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earing management, or as it is referred to as fraudulent accounting, is a set of accounting practices carried out by the company's managers in order to influence the accounting and financial information included in the financial statements of the institution in order to achieve certain goals.

This misleading financial disclosure (manipulating the financial position of the institution) transmits incorrect signals to shareholders and investors, which is reflected on the decision-maker's abilities to determine the value of the company.

Earnings management is practiced in various ways, including the effect on operating cash flows, which is reflected on the market value of the company due to the relationship between them.