Global context of disparities in earnings management among enterprises: Evidence from Slovakia

Earnings management is the use of accounting techniques to produce financial reports that present an overly positive view of corporate business activities and financial position. In the context of globalization and internationalisation, the phenomenon of earnings management and legal earnings shifting is an increasingly important issue, particularly in the field of taxation and financial accounting. Earnings management helps to achieve specific targets involving the manipulation of accruals through the discretionary choices of accrual accounting, Thus, the emphasis is given to accrual earnings management, which does not influence the corporate underlying economics but involves the change in the accounting presentation of these economics. The paper depicts the basic concepts of earnings management, reviews the mainstream studies and portrays the genesis of earnings models development. The main aim of the paper is to assess the ability of selected earnings models applied in the national environment of Slovakia, where the issue of earnings manipulation is still unexplored, to detect the problems with earnings manipulation considering individual industry sectors of the national economy. The comparative analysis of the results achieved helps portray the disparities in earnings management among Slovak business entities.