 Often time Managers use reporting strategies regardless if the external users are naive and ignore management's ability to manipulate earnings or if users are sophisticated and can accurately deduce the management's disclosure strategy.When times are bad for the corporations financially, as a financial reporting strategy, managers will under-report earnings by the maximum they can in the current period, in order to report higher future earnings.On the other hand, in both academic and business press, earnings management has negative connotations because it suggests the tampering of earnings by management at the disadvantage of investors and other external users.