The impact of surplus free cash flow on earnings management in food industry companies listed at the Tehran Stock Exchange

The purpose of this study is to investigate the impact of surplus free cash flow on earnings management of food industry companies listed on the Tehran Stock Exchange. The study community consisted of all food industry companies listed in Iranian stock exchange during 2009-2014 which were studied using the panel data. Empirical results showed there is a positive and statistically significant relationship between surplus free cash flow to earnings management. Also, the results of leverage, relative cash flow and absolute total-accruals variables showed that these variables had a positive and significant relationship with earnings management variable, while there is a negative and significant statistical relation between firm size variable and earnings Management. Among the variables studied, the relative cash flow was the highest and the absolute total-accruals had the least positive effect on earnings management.