The purpose of this study is to incorporate the role of earning management in the strategic level decisions of the firms. These decisions include the capital structure decisions, dividend decisions and investment decisions. First two decisions are known as external decisions and later one is called internal decision. Dividend yield has been used as a measure of dividend policy and leverage has been used as a proxy of capital structure measured by the total debt to total assets ratio. Investment has been measured by the change in fixed assets while discretionary accruals -measured by the Jones (1995) model as modified by Kothari, Leone and Wasley (2005) – appeared as a proxy of earning management. Results of fixed effect model shows that the earning management has positive relationship with leverage and negative with the investment. The result of fixed effect model shows that the earning management has no association with dividend yield. Supervisor:- Dr. Arshad Hassan