Use or Abuse of Creative Accounting Techniques

Shah, Syed Zulfiqar Ali; Butt, Safdar Ali; Tariq, Yasir Bin

doi:10.7763/ijtef.2011.v2.161

Cited by 32 publications

(19 citation statements)

References 5 publications

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“…cooking the books, income smoothing, aggressive accounting, massaging thenumbers, earning management etc. While Shah et al (2011) claimed that in a critical situation businessentity can use creative accounting as a powerful weapon but it highly depend upon the management andethical values of business that how this practices used at that critical point. Number of factors like agency problem, company's ethical values, future orientation, corporate governance, internal / external auditors comment, standards etc.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It means company's orientation about achievement of short term goals or gaining long term benefits also one reason to adopt the creative accounting practices. Shah et al (2011) concluded creative accounting as a weapon which is used by a company in a critical situation by adopting flexibility in its accounting/ reporting regulations. Efiok and Eton (2012) study deeply explain about macro manipulation in financial reporting and its impact on share price and capital market of firm.…”

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Influence of Creative Accounting on Reliability and Objectivity of Financial Reporting (Factors Responsible For Adoption of Creative Accounting Practices in Pakistan).

Shahid

2016

JAFEE

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Purpose: Intellectual modifications (creative accounting) in financial reports to make them attractive are very emerging and vastly accepted practices around the globe. But these practices are deceiving and unethical. This study aims to explore the factors encourage the adoption of creative accounting practices like agency problem, corporate governance, company's ethical value, company's future orientation etc. as well as how these practices affect the reliability and objectivity of financial reporting. Methodology: This research is an empirical research and data is collected from accounting and management professionals of manufacturing industry of Punjab via structured questionnaire. Convenient sampling technique used to select sample size and SPSS software used for data analysis. Findings: Results of this research explored the positive association between agency problem and creative accounting while corporate governance, company's ethical value, company's future orientation have negative impact on creative accounting. It is also verified that creative accounting has significant negative impact on reliability as well as objectivity of financial reporting. Implications: Results of this study will assist the company's management how to control adverse influence of these manipulative activities on reliability and objectivity of financial reports as well as provide literacy to investors to be aware of such extensively using speculative activities. Limitations: Limitations of this study are that it is only considering few factors as well as manufacturing industry of Punjab.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Influence of Creative Accounting on Reliability and Objectivity of Financial Reporting (Factors Responsible For Adoption of Creative Accounting Practices in Pakistan).

Shahid

2016

JAFEE

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“…Given the relatedness of the Slovak and Czech market, the model will be used and interpreted on the Slovak company. [10] The main definition is based on this formula: [8] (1)…”

Section: Techniques Of Purpose Manipulationmentioning

confidence: 99%

The creative accounting in determining the bankruptcy of Business Corporation

Kovalová

Michalíková

2020

SHS Web Conf.

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If there is a period of unfavourable to critical economic development Business Corporation, there is no doubt about the significance of determining the actual factual moment of bankruptcy of the business corporation. In such a situation, it is crucial for further development approach of the statutory body of Business Corporation in terms of truly evaluation and timely search for a constructive solution. There are different methods of creative accounting to delaying the impending corporation bankruptcy. This paper describes the individual ways in which the creative accounting can favour the business corporation, e.g. increase the reported earnings or reduce the reported loss, manipulate with indicators used in financial analysis, conceal financial risk or strengthen the company´s access to finance. The reason for using these practices by the company management can be just a simple delay in solving the situation, trying to keep the company position as long as possible or the reasons are more complex and sophisticated. There are many model to predict the adjusting financial statements. We described and applied two of them, the CFEBT model and BENEISH M-score model.

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“…Fizza Tassadaq and Qaisar Ali Malik [12] in their studies raise important operational control in the implementation of creative accounting in the industrial sector. Syed Zulfiqar Ali Shah, Safdar Butt and Yasir Bin Tariq [13] showed that the operation of creative accounting allows avoid operational control of crisis management in the enterprise.…”

Section: Overview Of Publications and Research Objectivesmentioning

confidence: 99%