Empirical Studies in Financial Accounting

Abstract In this study, the effect of audit quality on the forecasting accuracy of future
operating cash flows of firms listed in the Tehran Stock Exchange has been
investigated. Audit quality has been measured with auditor size, auditor
industry specialization and auditor tenure. Similar to some previous
researches done in this outline, forecasting accuracy of future operating cash
flows have been estimated with using model Barth et al (2001). The results
of review firms 97 in the years 2007 to 2014 show that size of audit firm and
auditor industry specialization have significant positive relationship at the
forecasting accuracy of future operating cash flows, and increase forecasting
accuracy. while there is a significant negative relationship between
forecasting accuracy of future operating cash flows and auditor tenure. These
findings suggest that audit quality can influence the quality of accounting
information and therefore effected over forecasting accuracy of future
operating cash flows.