Earnings management is a deliberate management action which is performed in order to accomplish particular goals following the framework of accounting principles. Managers’ access to information is much more than that of the other beneficiary groups. If managers perform earnings management aiming to transfer information which is representative of the realities and the real value of a commercial unit, no objection is taken; but, when managers’ goal in earnings management is to deceive the users through presenting some incorrect information regarding the firm performance, authorities might become concerned. The aim of the present research is to study the effect of earnings management on variables such as the accounts payable and debt and gross profit ratio to sales revenue. The required data has been collected from Tehran Stock Exchange over the period of 2006- 2012 and panel data regression method has been used to analyze the data. The results show that the discretionary accrual based earnings management has the most effect on the accounts payable.
