Earnings management is “the purposeful intervention in the external financial reporting process with the intent of obtaining some private gain” (Schipper, 1989). It is the act usually done by the managers.In a wide angle “earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported  accounting numbers.” (Healy and Wahlen, 1999).Some level of flexibility and discretion in the use of accounting rules are available in Generally Accepted Accounting Principles (GAAP)while reporting the financial results. These flexibility allows managers to opportunistically engage in earnings management. This managerial opportunistic intervention misleads the stakeholders by providing an untrue financial report.