The present study evaluates the correlation between some features of earning quality to financial crisis. So some prevalence model in subject literature is used for calculating the earning quality indexes, as well as three general criteria and two native criteria is applied for evaluating the possible incidence of financial distress and bankruptcy. So the information of 3371 years was gathered and the statistical tests of research hypothesis were studied. The results of study demonstrated that in the majority of cases, there is meaningful correlation between financial distresses to earning quality. Also this correlation was meaningful for special definition of bankruptcy in the business legislation of Islamic Republic of Iran. The present study by classification of different companies in four portfolios based on the degree of financial health (impossible for bankruptcy) concluded that the correlation in the last portfolio (unhealthy companies in the terms of financial distress) is more meaningful than companies in the other portfolios. Meanwhile, the results of the study showed that the degree of using the accrual items in different portfolios that ranked with regard to the possibility of bankruptcy is various. At the end, we obtained similar results with evaluating the distribution method of exploiting of accrual items in the classified companies according to article no. 141 of business legislation. So there is curved in the distribution of utilization degree of accruals inthe bankrupt companies.

In recent studies, findings show that abnormal accruals have incremental information content about future cash flows. In other word, abnormal accruals are not from misestimate and have news about future cash flows. Therefore, in the present study, we test information content of abnormal accruals in predicting future cash flows in Tehran Stock Exchange. This paper empirically investigates whether abnormal accruals for the companies listed in Tehran Stock Exchange (TSE) during 1380-1389 provide incremental insight into future cash flows. Results show a significant positive association between abnormal accruals and one-year-ahead operating cash flows. This provides a rationale for the pricing of abnormal accruals by the market and suggests that abnormal accruals are not merely the products of noise in the accruals-estimation process. However, these results are conditional upon the probability of one-year-ahead bankruptcy risk.

To estimate abnormal accruals, prior researches employed a wide variety of models and estimation procedures. We evaluate the performance of three representative models, modified Jones model (MJ), MJ with operating cash flows (MJOCF), and MJ with return on assets (MJROA), using multi regression model and a sample with 80 active companies in Tehran Stock Exchange (TSE). In addition, we investigated accrual anomaly, using MJ with operating cash flows (MJOCF), and MJ with return on assets (MJROA). The result showed that the best model for perspective abnormal accrual is the MJOCF model, and that MJOCF shows less accrual anomaly.

This study examined the relationship between audit tenure and audit quality in companies listed in the Tehran Stock Exchange, TSE. The Ability of beating earnings forecast and abnormal working capital accruals were used as proxies for audit quality. The audit tenure in this study is taken with at least seven years that seems suitable for explaining audit tenure. This variable is taken as dummy variable in the regression model. All companies listed in the TSE in the period 2006 to 2011 were considered the statistical population. In this study, the panel regression approach has been used for data analysis and processing. Findings showed that audit tenure is not correlated with the ability of beating earnings forecast and abnormal working capital accruals.

Objective: The purpose of this research is to investigate the relationship between Firm-Specific Discretionary Accruals and Stock Future Abnormal Returns on Tehran Stock Exchange. Methods: This study carries out according to the information available in listed Companies in the Tehran Stock Exchange (TSE), during 2011 to 2016, on a selected sample consisting of 190 companies. To test the research hypothesis, OLS regression has) been used. Results: The results show that there is a negative and significant relationship between Firm-Specific Discretionary Accruals and Stock Future Abnormal Returns. Conclusion: Investors should distinguish between the stability of profit components (cash and accrual) when valuing companies. The disregard of this difference has made investors optimistic about the future performance of companies when the Firm-Specific Discretionary Accruals is high, and pessimistic about the future of companies when Firm-Specific Discretionary Accruals is low. Therefore, if such unskilled investors were affected on stock price, we would expect high prices for companies with high Firm-Specific Discretionary Accruals and low prices for companies with low Firm-Specific Discretionary Accruals. In fact, companies are valued incorrectly and irrationally and since the stability of Firm-Specific Discretionary Accruals is low, in future periods, they will receive less than expected returns (negative abnormal returns) and companies with low Firm-Specific Discretionary Accruals will earn more than expected returns (positive abnormal returns).