The study found evidence to support the hypothesis that earning management was positively associated with corporate social and environmental disclosure level. Also, it was found from multivariate analysis that earning management was a predictor or a significant exploratory variable of corporate social and environmental disclosure level. The finding confirmed the political costs hypothesis that the more a firm is subject to potential wealth transfers in the political process, the more its management is likely to adopt accounting policies that reduce such a transfer. Political costs faced by firms create incentives for managers to engage in downward manipulation of earnings. In conservative accounting policy, in the case of companies asking for government subsidies, earning management is conducted to encourage a positive regulatory action by attempting to influence the government, to make a favourable assessment to the company’s interests (Magnan et al., 1999).