The primary objective of accounting, as an information system, is the measurement and delivery of data and information to the decision makers of users. Among the users, there are the financial authority of the appraisers and the tax examination procedures. However, the pursuit of some companies management to adopt procedures that would get illegal gains in so-called earnings management procedures. These procedures would work to create a gap in confidence in the services provided by the accounting profession. This situation causes suspicious cases on financial statements prepared by these services in the regard of official government bodies for tax function. The researcher reached, through the theoretical and practical aspects, certain conclusions. The most important of which is the earning management practiced today by companies in Iraqi Kurdistan Region to reduce the real profit in order to avoid the tax imposed on them. The alternatives in the accounting treatments and flexibility in the accounting standards is not the way paved to earningsmanagement practices if the accountant does not respect the rules and ethics of the their profession, choosing the inappropriate alternative to the nature of the company’s activity. Another conclusion is the existence of collusion between the external auditors and the taxpayer’s company.

Accordingly, the study recommended that the concerned bodies should ensure that earnings management is not practiced by companies. The need of awareness is raised about earning management and negative effects on companies. The need to maintain a single accounting process is relevant and not change it without the approval of the competent authorities. it is necessary to emphasis on company governance and not to allow the collusion between the auditors and the taxpayer’s companies, activating the role of the association of accountants and auditors, in order to advancement of the profession as well as to defend the accountants members in case of facing pressures from the owners to manipulate and cheating.