The purpose of this study is to identify the earings and cash flows management behaviors of firms on the verge of bankruptcy by accruals. This study is dividing accruals into two categories: accruals due to a pure earnings management, and accruals due to a cach flows management. The empirical analysis was carried out using data from 69 failed and 69 similar non-failed firms during five years before the failure. The empirical results shows that failing firms are trying to adjust their cash flows as well as earnings before the failure, but the effort improving cash flows in not sufficient.