Evaluating and measuring the quality of reported earnings by firms listed in Tehran Stock Exchange

Purpose: So far, many researches have been done to assess the quality of firm’s reported earnings. However, neither the measuring problem of earnings quality is solved nor a unanimously accepted criterion is presented. The purpose of this study is to measure the earnings quality of the companies listed in Tehran Stock Exchange.
Methodology: This study examined 130 listed companies. Earnings quality was assessed using three criteria: Leuz et.al(2003), Barton and Simko(2002) and Penman (2001). At the end, in this study, the final judgment was done by consensus among the three criteria. In the other words, if there were complete consensus between the results of three criteria, then we judge about the quality of earnings. Otherwise, researchers didn’t offer any judgment.
Findings and results: data analyzing showed that: first, in the significant part of the companies, there aren’t consensus among the three criteria. Second, in cases which there are complete consensus among the three criteria, the consensus is on the high quality. Research result is: in Tehran Stock Exchange, for judging and decision making about the firm’s earnings quality, it is better to use several criteria rather than using one criterion.