Creative Accounting in Financial Reporting

Lacramioara Mansour () and Elena Cerasela Spatariu ()
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Lacramioara Mansour: Bucharest University of Economic Studies, Bucharest, Romania “Ovidius” University of Constanta, Faculty of Economic Sciences, Romania
Elena Cerasela Spatariu: “Ovidius” University of Constanta, Faculty of Economic Sciences, Romania

Ovidius University Annals, Economic Sciences Series, 2024, vol. XXIV, issue 2, 567-574

Abstract: One of the great financial accounting challenges – creative accounting can be investigated from several perspectives: accounting, ethical, legal or psychological. The paper aims to achieve, based on a qualitative analysis, a synthesis over the perception of the creative accounting techniques from an ethical perspective, but also to identify the possible motivations that can be the basis for these techniques use by the managers and the professionals in the financial field. In general, creative accounting is seen as a negative technique, as a method of manipulating financial statements, which can negatively influence, in particular, the decision-making process and, in the long term, even the company itself, but which can be limited by implementing some strict reporting standards, independent audits, ethical education and by the use of innovative technologies. Among the identified motivations, we found the desire of the management to reach the performance standards imposed by the capital holders, obtaining capital under favourable conditions, reducing the tax bases, meeting certain criteria necessary for listing on the stock market, covering some faulty management decisions.

Keywords: creative accounting; creative accounting techniques; ethic in accounting; accounting manipulation; creative accounting motivation (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2024
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