However, the use of accruals allows for management discretion to signal their private information or to opportunistically manipulate their earnings. The signaling of information will improve the ability of earnings to reflect firm performance (Holthausen 1990; Healy and Palepu 1993). In contrast, the management discretion to opportunistically manage earnings will make earnings to become a less reliable measure of firm performance. Therefore, many users of financial statements turn to cash flows as an alternative measure of firm performance. Net cash flows have no accrual adjustment so they are not subject to management discretion from using different accounting practices. Information of cash flows is useful, in conjunction with other information, in forecasting future operating cash flows and valuing firms. Cash flows from operations reflect net cash flows generated by the firm’s operating activities. IAS No. 7, Statement of Cash Flows, states that the amount of cash flows from operating activities is a key indicator of the extent to which the operations of the firm have generated sufficient cash flows to repay loans, maintain the operating capability of the entity, pay dividends and make new investments (IASB 2009a). Therefore, more cash flows indicate higher value and analysts recommend buying stocks of firms that have positive cash flows.