The deviation from the virtues of objectivity and inconsistency with the factual requirements of business survival as demonstrated by investors' contented financial reporting practices in recent years resulted sudden collapse of many giant corporates which heightened the demand of truthful and transparent financial reporting to ensure quality of financial information. This study with the help of the cross-section modified Jones model (Dechow et al., 1995), evaluated discretionary accruals (DA) which is considered as proxy for measuring earnings management and dealt with the 98 non-financial firms of ET-500 Listed Indian Companies using the data covering a period from 2012 to 2016 and explored the prevailing earnings management practices across the different sectors. The empirical findings are quiet interesting and are in line with the findings of existing literature of other developing economy. The average DA is estimated at 0.81% of the total assets of the firms, which is unavoidably comparable within industry practices elsewhere in the world. An industry specific analysis discloses that the incidence of higher earnings management in Electric Equipment Industry (13.84%) and minimum in Personal Care Industry (0.61%). Finally, the study concludes that the observed pattern of DA over the years under consideration signals a belittling trend in the first two years (in 2014-15 and 2015-16) immediately after execution of the new Companies Act 2013 as compared to the unstinting prior years.
Earnings Management, Discretionary Accruals (DA), ET-500 Listed Companies.