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This performs an empirical investigation to evaluate the relationship between cultural values and earnings quality in some Iranian banks over the period 2005-2011. The individualism, uncertainty avoidance, power distance and masculinity dimensions are regarded as criteria for cultural values. The study also considers change in return on assets and loan loss provisions as the main criteria for earnings quality of banks. For measuring the cultural values, the questionnaire of Hofstede [Hofstede, G. (1994). The business of international business is culture. International business review, 3(1), 1-14.]. The study also uses two measures to calculate earnings quality: 1-just-meet-or-beat the prior year’s earnings and 2- Income smoothing through loan loss provisions based on compound linear regression. Research results showed that there was a weak relationship between cultural values and earnings management.

This paper evaluates the effect of profit quality structures on capital cost and the primary objective is to disclose the effect to investors. The research methodology is practical based on its goal and its research design is Expose-Facto. The study selects 36 Iranian firms as statistical sample over the period 2006-2010 from some Iranian firms and the study selects post performances from their financial reports. The statistical parameters, statistical plots, multiple-variables linear-regression and correlation analysis are implemented for data analysis. The results show that the estimated model could explain 22 percentages of variable changes. This means that there is a weak linear relationship between cost of capital and profit persistence, profit predictability and other variables. Based on the regression estimation we concluded that there was a direct relationship between earnings persistence and cost of capital and there was a reverse relationship between earnings predictability and cost of capital.