This paper explores the dynamic between proactive approaches to earnings management (free cash flow and profitability), passive mechanisms of observation (leverage), and proactive responses to pressure (financial crisis). Several variables may provide incentives for management to control costs and maximise profits. This research operates on the premise that management has a propensity to tinker with reported results in order to conceal losses or declines in profitability. This study used a sample of Nigerian publicly listed firms from 2010–2012 and found that earnings management was most common when companies were profitable and in good financial condition. This researchs findings would help clarify the interplay between various factors, allowing regulators to make more informed decisions on how to strengthen laws and regulations and bolster public trust in financial reports.