Investigating the effect of comparability of accounting information on actual earnings management and accrued earnings management

As the comparability of accounting information increases, the probability of discovering accrual-based earnings management increases, and as a result, managers will face a lot of risk in using this earnings management method. Therefore, it is expected that the use of accrualsbased earnings management will be reduced and, conversely, the use of actual earnings management methods will be an alternative to the manipulation of accruals. In the present study, the effect of comparability of accounting information on actual earnings management and accrued earnings management using a sample of 120 companies listed on the Tehran Stock Exchange during the years 2010 to 2016 and using a multivariate regression model based on Panel data were analysed with the SPSS software. Findings indicate that comparability of accounting information is negatively related to earnings management based on accruals. In other words, by increasing the comparability of accounting information, managers’ use of accruals to manage earnings decreases. Comparability of accounting information also has a positive relationship with actual earnings management. In other words, by increasing the comparability of accounting information, managers replace the management of earnings based on accruals with the use of actual earnings management methods.