Abstract

Among the most important cases considered in financial statements by investors and other users of financial statements is earnings-related information. Given the need of the users of financial statements for the future information of companies and use of past data to predict the future, it seems that earnings forecast is among the favorite items of investors. In fact, earnings forecast by the management provides information about the future of companies. The main objective of the present study is to investigate the effect of surplus free cash flow, corporate governance and firm size on earnings predictability in companies listed in Tehran Stock Exchange. This research is an applied study and of post-event causal type. For data analysis, OLS regression method has been applied using Eviews‏ software. The research results demonstrate that there is a statistically significant relationship between earnings predictability and surplus free cash flow and good corporate mechanisms play a positive role in the relationship between surplus free cash flow and earnings predictability. According to the results, in large companies, good corporate mechanisms enhance the relationship between surplus free cash flow and earnings predictability.

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