Abstract

In order to measure earning smoothing, it is used from discretionary accrual which is regarded as index of
management judgment in applying earning smoothing procedures. Pattern for determining discretionary accrual
is Dechow and Richardson pattern; therefore, 56 active companies at Tehran stock exchange during time period
2002-2007 were selected based on separating method. In order to determine discretionary accrual it is used from
data arrangement on integration basis and regression pattern by using OLS method. Then in order to mention
effect of size, number of employees, financial risk and structure of ownership as corporate governance
mechanism, it is used from test of comparing averages of 2 independent universes as 2 continued forms. Results
of this test indicates effectiveness of size, financial risk and lack of effectiveness of structure of ownership
including institutional and block shareholder on type of earning smoothing at 95% certainty. In addition, effect of
number of employees on type of earning smoothing is confirmed at 90%.

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