Does poor legal protection of minority shareholders provide enough incentives for majority shareholders to expropriate minority shareholders and hide their unscrupulous behavior through accounting manipulations? This paper attempts to study the effect of ownership structure (ownership of the largest shareholder and identity of the largest shareholder) on earnings management in Morocco. Using annual estimates of discretionary accruals, we document that the presence of institutions as the largest shareholder has a negative impact on earnings management. Our results show that firms with foreign or local institutions as the largest shareholders engage in significantly lower earnings management than other firms. Our results are consistent with prior literature that considers institutions – which have greater resources, more sophistication than individual investors, and more relevant expertise – as important monitoring device. Interestingly, our results show that ownership concentration – percentage shareholding of the largest shareholder – has no significant impact on earnings management. The result is in contrast to prior literature that suggests ownership concentration to either cause alignment effect and result in lower earnings management or cause entrenchment effect and result in higher earnings management.