Background
Earnings Management Earnings management could be defined as activities that involve legal and reasonable management the ultimate aim of which is to achieve financial results that are not only predictable but also very much stable. We wouldn’t be wrong if we said that earnings management is the complete opposite of management which involves illegal activities and financial representations which do not reflect the true and accurate economic state of the company. These types of activities are also very commonly phrased as ‘cooking the books’. Earnings management could ultimately turn into a problem with the money making goals set ...