Comparative Study of Primary and Restated Information Ability in Prediction of Future Cash Flow

This research investigates the management's influence in accrual items from two perspectives of earning-increasing and earning-decreasing management and the manager's opportunistic motives in order to compare the predictive ability of the primary and restated financial information. This research is aimed to determine the difference between the ability of the originally reported information and that of the re-stated information in predicting the future cash flows.
The sample consists of 72 firms listed in Tehran Stock Exchange during the period from 2005 to 2019. The results suggest that the predictive ability of the original information in explaining the future cash flow changes is higher than that of the re-stated information and also the difference between the predicting ability of the original and restated information is statistically meaningful and significant in opportunistic earning-increasing management cases and the non-opportunistic earning-decreasing management cases.