Managerial Entrenchment and Earnings Management Listed Firms on Tehran Stock Exchange

Earning management is defined as the process of taking conscious steps within the scope of accepted accounting principles to bring the reported profit to the desired profit level. The act of bringing the reported profit closer to the profit level is done through accounting manipulation. It seems that managers with financial knowledge have more ability to manipulate and manage, but they may not have the necessary motivation to do this, and also the CEO may manage profits during his tenure for various reasons, including market uncertainty. hit The present research has investigated the management retention and earning management of companies listed on the Tehran Stock Exchange, and for the purpose of this study, a sample of 158 companies was selected from among the companies listed on the Tehran Stock Exchange during the years 2011 to 2016. To measure accrual earning management, the modified Jones model was used, and for real earning management, 3 indicators including three indicators of abnormal operating cash flows, abnormal production costs and abnormal discretionary costs were used. In this research, the combined multivariate regression method was used (company) with the help of Stata software and also to test the hypotheses of this research, the generalized least squares model has been used. The results of the estimation of research models indicate that managerial retention has a negative and significant effect on accrual earning management, but managerial retention does not have a positive and significant effect on actual earning management.