THE QUALITY OF FINANCIAL-ACCOUNTING INFORMATION IN THE CREATIVE ACCOUNTING EQUATION – FROM EXACT RELEVANCE AND REPRESENTATION TO UNCERTAINTY AND AMBIGUITY

Marilena Roxana Zuca (), Victor Munteanu () and Alice Emilia Tinta ()
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Marilena Roxana Zuca: Romanian-American University, Romania

Journal of Information Systems & Operations Management, 2023, vol. 17, issue 1, 223-248

Abstract: At the national, European, and international levels, there is a need for quality financial information, and accounting standards have imposed several fundamental and enhancing features to make sure that users can profit from the data from annual financial statements. The current research, however, shows that as innovative accounting techniques are employed, the quality of financial accounting information is impacted, losing its utility, and shifting from being relevant and accurately represented to being uncertain and ambiguous. The management of the entity assumes a few risks as a result of the implications of creative accounting on the annual accounts. These risks can be minimized by putting strategies in place to identify and restrict the mechanisms used to manipulate financial accounting information. If we consider the fact that managers largely consent to the use of creative accounting, acting under the guise of its legality, this is challenging to accomplish.

Date: 2023
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