Evaluating the Role of Company Life Cycle for an Appropriate Model in Predicting the Quality of Discretionary Accruals (Abnormal) Based on Dickinson Cash Flow Model Approach

The main purpose of this research is to evaluate the role of the company life cycle in providing an appropriate model in predicting the quality of discretionary accruals (Abnormal) using the Dickinson Cash Flow Model approach. The statistical population of the research consisted of 180 company observations that were divided into three stages of life cycle using Dickinson's model variables (2011). Multivariate regression technique was used to test the hypotheses based on the cross-sectional data. Then, using initial models for measuring the quality of discretionary accruals (Abnormal), the error values of each model were compared with the error values obtained from the life cycle adjusted models. The results show that the coefficients of determination in the Kasznik adjusted model are not significantly increased compared to the initial model, but in the other models, the coefficient of determination increases significantly compared to the initial model, indicating that the values estimated by the adjusted models are an appropriate approximation of the real values. They predict and identify more exactly up to a few percent of accruals quality or the operational cash flow difference and net profit compared to the initial models; so, except for the Kasznik model, in the other models an increase in the life cycle increases the predictive power of the Models.