Abstract:

Earnings management is becoming an increasingly popular topic and is therefore the subject of this paper.  The aim is to clarify theoretical aspects of earnings management models and try to underline the most suitable application for each model. The presented paper consists of four parts. The first part of this paper is focused on the explanation of theoretical background of earnings management. In the theoretical part there are definitions of earnings management by several authors. In the first part, there are also motives aimed at realization of earnings management. The second part of this article deals with forms of earnings management and selection of profit models according to individual types of earnings management. From a total of twenty-nine models, the article discusses in more detail theoretical aspects Healy model, DeAngel model, Dechow and Sloan model, Jones model and modified Jones model. The third part paper focuses on possible ways of applying models that we defined in previous part of paper.  The fourth part deals with the conclusions in field of earnings management. Subsequently, it also deals with the possibility of further research in field of earnings management. The result of this paper is a comprehensive overview of how various models of earnings management can be used. The descriptive method and deduction are also used in elaboration of presented paper.