In different definitions on the concept of earnings management, it is focused on the issue that the earnings management is done to mislead the stock market. However, this question has not been answered that: is the capital market capable to detect the different strategies of earnings management? In this research, after measuring the real and accounting (accruals based) earnings management criteria in industry leve, to appraise the capital market’s ability to detect the real earnings management and accounting earnings management, this paper uses the non-linear simultaneous equations and Mishkin (1989) test with panel data for 117 firms listed in Tehran Stock Exchange during 2002 - 2015. The results show that the Tehran Stock Exchange is capable to detect accounting and real earnings management through manipulation of discretionary expenditure. However, the research results indicate that the capital market can not detect the real earnings management trought manipulation of sales, production and assets sales in mentioned period and managers mislead the capital market by adopting the policy of real earnings management trough mentioned approach.