The relationship between the cash balance and smoothing

Subject Areas :

GH Taleb neya ^{1 *} , حدیثه Darvish ²

1 - دانشیار، گروه آموزشی حسابداری، واحد علوم و تحقیقات، دانشگاه آزاد اسلامی، تهران، ایران،
2 - کارشناس ارشد حساب داری

Received: 2015-05-06 Accepted : 2015-05-06 Published : 2014-12-22

Keywords:

Abstract :

The agency relationship problems, increases the management's desire to hold cash. On the other hand, since the performance of managers is focused by shareholders, so managers must be responsive to the stagnating cash in the company. This responsibility can be achieved by one of the management tools that is, income smoothing. The aim of this study is to consider the relationship between cash balance and income smoothing in companies listed in Tehran Stock Exchange. In order to fulfill the research objectives, two hypotheses have been formulated. The statistical sample of the study included 73 companies. To test hypotheses, multiple regression using combined data have been used. Research results indicate that there is a significant and positive relationship between cash balance and income smoothing. But there was no significant relationship between positive changes in cash balance of this year than last year and income smoothing.