Examining the Smoothing Profit Role in Forecasting Future Profitability in the Companies Accepted in Tehran Stock Exchange (TSE)

Business unit profit is one of the financial statements items، which is important for all investors so that investors'' in investments decisions prefer smooth earn and reduced volatility. Hence، managers are trying to smooth earnings and growth rate. So the managers tend to Income Smoothing in order to convey and report the secret information about future profits. The fundamental question of this research is if there is significant relationship between Income Smoothing and future profitability? Several statistical tools have been used in this research. Firstly، descriptive analysis has been used in order to describe the data of the research. Next، simple and multi regression were used for testing the study hypotheses. Lastly، (Adjusted-R2) was used to indicate the incremental information content for the study variables. First، the descriptive statistical tools for the main variables are shown; then the main statistical problems in these regression models are discussed; and lastly the regression models statistical results are provided. The statistical technique used for examining the assumption is Pearson coefficient of correlation and variable Regression model. In the research there are 4 assumptions. Percent results show that there is a positive significant relationship between Income Smoothing and future profitability in 95% confidence level. Current profitability predicts future profitability. Income Smoothing has incremental information relative to current profitability when predicting future profitability. Past profitability provides incremental information relative to current profitability when predicting the future profitability. Income Smoothing has incremental information content with respect to current and past profitability when predicting future profitability.