EARNING MANAGEMENT : INCENTIVES AND CONSTRAINTS

Abstract

Accounting undoubtedly offers a certain plasticity, depending on how it is understood and  interpreted, allowing for choices, options and even policies. Earnings management is likely to  be motivated by management's opportunism, or by their desire to communicate information  about the company's future performance (efficiency).  Thus, previous work distinguishes two  perspectives on earnings management: the opportunistic perspective and the informational  perspective. The present paper seeks to explore the reasons behind the adoption of P&L  management practices, in other words, to answer the question of the constraints and  motivations of accounting P&L management.

Keywords: Earning Management, Accounting; Quality; Incentives; Constraints 

ABSTRACT: 

Accounting undoubtedly offers a certain plasticity, depending on how it is understood and  interpreted, allowing for choices, options and even policies. Earnings management is likely to  be motivated by management's opportunism, or by their desire to communicate information  on the company's future performance (efficiency). Thus, previous work distinguishes between  two perspectives on earning management: opportunistic and informational. This paper seeks  to explore the reasons behind the adoption of earning management practices, in other words,  to treat the question of the constraints and motivations of accounting results management.

Keywords: Earning Management; Accounting; Quality; Incentives; Constraints