Purpose To mislead shareholders – about a firm’s actual economic performance, managers frequently manage dividends. Earnings management also affects performance reviews. Managers attempt to manage reported earnings caused by current economic events to accurately reflect their current performance.
Research design, data, and methodology – The sample consisted of 312 company-years from companies in the pharmaceutical distribution industry listed on the Tehran Stock Exchange. A study period from 2004 to 2014 was selected. In this study, a model for measuring the performance of the net profits to total assets of a division of Jones was used to measure earnings management.
Results – This study found a negative correlation between corporate performance and earnings management.
Conclusions – The results for the earnings management company indicated a significant inverse relationship. Therefore, the company’s performance weakened as its earnings management activity increased. In other words, the results showed that the company’s performance-based accruals earnings management, the actual management of profits, and the general level of earnings management had significant inverse relationships. Thus, as the company’s profits declined, earnings management activity increased.

1. Introduction
2. Research method
3. Measuring performance
4. Findings
5. Descriptive statistics
6. Discussion and conclusion
References

• Ryhaneh Haghighi(Co- Author, Ferdowsi University of Mashhad, Mashhad, Iran)
• Shaban Mohammadi(Hakim Nezami University of Quchan, Quchan, Iran.) Corresponding Author
• Ali Shirzad(First Author, Ferdowsi University of Mashhad, Mashhad, Iran)