The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful in making economic decisions. So If the financial statements are manipulated, their purpose and philosophy is damaged. In addition, factors like information asymmetry and conflict of interests between ownership and management and financial scandals have heightened the importance of earnings management issue. To control it, a deep understanding of the incentives and objectives of earnings management is necessary. Hence much research has been done on the hypotheses and incentives of earnings management. In this paper we have done a comprehensive review of the subject with emphasis on research conducted in Iran and Foreign Countries. Therefore, after defining earnings management, we investigate hypotheses and incentives of earnings management.