The overall goal of the present research is to study the relationship between debt and ownership dispersion with earnings management in firms accepted in Tehran Stock Exchange. The time period for the present research started from 2006 and continued until the year 2011for 6 years and the statistical sample entailed 111 companies accepted in Tehran Stock Exchange. The results showed that there is a reverse and meaningful relationship between debt level and dispersion with earnings overstatement.

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... This finding emphasizes on the efforts by the managers to increase the efficiency of the debt contracts and makes the effect of the supervisions by the creditors on the financial reporting environment of the companies with a capital structure based on debts known. Also the results showed that in companies with multiple ownerships the relationship between debt level and earnings overstatement decreases. According to this finding we can conclude that a multiple ownership is a factor which limits governance and supervision mechanisms in corporate companies. Managers of such companies have more opportunities and incentives for unreal financial reporting compared to companies with more concentrated ownership structured companies.