This research examines the usefulness of direct method cash flow information; in particular, whether the direct method leads to more accurate predictions of future operating cash flows than the indirect method. The contributions of this research are in tow areas. First, we study whether the direct method is empirically superior to the indirect method in predicting future cash flows. Second, we provide evidences that information about the gross amounts of cash receipts and cash payments is more relevant than information about the net amounts of cash receipts and payments. Our results, based on yearly and pooled models, suggest that direct method information has a higher predictive ability than indirect method information in Tehran stock exchange (TSE) during 1380-1386.
Pourheydari, O., Nazemi Ardakani, M., & Mohammadi, A. (2009). A Comparative Review of Predictive Ability of Direct and Indirect Methods Cash Flow Information. Accounting and Auditing Review, 16(3), -.
MLA
Omid Pourheydari; Mahdi Nazemi Ardakani; Amir Mohammadi. "A Comparative Review of Predictive Ability of Direct and Indirect Methods Cash Flow Information", Accounting and Auditing Review, 16, 3, 2009, -.
HARVARD
Pourheydari, O., Nazemi Ardakani, M., Mohammadi, A. (2009). 'A Comparative Review of Predictive Ability of Direct and Indirect Methods Cash Flow Information', Accounting and Auditing Review, 16(3), pp. -.
VANCOUVER
Pourheydari, O., Nazemi Ardakani, M., Mohammadi, A. A Comparative Review of Predictive Ability of Direct and Indirect Methods Cash Flow Information. Accounting and Auditing Review, 2009; 16(3): -.
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