Tehran Stock Exchange and the web page of Tehran Stock Exchange in the period of 2009 to 2015. The results suggest that, "institutional ownership" and "board independence" on the relationship between "surplus free cash flow and earnings management" had no significant effect.

کلیدواژه‌ها

Institutional Ownership؛ Board Independence؛ Excess Free Cash Flow؛ Earnings Management

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