Earnings management in global background

Abstract

Earnings management is a general term in accounting decisions that may affect the results of the financial statements. Financial statements represent the core of information is used not only by internal but also external entities. Their role is to provide a true picture of the financial situation and the performance of a particular business in an international environment. In practice, however, there may be opportunities to influence accounting information using a variety of methods and techniques, and as a result, the financial statements lose their function and misrepresent the accounting data, resulting in profit manipulation. Profit manipulation is also dealt with by the phenomenon of earnings management, which is a topical topic in the world of finance in the international environment. This is a very complex and multifaceted phenomenon occurring in companies, irrespective of their territory, area of business or size. Several profit models are used to measure and detect earnings management, whose detection capability varies. This paper focuses on the selection of profit models according to individual forms of earnings management and the assessment of variable profit models in the V4 countries.