Somayeh Rashidi - Graduated from M.A, Department of Accounting, Islamic Azad University Branch of Damavand Research Science,Damavand, Iran
S.Ali Vaeez - Persian Gulf International Educational Branch, Islamic Azad University, Khorramshahr, Iran
Mohammad Ramazan Ahmadi - Assistant Professor of Accounting, Shahid Chamran University, Ahwaz, Iran

The purpose of this study was to investigate the relationship between information asymmetry and theearnings stability in the financially insolvent companies listed in Tehran Stock Exchange. Earningsstability means earnings repetition in the next periods. To measure the dependent variable, i.e. earningsstability, the estimation of the future and current earnings model is used. To test the research hypothesesthe data related to 457 companies listed in Tehran Stock Exchange as the statistical sample and for theperiod of 2006-2015 have been analyzed using combinational data analysis method. In order to estimatethe appropriate models of hypotheses testing in combinational data Chow and Hausman tests were used.The research results suggest that there is a negative and significant relationship between informationasymmetry and earnings stability. There is no significant difference in the relationship betweeninformation asymmetry and earnings stability in financially insolvent companies and non-insolventcompanies. Increasing the probability of bankruptcy of the company, the relationship betweeninformation asymmetry and earnings stability does not change.

Information Asymmetry, Earnings Stability, Financially Insolvent Companies, Bankruptcy Risk