Earnings Management In Terms Of Islam: A Literature Analysis

Abstract

the main purpose of this study is to examine earning management practices in context of literature evidences in Islam. The data is collected from prime source of Islam & the past studies. Literature analysis depicted that earning management is a falsehood based, deceptive practice which is unethical and it is prohibited in Islam to practice such sort of tactics for personal benefits. This study will help the researchers, Islamic business bodies and other stakeholders to understand the earning management in terms of Islam Also it will help in creating trust between the financial reports stakeholders and the organization. The Literature analysis depicts that earning management can be beneficial to an organization in some cases but in majority cases it is a deceptive strategy to avoid tax, paying off of more dividend which is forbidden according to Islamic ideology of Financial and economic practices. Also under ethical approach this sort of practices is totally unacceptable and strict action should be taken to eliminate such practices.