Abstract: This study examined new companies which were listed on the Dhaka Stock Exchange (DSE) for the period 1995-2005. Data were collected from company prospectuses, DSE daily diaries; DSE and SEC websites and annual report of listed companies. The lists of new listings were obtained from the various issues of the Securities and Exchange Commission (SEC) annual report. A total of 132 companies listed at DSE during the study period were selected for this study. Several hypotheses were constructed to answer the research questions drawn in this study. Findings confirmed the hypothesis that there are widespread uses of earning management among IPO firms in Bangladesh. It is found that income increasing firms employ different tools, as compared to that of income decreasing firms in their attempt to manage earnings. Income increasing firms tend to use current accruals and non-cash gains, as opposed to income decreasing firms which prefer to use non-current accruals more than current accruals. When the variables are further decomposed, it is found that change in assets and change of liabilities are significant factors used by income increasing firms whereas income decreasing firms use change of liabilities only. In final decomposition of variables, it was revealed that income increasing firms tend to use accounts receivables and accounts payables, as oppose to income decreasing companies which tend to use inventories and accounts payables in their pursuits on managing earnings. Further, research should be undertaken with larger sample and inclusion of other variables which may help explain more on issues related to earning management in context of Bangladesh.