Profit smoothing and profit management

In new scientific achievements, profit smoothing is called profit management, which includes measures to reduce fluctuations in reported accounting profits. The variability of managers' forecasts has an economic value from the point of view of investment. One of the motivations of profit smoothing is to reduce the amount of profit forecasting error in certain periods compared to the current period.In order to estimate the models of this research to test the hypotheses, first the models were estimated using annual (cross-sectional) data for each of the years 1393 to 1400 and 110 companies accepted in the Tehran Stock Exchange. Then the combined data for 8 years and a total of 880 companies are tested. Therefore, it can be concluded that profit accounting management and real profit management are not a function of each other and are performed simultaneously.As a result, the second hypothesis is confirmed at the confidence level of 99%, in other words, we conclude that profit management has been applied in the studied companies.