Iran's banking system is the economic arm of the government after revolution. Especially in the implementation of the Fourth Economic, Social and Cultural program, an important part of the success of the program influenced by the strength of the banking system that by imposing sanction on the central Bank, this capability is targeted. On the other hand, the effect of some macroeconomic variables such as bank sanctions on profit manipulation by managers are not specified.
That's why this research is trying to study the impact of Central Bank sanction on earnings management in listed companies in Tehran Stock Exchange. To test this effect, the number of 145 companies listed in the Tehran Stock Exchange were studied during the period 2009 to 2014. In this paper, earnings management indicators are measured and expressed by using the modified Jones model and the amount of earning smoothing. In the statistical analysis is used T-test. Results suggest that the level of earnings management was increased in the listed companies during the years of imposition sanctions on Central Bank.