발생액의 질과 회계이익의 미래현금흐름 예측능력

This study investigates whether accounting earnings' ability to predict future cash flows is affected by the change in accruals quality. The current value of a firm can be estimated with the present value of the future cash flow streams. Therefore, the accurate prediction of future cash flows is the most important factor in valuation. This implies that earnings' ability to predict future cash flows is one of the most important characteristics that earnings should have in the perspective of information relevance. In this case, I expect earnings' ability to predict future cash flows to be improved as accruals maps past and future cash flows well. This paper defines accruals quality as the degree to which past and future cash flows are reflected in accruals and investigates empirically if earnings' ability to predict future cash flows is improved with accruals quality. Accruals quality is measured as standard deviation of residuals which we get by regressing accruals on past, current, and future cash flows, following Dechow․Dichev(2002). The sample used in the analysis is 4,018 firm-years, selected from non-financial firms listed on Korean Securities Markets during 1999 to 2008, on each year-end. The results are as follows. First, although both earnings and cash flows have the incremental ability to predict future cash flows to each other, earnings' ability to predict future cash flows is larger than current cash flows' ability. Second, earnings' ability to predict future cash flows is improved as accruals quality gets better. These results are qualitatively not changed 1) when accruals quality is measured in a few different methods, 2) when the magnitude of accruals is controlled for, and 3) when the uncertainty of firms' operation environment is controlled for. All the results of this paper implies that the effects of accruals quality should be controlled for when earnings' ability to predict future cash flows is a variable of interest in the future research.