Investigation of profit management in the companies accepted in Isfahan stock market

The present research tries to investigate the relationship between profit chain breakage as an important managerial issue and management behavior analysis and generally managers involvement in profit management in order to avoid profit chain breakage. Research statistical sample includes 132 companies whose financial data from 2006 up to 2013 have been analyzed. Results showed that the companies having profit chain get involved in profit management in order to stabilize an increasing pattern in the reported profit. In fact, such companies behave in a way that they try to avoid profit chain breakage. In other words, they do not seek for creation and production and innovation but they manipulate the real profit (by means of accounting procedures flexibility and so on) in order to announce their intended profit and not the real profit! In the present research, managers behavior in the years they exercise profit management was investigated. Profit chain is referred to years in which the company reports its profit. It seems that managers use increasing profit management for reporting profit as a model with positive growth rate throughout the lifetime of their company. a manger reports net profit in the form of an increasing earning chain and failure of this chain may lead to costs like losing fame and popularity and reduction in the company s popularity in capital market. Profit chain breakage means that when accruals are accumulated in financial statements and accounts, manager is no longer able to overstate profit using optional accruals. The present research uses regression equations and the results showed that there was positive and significant relationship between profit management