Comparing the Information Content of Iranian Vs. IAS Based Operating Cash Flows

This study investigates and compares the value relevance of operating cash flows provided based on Iranian accounting standard #2 and international accounting standard, in Tehran Stock Exchange from 2002 to 2007. To compare the incremental and relative value relevance, the Wald test and Vuong (1989) test are used, respectively. We analyzed the results using panel data (six years) approach. The results of this research indicate that operating cash flows based on international accounting standard have significant incremental value relevance to operating cash flows based on Iranian accounting standard #2. However, the results of Vuong test show that there are no significant differences between the value relevance of operating cash flows based on international accounting standard and the value relevance of operating cash flows based on Iranian accounting standard.