This paper examined the accounting choices of firms that experienced bankruptcy. Firms in financial distress are expected to manage earnings upward in order to prevent or delay bankruptcy and to maintain managerial positions. The research methodology involved investigating audit report exceptions and audit review findings from three years prior to bankruptcy through the year immediately preceding bankruptcy, as well as analyzing accounting information from financial statements. The results indicate that bankrupt firms exhibited the most pronounced accounting characteristics in the year immediately preceding bankruptcy: net income declined sharply while cash flows increased substantially. The increase in cash flows is interpreted as a measure taken by management to prevent bankruptcy.