The purpose of this paper is improving profitability forecasts with information on Earnings quality in listed companies of Tehran stock exchange. We use 125 firm during years 2010 until 2014. Also, we use regression model by Eviews and statistical techniques panel data compilation. The results show that Information on earnings quality in accounting forecast models does not provide additional explanatory power about firms' future profitability. But, the usefulness of accounting information for

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... edicting future profitability does improve after the adjustment for earnings quality. Therefore, financial analysts do not incorporate information about earnings quality in their decision making process. And, profitability forecasts, adjusted for earnings quality, do not deliver additional information about future market returns. Keywords: anticipated profitability, profitability, quality of earnings, future market returns 1. Introduction. Research on financial statement analysis (FSA) documents the usefulness of accounting information predicting firms' future profitability (Ou and Penman [1989]; Ou [1990]; Abarbanell and Bushee [1997]; Fairfield and Yohn [2001]; Fairfield et al. [2003]). Research on earnings quality concludes that accounting information is dependent on firm's fundamental performance and its accounting system (Ball and Shivakumar [2005]; Dechow et al. [2010]). While prior work separately emphasizes the importance of FSA and earnings quality for informing external recipients of financial statements about firms' financial and operational performance, considerably less is known how earnings quality impacts the accuracy of FSA models. In predicting future performance, textbooks and research suggest a variety of parsimonious variables that improve the predictability of future performance. Fairfield and Yohn [2001] and Soliman [2008] present evidence that ratio analysis, that systematically breaks down profitability (RNOA) into more specific ratios according to the DuPont disaggregation, provides incremental information on accounting signals studied in prior research. Despite the popular appeal of such forecast models, prior research overlooks that accounting information flowing into forecast models might be exposed to changes in firms' earnings quality. This shift could bias profitability ratios and consequently impair the accuracy of forecasts. My study probes the extent to which the accuracy of FSA forecast models can be explained by the quality of reported earnings. In other words, I unite distinct findings of two previously separate literature streams to investigate whether joint consideration improves predictions of firms' profitability. So, this research is trying to answer the following question: Is there a significant relationship between Improving Profitability Forecasts with Information on Earnings Quality? 2. Development of hypotheses. According to high content, we consider four hypotheses: H1: Information on earnings quality in accounting forecast models does not provide additional explanatory power about firms' future profitability. H2: The usefulness of accounting information for predicting future profitability does not improve after the adjustment for earnings quality. H3: Financial analysts do not incorporate information about earnings quality in their decision making process. H4: Profitability forecasts, adjusted for earnings quality, do not deliver additional information about future market returns. 3. Methodology. In this study, change in return on net operating assets (RNOA) is independent variable. Also, accounting forecast is dependent variable. Also,Statistical population this review is all listed in companies in Tehran (IRAN) stock exchange during the period of 5 years (2010-2014). We use the method to remove systematic for sample selection. In this research to collect data of Tehran Securities Exchange Technology Management Company website and the Tehran Stock Exchange website. However, study sample shall be made with respect to following limitations: (Table 1 shows these limitations)