This paper examines the comparison of the effect of matching principle on the quality of financial reporting between financially healthy, financially distressed and bankrupt companies. The sample of this study consists of 189 companies listed in Tehran Stock Exchange during a period of 2010-2014.  For testing matching variable we use the correlation between income and expenses in over a period of 13 years. The two criteria to measure the quality of financial reporting are used: first, accuracy of accounting information in forecasting future cash flows, second: information content of accounting income. Result show that there is a significant and positive relation between matching variable and accuracy of accounting information in forecasting future cash flow variable. Also a negative correlation between matching variable and Information content of accounting income is found. By dividing firms into three groups: financially healthy, financially distressed and bankrupt companies, and comparing matching effect on the quality of financial reports between the three group of companies, we find that matching effect on the quality of financial reporting is different.