Earnings Management: A Review of Selected Cases

The past decade has been characterized as a period of financial crisis. A number of high-profile cases have highlighted the role of financial reporting and the issues surrounding earnings management. The flood of these so-called ‘accounting scandals’ and the alarming increase in accounting revisions and restatements has drawn the attention around the globe of accounting researchers and the popular press alike. Among the questions that need explanation are: 1) ‘What is earnings management or mismanagement?’ 2) ‘What is the role of judgment in ethical financial reporting?’ and 3) ‘What are the difficulties of identifying earnings management?’. In order to answer these research questions,this paper reviews a literature on the topic and then identifies and places on an earnings management continuum some of the major cases globally over the last decade