This empirical paper was aimed at exploring and analyzing the earnings management practices which is often refers to as “Figure Massaging”. The aim of this study is to gather further evidences as to whether these practices constituted an act of misconduct or fraud while taking into consideration the modern business environment's challenges. The analysis provided us with an appropriate evidence that on average, the listed alleged fraud firms in Malaysia had aggressively managed their reported earnings prior to the alleged fraud year and continue to smoothen their earnings subsequent to alleged fraud year through both accruals and real earnings management.

This paper examines two types of earnings management practices, the techniques employed, the motives behind the practices and the likely good, bad or ugly implications of each. The examination and analysis of this study indicates that earnings management practices based on manager's personal motives is the ugliest with the worst negative implication. However, the result of the analysis had provided insight that improved disclosure by both managers and management will reduce the risk of bad or ugly practices. It also provided an insight for future research on the implications of various motives behind earning management practices highlighted in the paper.