Shareholder value maximization is one of the main objectives of a corporation; however, the management may not always achieve such an objective that may force them to employ some earnings management practices to manage reported earnings. This study deals with the opportunistic perspective where managers are suspected to perform some earnings management practices using cash flows from operations (CFO), production costs (PROD), and discretionary expenses (DISEXP), and further utilize their company’s corporate social responsibility (CSR) activities to shield the real earnings management (REM) performed. This study primarily investigates the role of CSR on the relationship of REM with financial performance and firm value. It examined 90 publicly listed companies in the Philippines for a five-year period from 2012 to 2016. Real earnings management is evaluated through deviations from normal operations which is termed as “abnormal” operations. Results show that when the company employs REM and uses CSR to shield such, the significant association between the two causes of improvement in the company’s financial performance. This study provides evidence of the benefits of using REM to manage company earnings. Employing REM and using CSR (to shield the earnings management performed) benefits not just the community but also serves the economic objectives of the firm. This study concludes that the public companies in the Philippines may have CSR activities in different dimensions and areas; however, the intention is not purely to fulfill their social obligations to the community but also to strategically achieve some economic objectives. Corporate social responsibility is used by the management not just to shield REM but also to improve the company’s financial performance.
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