Vol. 2, Issue 1, Part A (2020)

One of the primary purposes of financial reporting is to provide information regarding the performance of a business unit through evaluation of earnings and other detailed information. The forecast of cash flows can provide important information for both intra-organizational and extra-organizational users. The purpose of the present research is to determine the role of earnings quality in forecast of cash flows from financing. To that end, the information regarding 50 firms active in 25 industries listed in TSE in a 5-year time-period (2009-2013) has been collected and analyzed using correlation and regression analysis and panel data method. The results suggest that the enhancement of earnings quality improves the forecast of financial variables especially future cash flows from financing.