Analisar os Fatores Determinantes da Eficiência do Gestor na Geração de
Fluxo de Caixa Operacional

Analyze the Determining Factors of
Manager Efficiency in the Generation of Operating Cash Flow

Mohaddese
Abedini

https://orcid.org/0000-0002-0481-3039

Department of Accounting, Karaj
Branch, Islamic Azad University, Karaj,Iran. [email-masked].

Bahman
Banimahd

https://orcid.org/0000-0001-9554-4091

Department of Management and
Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran. [email-masked].

Mehdi Moradzadehfard

https://orcid.org/0000-0002-1118-6598

Department
of Accounting, Karaj Branch, Islamic Azad University, Karaj,Iran.
[email-masked].

Azam Shokri Cheshmehsabzi

https://orcid.org/0000-0001-5332-8905

Department
[email-masked].

RESUMO

De
acordo com os objetivos do relatório financeiro, em particular o objetivo de
administração, o objetivo deste estudo é avaliar a eficiência do gestor das
empresas listadas na Bolsa de Valores de Teerã na geração de fluxo de caixa
operacional com base na análise envoltória de dados (DEA) durante o período de
2013 a 2019. Nesta pesquisa, para teste de hipóteses de pesquisa, foi empregada
a regressão multivariada. Os resultados da pesquisa indicaram que o nível de
eficiência dos gestores na geração de caixa operacional é muito baixo e com
tendência decrescente. Além disso, as evidências demonstraram que fatores como
lucratividade, conhecimento financeiro do CEO e percentual de ações detidas por
acionistas institucionais não têm correlação significativa com a eficiência dos
gestores. No entanto, o tamanho da empresa, a alavancagem financeira, a
independência do conselho e a competitividade têm correlação significativa com
a eficiência dos gestores na geração de caixa operacional. Já o tamanho da
empresa apresenta correlação negativa com a eficiência dos gestores e
correlação positiva com os demais itens.

Palavras-chave: Eficiência dos gerentes;
Fluxo de Caixa Operacional (OCF); Supervisão; Análise de Envoltória de Dados
(DEA).

ABSTRACT

According to the objectives of financial reporting, particularly stewardship
objective, the aim of this study is to assess the manager's efficiency of
listed firms in the Tehran Stock Exchange in the generation of operating cash
flow on the basis of data envelopment analysis (DEA)
during the period 2013 to 2019. In this survey, for research hypotheses
testing, multivariate regression was employed. The research results indicated
that the level of manager efficiency in the generation of operating cash flow
is very low and has a decreasing trend. Also, the evidence demonstrated that
factors including profitability, CEO's financial knowledge, and percentage of
shares owned by institutional shareholders have no significant correlation with
the managers' efficiency. Nevertheless, company size, financial leverage, board
independence, and competitiveness have a significant correlation with the
managers' efficiency in the generation of operating cash flow. Meanwhile,
company size has a negative correlation with managers' efficiency and a
positive correlation with the remaining items.

Keywords: Managers Efficiency; Operating Cash Flow (OCF);
Stewardship; Data Envelopment Analysis (DEA).

Recebido
em 09/09/2021.  Aprovado em 26/11/2021.
Avaliado pelo sistema double blind
peer review. Publicado conforme normas da APA.

https://doi.org/10.22279/navus.2021.v11.p01-11.1680

1 INTRODUCTION

Management capability is regarded as one of the
company's intangible assets. Accounting and finance literatures consider the
manager's capability as his/her efficiency in the optimal conversion of company
resources into revenue. Investigations conducted in management science confirm
that the manager's performance is dependent on a variety of factors such as
demographic characteristics, inter-organizational and extra-organizational
factors (Demerjian et al., 2013).

One of the most conventional techniques to evaluate
the manager's efficiency is data envelopment analysis (DEA). DEA is an
efficient technique for the measurement and assessment of the efficiency of
decision-making units (DMUs), which is used to evaluate and specify the relative
efficiency of management performance. The studies carried out in this domain
have explored the managers' efficiency in employing company resources to
generate profits and sales, and stock market value (Grmanová & Strunz,
2017; Gu & Yue, 2011). Assessing the efficiency of managers in the
generation of operating cash flow has not yet been examined in prior research.
Cash flows resulting from operating activities are among the constituents of
the company's profit and a critical indicator for evaluating the continuity of
the company's activities. Moreover, taking into account that operating cash
flow is less exposed to manipulation in comparison with profits, thus financial
analysts regard OCF as an essential element in the assessment of the company's profitability
(Habib, 2010).

Compared to accruals, operating cash flow has more
potential to anticipate future cash flows. Operating cash flows enjoy the more
remarkable ability for the prediction of financial health relative to other
cash flows. (Nouri et al., 2020). We select data envelopment analysis to assess
managers’ efficiency, because this technique is a robust and flexible approach
for measuring financial performance, for it takes into account numerous
variables as input and output variables for evaluating efficiency at the same
time. Also, DEA could offer more information compared to conventional analysis
techniques (e.g., financial ratios). In this approach, the performance of each
company is compared with other companies in the same industry in terms of
efficiency. As the efficiency of any company is compared with the mean or
median of total sample research companies in conventional analyses, we believe
this is a suitable comparison. Thus, DEA could overcome the complications due
to lacking a common measurement scale (Shabani and Farzipour, 2015).

With respect to
the significance of operating cash flow in accounting and financial management,
as well as because of the lack of enough studies to assess the managers'
efficiency in the generation of operating cash flow, and with regard to the
usefulness of DEA in the analysis of financial performance, this motivation
arose in the authors to write the current paper. The authors of this article
believe that the assessment of the manager efficiency of companies listed on
the stock exchange and determination of the factors influencing it could
provide helpful information to investors and financial analysts. Hence, the
question of this study is what factors are affecting the manager efficiency of
companies listed on the stock exchange in the generation of operating cash
flow? This investigation also aimed to introduce the data envelopment analysis
(DEA) technique to measure and evaluate the efficiency of managers in the
generation of operating cash flow.

The contribution
of this study could be enumerated as follows: First, the outcome of this study
can result in the extension of the theoretical bases of research on operating
cash flow in accounting and financial management. Second, accounting and
financial management researchers become acquainted with data envelopment
analysis techniques, which could lead to novel viewpoints concerning the
application of DEA in the analysis of manager performance. Third, the current
study results could offer a new approach to evaluate the performance of
managers for financial analysts and investors in line with the concept of the
stewardship function. Subsequently, theoretical foundations, methodology,
results, and conclusions will be provided.

2 THEORETICAL
FOUNDATIONS AND RESEARCH LITERATURE

2.1.
Operating Cash Flow and Manager's Stewardship Function

Steward Managers in a business unit are the owners of
that business unit. They are responsible for establishing a balance between
their interests and owners. In other words, business unit managers must not
earn interests higher than the interests of owners on the basis of this theory.
Stewardship theory attempts to encourage managers to work in line with the
business unit's objectives and establish the task of accountability in the
association between manager and owner (Davis et al., 1997). In the financial
reporting objectives of the International Financial Reporting Standards (IFRS)
Board, the presentation of useful information on the assessment of the
manager's stewardship function has been insisted on (Pleger, 2020).

The Board emphasizes
that information on cash flow to evaluate the business unit's capability in
generating future net cash flows to be provided to users. In this respect, the
amount of cash flow resulting from operations is the central metric in the
evaluation of the fact that to what extent has the entity's operations
generated sufficient cash flows for the repayment of loans, maintenance of the
entity's operating capability, payment of dividends, and conduction of new
investments (Minton et al., 2002). Indeed, the emphasis of the Financial
Accounting Standards Board (FASB) from the generation and adequacy of operating
cash flow after deducting dividends and other expenses is the free cash flow
(FCF). Free cash flow is the amount of cash from operations that remained in
the company after deducting dividends and capital expenditures. As the amount
of free cash flow is more, it suggests that the entity's management in
achieving the value creation has been successful. In accordance with the
concept of free cash flow, the business unit management should always seek
opportunities to enhance the company's value. This notion emphasizes that no
new products can be manufactured and sold without creating sufficient cash;
thus, the company's value will not ameliorate without enough operating cash
flow. Hence, one can conclude that the concept of free cash flow has beneficial
applications in evaluating the manager's stewardship function (Cheng et al.,
2005).

By employing data
envelopment analysis, Ton et al. (2021) realized that market conditions in the
hotel industry have a substantial role in the generation of operating cash
flows. In their opinion, market conditions and opportunities in establishing
competitive power can significantly influence the manager's efficiency of this
industry in the generation of operating cash flows. Sawarni et al. (2021), in a
study entitled the efficiency of working capital management, came to the
conclusion that the nature of the business activity and profitability of the
company has a significant impact on the efficiency of working capital
management. The evidence gained from this study suggests that the working
capital (WC) management efficiency will decline with increasing the company's
profitability.

As well as, they demonstrated that the capital market
positively reacts to the high efficiency of companies in working capital
management. Chen & Wang (2020), in evaluating the manager efficiency in
financing firms in emerging and developing industries, found that the
efficiency of these companies is at a low level. Besides, the results of this
survey reveal that companies operating in domains such as biopharmaceutical,
energy conservation, and environmental protection enjoy high efficiency in
their financing. It was illustrated in this investigation that the variables of
debt to asset ratio (D/A) or leverage ratio, financial costs, and cash flow
ratio have a significant impact on the companies' financing efficiency.
Moreover, sales growth and the net profit to asset ratio have a significant and
positive correlation with the mentioned efficiency. Seth et al. (2020)
evaluated the working capital management efficiency in Indian companies from
2008 to 2019. Their study's results exhibited that the efficiency of the
examined companies was nearly fixed. Furthermore, they discovered that the
capacity to generate internal resources, company size, gross domestic product
(GDP), and interest rates have a considerable impact on the working capital
management efficiency. Zeng & Jang (2019), in investigating the managers'
efficiency in financing companies, represented that solely 2.4% of the
companies under study have high efficiency in the financing, and the others do
not have favorable efficiency. They proposed that managers should promote the
structure of investments and lower their redundancy and waste redundancies to
enhance efficiency in financing.

2.2.
Management Capability

Management capability is one of the aspects of human
capital and an integral part of intangible assets. Texts and topics associated
with accounting and finance consider the manager's ability as his/her
efficiency in the optimal conversion of company resources into revenue. In
other words, if a manager can acquire higher output at a certain level of
resources, then one can argue that the manager has the effective capability of
utilizing the resources of the company. Efficient and capable managers have a
better understanding of the internal and external conditions of the business
unit. They specify profitable projects through this strength and knowledge and
upgrade cash flow and business unit performance by the investments in them.

Thus, managers'
capability directly influences the company's profitability, cash flow, and
company value (Demerjian et al., 2013). In the opinions of the authors of this
paper, measuring the relative efficiency of managers in the generation of
operating cash flow via data envelopment analysis (DEA) can be regarded as a
criterion to assess the managers' capability in line with financial reporting
objectives, particularly stewardship theory. Sima Mora (2021) examined the
managers' efficiency in family companies. The results of her study indicated
that the efficiency of managers in these companies would be low if the
companies are managed by a family member.

In this
research, she expresses that the issue which is critical for the managers of
these companies is family interests, including the maintenance of family
reputation, and management topics and requirement have no importance for them.
Chalaki et al. (2018) regard management capability as one of the variables
influencing the financial performance and continuity of business units. They
realized that there was a positive and significant correlation between
management capability and financial flexibility. Also, they represented that
corporate financial distress declines by enhancing the managers' flexibility
and capability. Jabbarzadeh Kangarlouyi et al. (2019) assessed the managers'
capability of listed companies on the stock exchange by employing DEA. They found
that information asymmetry and information uncertainty decreased by increasing
management capability. Furthermore, the evidence of their research revealed
that the capability of the manager causes the improvement of the company's
ranking in timely disclosure of information. In this study, they came to the
conclusion that management capability leads to information transparency.
However, a deficiency in the internal controls of companies could lower the
impact of management capability on the transparency of information.

3
METHODOLOGY

The population of this study included companies listed
on the Tehran Stock Exchange. The time-domain of the research is from 2013 to
2019. Theoretical foundations and research data are collected on the basis of
library (desk) studies. The data needed for statistical analysis are extracted
from the financial statements of companies listed on the Tehran Stock Exchange
from the electronic database of the Stock Exchange Organization. The testing of
the hypotheses is performed based on the multivariate regression method.
Besides, the statistical sample of the current study has been selected with
regard to the following conditions:

1) The company has been listed on the stock exchange
from 2013 onwards.

2) The company is not among specialized investment and
banking companies since these companies enjoy the nature and classification of
items in different financial statements.

3) The financial period of the company should be the
end of March.

4) The data of the company is available.

Regarding the above circumstance, merely 121 companies
had the above conditions; hence, they were selected as a statistical sample.
The research model is also written as equation number 1:

CEO_ERit = β0 + β1ROAit + β2Sizeit+
β3LEVit+ β4 PMCit + β5CEO_Fk it + β6BIndepit+ β7Ins_Sh
it+ λ

Equation No. 1

CEO_ERit = The CEO
efficiency score of each company per year.

In this survey, efficiency was calculated on the basis
of data envelopment analysis to the separation of each industry. To this end,
the input variables of total financial facilities, total operating costs,
number of employees, total fixed assets and output variables are also regarded
as operating cash flow. The goal of this study is to measure the capability and
efficiency of the manager in the generation of operating cash flow concerning
input variables.

ROAit = Company
profitability that represents the ratio of net profit to total assets of each
company per year.

Sizeit = Company
size that is equal to the natural logarithm of each company per year.

LEVit = Financial
leverage that is the ratio of total debt to total assets of each company per
year.

PMCit =
Competitive ability of each company, which is measured by the ratio of sales of
any company in each year to the total sales of the industry in the same year.

CEO_Fk it = CEO
financial knowledge is a dummy variable with one and zero values. Whenever the
CEO has an education in the domains of finance, accounting, and management, the
value of it is one and otherwise it is intended zero.

BIndepit = Board
independence that is obtained through the ratio of the number of non-executive
board members to the total number of board members.

Ins_Sh it =
Percentage of shares owned by institutional shareholders in each company per
year.

λ = Remaining
values of the model

3.1.
Hypotheses of the Research

With respect to
the objectives and theoretical bases, hypotheses of the research are formulated
and written as follows:

H1: There is a
significant correlation between the company's profitability and the manager's
efficiency.

H2: There is a
significant correlation between the company size and the manager's efficiency.

H3: There is a
significant correlation between corporate financial leverage and the manager's
efficiency.

H4: There is a
significant correlation between the company's competitive ability and the
manager's efficiency.

H5: There is a
significant correlation between the CEO's financial knowledge and the manager's
efficiency.

H6: There is a
significant correlation between the company's board independence and the
manager's efficiency.

H7: There is a significant correlation between the
percentage of shares owned by institutional shareholders and the manager's
efficiency.

3.2. Data
Envelopment Analysis (DEA) - Common Weighting Method

Data envelopment analysis (DEA) obtains the efficiency
of decision-making units (DMU) with several inputs and outputs by the
assignment of weights to them as the ratio of the sum of weighted outputs to
weighted inputs. Thus, each DMU can get the most ideal weights for achieving the
maximum efficiency index. Thus, the efficiency index achieved is the best level
of efficiency for each DMU (Wu et al., 2016; Li et al., 2013).

Suppose that there is a set of DMUs. Each DMUj has m
distinct input (i=1...m)

and s distinct output(r=1,…,s)

Self-evaluation
efficiency of

using the CCR
model in DEA will be represented as follows:

(1)

In which

and

are the
representations of the weights of r -th output and i -th input from

, respectively. The result of this model is the maximum
efficiency

. A set of optimal weights

,

,…,

,

,

,…,

is achieved for each

, by solving model (1). Therefore, we have a set of weights to
assess the efficiency of each DMU that measures the efficiency of the DMU in
the best conditions. However, this results in dissatisfaction among DMUs. It is
possible that the best weight selected for a DMU is not acceptable for the
other DMU. To address this problem, common weighting techniques in DEA are
exploited (Hatami-Marbini & Saati,
2018). The DEA common weighting method that is employed in this study is as
follows:

(2)

Where

is the efficiency
gained using model (1) for

. Actually, this model seek a common
weighting for DMUs, which has the lowest distance from their ideal efficiency.
The above model can be written as follows:

(3)

Considering that

is a certain value and
does not affect the optimization, the objective function has been deleted.
After solving this model, which is a common weighting technique, the optimum
solutions

,

,…,

,

,

,…,

can be achieved, which
is called the common weight, and the efficiencies of the common weight include:

Hence,

as the
efficiency score of common weighting method in this study is employed to
calculate the efficiency score of companies.

3.2.1 Common Weighting
Method (BCC or Banker Charnes Cooper Model)

The common weighting model presented above was CCR (Chames, Cooper and Rhodes Model).
However, one can develop its BCC model. Indeed, the common weighting technique
to evaluate the efficiency with the BCC assumption is as follows:

(5)

(6)

After solving the common weighting model, the optimum
solutions

,

,…,

,

,

,…,

,

are obtained, which are
called the common weight, and the efficiencies of the common weight are:

Among the characteristics of BCC common weight models
is the data transfer stability. This is so that if inputs and outputs are added
with a fixed number, no change can be achieved in the efficiency score. This
case is favorable for financial data that contains negative data. In this way,
we add the inputs and outputs that contain negative data with a fixed number so
that they all become non-negative, and the initial assumption of DEA that all
inputs and outputs are non-negative is established (Benicio
& Soares, 2015).

4 RESULTS

4.1. Results of Descriptive Statistics

In this part, descriptive statistics of research
variables are provided in Tables 1 and 2 prior to research hypotheses testing.
Table 1 illustrates the descriptive statistics of input and output variables of
efficiency calculations on the basis of data envelopment analysis (DEA).
Besides, the descriptive statistics of the variables associated with testing
the hypotheses are represented in Table 2. The evidence presented in Table 2
indicates that the mean efficiency of managers in the generation of operating
cash flow during the investigation period is very low and equal to 12 percent.
Moreover, chart 1 evidently specifies that the level of manager's efficiency in
the generation of operating cash flow has a decreasing trend during the period
of study.

Table 1. Descriptive
statistics of variables associated with DEA - Figures in millions of Rials

Variables

Mean

Median

Standard Deviation

Minimum

Maximum

Operating cash flow

312253.46

64222

1266848.53

-7600882

15426531

Total assets

4645460.89

1442777

25366518.35

14911

272945479

Operating costs

2800424.85

849183.5

9725528.26

15333

145281641

Total financial facilities

1526348.17

277784.5

5538189.84

143

81266701

Number of employees

777

367

4145.28

17

10773

Table 2. Descriptive
statistics of variables associated with testing the hypotheses

Variables

Mean

Median

Standard Deviation

Minimum

Maximum

Manager's efficiency

0.121424

0.04799

0.174264

0

1.00087

Profitability

0.121357

0.09964

0.189902

-0.78097

1.97965

Percentage of institutional shareholders

0.661512

0.708

0.218997

0

0.9945

CEO financial knowledge

0.592637

1

0.491636

0

1

Financial leverage

0.658884

0.600645

0.475986

0.03696

0.90987

Company size

14.26327

14.15567

1.363912

9.60985

19.49298

Board independence

0.740158

0.8

0.164823

0

1

Competitive ability

0.023777

0.007695

0.041485

0.00026

0.33114

Figur 1. The mean
efficiency in the generation of operating cash flow in the period under study

4.2.
Results of Hypotheses Testing

The results of the testing hypotheses are displayed in
Table 3. The evidence of this table implies that profitability, percentage of
shares owned by institutional shareholders, and CEO financial knowledge do not
have a significant correlation with manager's efficiency at 95% confidence
level since the significance level of these variables is more than 5%; thus,
the first, fifth, and seventh hypotheses are rejected. However, because the
significance level of the variables of company size, financial leverage, board
independence, and company's competitive ability is less than 5%, so one can
argue that there is a significant correlation between the variables of company
size, financial leverage, board independence, and company's competitive ability
with manager's efficiency at the 95% confidence level. Hence, the second,
third, fourth, and sixth hypotheses are confirmed. Moreover, the results of
Table 3 represent that there is no critical collinearity between the
independent variables of the research model since the collinearity statistic of
all independent variables is close to one.

This indicates
that the autocorrelation between the independent variables is so minimal.
Durbin Watson statistic is equal to 1.8, which is close to 2, representing that
there is no autocorrelation between the residual values of the research model.
The significance level of variance heterogeneity statistic is greater than 5%.
This significance level represents that there is no heterogeneity of variance
between residual values of the research regression model. The F-Limer test is
employed for the choice between pooled regression methods and fixed effects
(FE) regression.

In this test, the acceptance of the H0 hypothesis
means the model estimation by pooled regression technique. Otherwise, if H0 is
rejected, the fixed effects model has superiority compared to the pooled
regression model; in this case, the regression model based on the fixed effects
model will be estimated. Because the significance level of the F-Limer
statistic is equal to zero and less than five percent, one can argue that the
research model is estimated with fixed effects. If a fixed-effects model is
accepted on the basis of the F-Limer test, then it is required to employ
another test called the Hausman test.

This test specifies which of the fixed effects and
random effects models is more suitable. If the level of gained probability
level is less than five percent in the Hausman test, it is concluded that H0 is
rejected, and the model is estimated using the fixed-effects method.
Nevertheless, if the probability level is more than five percent, the model is
selected by the random-effects method. As the significance level of Hausman
statistic is more than five percent in accordance with Table 3, so the model is
estimated based on the random effects (RE) model.

Table 3. Results of
hypotheses testing

Variable Name

Coefficient

Standard Deviation

t statistic

Significance level

Collinearity statistic

Fixed value

0.632851

0.075478

8.384538

0.0000

-

Profitability

-0.037071

0.027037

-1.371104

0.1708

1.096598

Percentage of shares of institutional owners

0..28509

0.025726

-1.108210

0.2681

1.043587

CEO financial knowledge

0.017749

0.11890

1.492705

0.1360

1.050016

Financial leverage

-0.028559

0.011108

-2.571117

0.0103

1.069728

Company size

-0.041031

0.004814

-8.522686

0.0000

1.151196

Board independence

0.129169

0.032138

4.019219

0.0001

1.081535

Competitive ability

0.414485

0.154307

2.683103

0.0074

1.064663

Determination coefficient:

F statistic:

5.357955

(0.0000)

Durbin-Watson statistic:

1.835273

F-Limer statistic:

7.400477

(0.0000)

Hausman statistic:

9.740035

(0.2038)

Variance heterogeneity statistic:

1.542727

(0.1493)

5
DISCUSSION & CONCLUSION

This investigation measured the manager's efficiency
of companies listed on the Tehran Stock Exchange in the generation of operating
cash flow on the basis of data envelopment analysis (DEA) and then evaluated
the factors influencing it using multivariate regression.

The descriptive
statistics' results indicated that the mean efficiency of managers in the
generation of operating cash flow during the research period is very low and
equal to 12%, which has a downward trend at this time. Besides, the results of
testing hypotheses suggest that profitability, percentage of shares owned by
the institutional shareholders, and CEO financial knowledge have no significant
effect on the managers' efficiency. This is in contradiction with the results
of the study conducted by Sawarni et al. (2021).

This survey approves that variables, including the
company's competitive ability, board independence, company size, and financial
leverage, significantly affect the managers' efficiency in the generation of
operating cash flow. The findings reveal that company size has a substantial
and negative correlation with managers' efficiency. That is, as the company
size becomes larger, the managers' efficiency in the generation of operating
cash flow will decline. In other words, managers in large companies have no the
necessary ability and capability to employ financial resources (financial
facilities received), human resources (number of employees), physical resources
(fixed assets), and the costs paid for utilizing these resources to generate
operating cash flow relative to small companies. Moreover, the evidence of this
research represents that variables such as financial leverage, board
independence, and competitive ability are three variables, which have a
positive influence and correlation with managers' efficiency; i.e., the
efficiency will enhance by an increase in them. If the competitive ability and
board independence are regarded as variables of the corporate governance
system, then one can argue that the managers' efficiency in the generation of
operating cash flow upgrades by increasing these two variables.

The existence of a positive association between
leverage ratio and managers' efficiency can be interpreted in such a way that
the managers' capability to generate operating cash flow is dependent on fiscal
policies, including financial borrowing of companies. Additionally, one can
realize that company managers do not have the necessary ability to generate
operating cash flow without this variable. The recent results achieved from
this study are consistent with the results of the research conducted by Siav et
al. (2021) and Ton et al. (2021). They take into account access to borrowing
and financial credit, market conditions and opportunities in the creation of
competitive ability and components of the governance system as proper
indicators to upgrade the managers' efficiency in financial performance. The
scientific achievements of this article can be interpreted parallel to the
significance of operating cash flow with respect to the financial reporting
objectives. This paper demonstrated that the operating cash flow and the
capability of its generation could be a proper indicator to evaluate the
manager's stewardship function for achieving the objectives of financial reporting.
The evidence of the current study reveals that the level of manager's
efficiency in the generation of operating cash flow is very low with a
declining trend.

In other words,
the managers of the surveyed companies have not performed their stewardship
function properly in order to maintain the interests of shareholders,
creditors, and other stakeholders. Corresponding to the financial reporting
objectives, this issue could offer beneficial information to economic
policymakers, investors, and financial analysts. Among the other scientific
achievements of this paper is that it demonstrates that the data envelopment
analysis (DEA) technique to evaluate the stewardship function of managers is a
helpful means to analyze the managers' efficiency for financial analysts,
students, and financial and accounting researchers.

As expressed, the data envelopment analysis is a
robust and flexible technique to measure financial performance, which could
provide more information relative to conventional analysis approaches. The
results of this study concerning the importance of DEA in the assessment of the
managers' efficiency can be matched with the investigation carried out by Shabani
& Farzipour (2015). They confirm that the DEA is a suitable and beneficial
technique to analyze the managers' efficiency compared to traditional analyses.

5.1.
Suggestions and Limitations of the Research

With regard to the research findings and evidence,
policymakers and legislators in the domains of economics and capital markets
are emphasized to take into consideration plans for ongoing evaluation and supervision
on the managers' efficiency, particularly in large companies.

They can periodically perform the assessment of the
managers' efficiency and the choice of efficient managers by employing the DEA
techniques. Furthermore, because the results of this survey represent the very
low efficiency of managers, so legislators and policymakers of accounting
standards are suggested to take into account the issue of evaluating the
managers' stewardship function in line with the financial reporting objectives
transparently and separately in the conceptual framework of financial reporting
and do not combine it in the goal of the usefulness of information for decision
making.

It is proposed for further studies that the technical
reasons for the inefficiency of managers in companies listed on the stock
exchange be explored as qualitative research. The population in this study
included companies operating in the Tehran Stock Exchange, Accordingly the
achieved results are assigned to these Companies and cannot actually be
generalizable to all organizations and companies. It is recommended that
researchers in future investigations implement the subject of this study in
other organizations and manufacturing and service companies.

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