The effect of corporate governance mechanisms on the relationship between excess free cash flow and earnings forecast

The aim this paper is investigates the impact of corporate governance mechanisms on the relationship between excess free cash flow and earnings predictability. Earnings forecasts using regression relationship between of one-year-ahead operating cash flow and current earningsachieved.
Free cash flow surplus and corporate governance mechanisms (the ratio of independent directors, the Board of Directors, the duality of the role of the Director, the percentage of shares owned by institutional investors and management ownership of shares) as independent variables.Using a sample of 102 firms listed in the Tehran Stock Exchange between2010 to 2014 research done. To estimate the model, multiple linear regression model is used in the the cumulative data. The final result of the test hypotheses indicates that the excess free cash flow and Earnings forecasts and there is also corporate governance mechanisms (the ratio of independent directors, the Board of Directors, the duality of the role of Director, the percentage of shares owned by institutional investors and ownership of shares management) on the relationship between excess free cash flow and Earnings forecasts have no effect.