Critical thinking about creative accounting in the face of a recent scandal in the Turkish banking sector

Mine Omurgonulsen and Ugur Omurgonulsen

CRITICAL PERSPECTIVES ON ACCOUNTING, 2009, vol. 20, issue 5, 651-673

Abstract: In the last two decades, serious accounting scandals occurred in large companies (e.g. WorldCom and Enron) and in the banking sector (e.g. BCCI, Barings, Allied Irish Bank and Baninter). Then the problem of creative accounting with its legal and illegal aspects has come into agendas of business firms and governments. In this paper, a certain type of creative accounting practices (i.e. fraud) has been examined in the light of a Turkish case (i.e. the Imarbank Scandal). It has been found that deficiencies in the legal frameworks for banking and accounting, inadequacies in the autonomy of governmental regulation and supervision bodies, practical difficulties in enforcing legal and ethical rules due to the slow functioning of the judicial system are significant reasons for creative accounting practices in addition to the personal greed of both owners&top management of Imarbank and its customers. However, the intention and capability of political power in combating such kind of corruption are also crucial.

Keywords: Creative accounting; Fraud; Manipulation of accounting records; Agency theory; Independent supervision and auditing; Scandals in the Turkish banking sector; Uzan Group; Imarbank of Turkey; Savings Deposit Insurance Fund of Turkey; Banking Regulation and Supervision Agency of Turkey (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:crpeac:v:20:y:2009:i:5:p:651-673

DOI: 10.1016/j.cpa.2007.12.006

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