摘要：The insolvency situation is characterized by the worsening of the internal financial crisis of the company, a situation in which the organization doesn`t have the necessary resources to fulfill its obligations and it is absolutely unable to pay its debts. The characteristics of this phenomenon and the pressure for bankruptcy can lead managers to use discretionary techniques to influence market perception about the viability and credibility of the company and decrease the probability of being fired. Under Agency Theory and the assumptions for earnings management, the objective of this paper was to examine the association between ernings management and the insolvency stages in BRICS companies in theperiodof2009-2013.Toachievethisobjective, as proxy for earnings management, it was used modified Jones model (1995), while for insolvency variables, it was considered two general aspects treated by Altman (1993): flow and balance insolvency. Spearman correlation, Mann-Whitney U test and Balanced Panel Data Regression were used for a sample of 9,330 observations. The results of correlation and the median test confirmed the hypothesis that companies in insolvency stages have greater incentives to engage in discretionary practices, but only flow-based insolvency exerts a statisticallysignificantinfluenceonthelevelofearningsmanagement.
