Abstract:

Earnings Management is about the use of accounting techniques in the process of financial statements creation. Financial statements are a structured presentation of the business activities and financial situation of companies. Earnings Management is thus used for the way in which accounting rules are applied and generates financial statements according to the management's wishes. Earnings management is becoming an increasingly popular topic and therefore is the subject of this paper. The objective of presented paper is to clarify alternative techniques of earnings management. It also contains presentation of the relationship between earnings and cash flow. The presented paper consists of five parts. The first part of the paper is devoted to the theoretical aspect of earnings management.  It also contains, clarification of the creative nature of the earnings management. The paper deals with the options of application earnings management as well. The second part of the paper is aimed at clarifying alternative earnings management techniques. Within the issue of earnings management, increased attention is devoted to techniques like „Cookie Jar Reserve“, „Big Bath“, “Big bet on the Future”, “Flushing”, “Throw out a problem child”, “Change accounting”, “Operating versus non-operating income”. The third part of the paper focuses on analysing the relationship between earnings and cash flow. The analysis was carried out on the Slovak company. The fourth part of the paper is focused on discussion. The discussion deals with specific cases of the use of individual techniques, which have been defined parts before. A descriptive method, analysis, mathematical-statistical methods, graphic methods, comparison and synthesis were used in the processing of the submitted paper creation. The result of this paper is a comprehensive overview of the possibilities in the process of alternative earnings management techniques usage.