It is clear that the goal of financial statements or financial reports is representing summarized and classified information on the financial status, financial performance and financial flexibility of the business unit, in a way that it is useful for a wide range of users of financial statements in adopting the economic decisions. These reports are necessary for each investment. They are helpful for companies in reviewing their performance, being aware of the managers' activities and plans and the process of investment. For this reason, non-realization of the managers' demands and failure in improving the company's financial performance might result in manipulation and misuse of the capabilities inherent in earnings management. In such situations, managers have no way but hide this misuse in presenting their financial reports to the general assembly, while they provide transparent financial reports in cases where they are willing to represent their achievements by using fluent and comprehensible literature. Hence, the objective of this research is to evaluate the relationship between earnings management and the readability of the board's report to the assembly. To measure the readability of the report, Fog model was used, and to calculate earnings management, discretionary accruals based on the Jones adjusted model was used. For this purpose, 110 listed companies in Tehran Stock Exchange during the years 2012-2016 were reviewed and the research hypotheses were examined using panel data model. The research indicated a significant relationship between the readability (transparency) of board's annual report to the assembly and earnings management.
