Developing a Comprehensive Critical Thinking-Based Earnings Management Model

In the comprehensive earnings management model, the financial accounting primarily aims at providing useful information for investors to predict the performance of the economic entity. Because of assessing the current economic performance, predicting the future profitability, and determining company value, understanding earnings management is important for users of financial statements. Critical thinking in accounting can be expressed in the emergence of qualitative characteristics of accounting information, namely, impartiality, objectivity, and honest expression existing within the conceptual framework of financial reporting in most countries. Eventually, critical thinking is a rational reasoning of what people believe and what they do.