This paper surveys the relationship between the cash flow and stronger outside monitoring of Listed Companies in Tehran Stock Exchange (TSE). Institutional ownership has considerable influence and significant proportion of shares. They have motivated and also have the expertise and resources necessary to control the company. The main purpose of this study is to investigate the relationship between corporate sensitivity of cash flow and stronger outside monitoring. For this reason, it was collected seven-year data during period from 2005 to 2011 for 94 listed companies in Tehran Stock Exchange. To test the hypothesis multiple regressions were used along with combined data. Finally, it was found that firms with better outside monitoring do not save to capture good investment opportunities.
