This paper features a case study of one of the main Brazilian banks of the 90's: Banco Nacional S/A (BNSA). The bank had its intervention decreed by Central Bank of Brazil in 1995, after the existence of insolvent assets, originated by fraudulent earnings management, were identified. The study aims to investigate the fraudulent earnings management of BNSA, both in motivational aspects and in relation of the effects in its balance sheet structure. The methodological approach of the study encompasses: (i) an explanatory research, regarding the intended aim of the study; (ii) case study, regarding the applied procedures; and (iii) a qualitative research, regarding the approach to the problem. It was concluded that irreconcilable conflicts of interest might occur between the agent and the principal, according to the Agency Theory. The paper also emphasizes the importance of knowledge of finance information data to identify the main facts, the relevant adjustment and the correct disclosure of the financial condition of an entity.
Earnings Management; Agency Problems; Banco Nacional S/A
