Impact of Earnings Management on Discretionary and Non-Discretionary accruals

Article history: Aim of this study was investigating impact of earnings management on quality of financial report in companies listed in Tehran Stock Exchange. Furthermore, we tested role ofdebt ratio and size of firm in the relationship. Therefore, we used modified Jones model(10), discretionary accruals as measure for earnings management also we used model of Francis and et al (2005) in order to test quality of financial reports. Sample study included 80 companies listed in Tehran Stock Exchange during 2008 and 2012. We used multiple regressions in order to test variables. Results indicated that reverse relationship exists between earnings management and both discretionary and non- discretionary accruals. Finally, results indicated that there was not significant relationship between debt ratio with both of discretionary and non-discretionary accruals.