 Earnings management , in accounting , is the act of intentionally influencing the process of financial reporting to obtain some private gain . Earnings management involves the alteration of financial reports to mislead stakeholders about the organization 's underlying performance , or to " influence contractual outcomes that depend on reported accounting numbers . " Earnings management has a negative effect on earnings quality , and can lead to a decrease in the efficiency of the market. kwietniki
Earnings management is the practice of intentionally distorting financial reports to make a company or an individual appear more profitable than they really are. Earnings management is a form of fraud that occurs when a company