Earnings management is a new phenomenon, which has contributed to the development of accounting theory. The term earnings management occurs as a direct consequence of the efforts undertaken by managers or preparers of financial statements in an attempt to affect accounting information, especially earnings, for his/her own and/or company's benefits. Earnings management can not be interpreted as a negative action since it does not solely concern with earnings manipulation. Theoretically, there are many ways or methods available for managers or preparers of financial statements to affect reported earnings, which are considerably possible from the view of positive accounting theory. The positive accounting theory suggests that managers may have the incentives and intention to behave opportunistically for obtaining his/her private gains by selecting certain accounting methods. Empirical studies have shown that earnings management is evidenced in many economic contexts. This indicates that certain economic events or variables can be utilized as a mechanism for managing earnings. This evidence provides opportunity for accounting researchers, in particular, and management researchers to examine the possibility of occurrence of earnings management in various economic contexts.