Accrual-Based Earnings Management

using a model with the highest explanatory power, as well as
verifying hypotheses about the existence of a statistically significant
relationship between earnings management and country, as well as
firm size within companies operating in the mining and quarrying
sector in 2019 and 2018. Data were obtained from the Amadeus
database. The sample contains 348 financial reports of companies
from 2019 to 2017. Research is focused on V4 companies that have
the sum of total assets higher than 2,000,000 EUR, as well as the sum
of operating revenue is higher than 100,000 EUR. Three
recommended models were used, namely the modified Jones model,
Industry model, and Kothari model. The explanatory power of these
models was tested by using several criteria. Based on the results, the
modified Jones model was chosen for earnings management
detection. According to the results, companies in the mining and
quarrying sector in V4 use earnings management techniques to
manage the profit. It is not possible to clearly determine in which
direction they manage their profit more often. Different values were
measured in the two observed periods. Based on the results, Czech
and Slovak companies used earnings management techniques to
increase their profit. On the other hand, Poland and Hungarian
companies used earnings management techniques to decrease it. Very
large as well as large companies used earnings management
techniques to decrease their profit; medium-sized companies used
earnings management techniques to increase it.