Use or Abuse of Creative Accounting Techniques
Syed Zulfiqar Ali Shah
International Islamic University; Mohammad Ali Jinnah University (MAJU)
Safdar A. Butt
Mohammad Ali Jinnah University, Islamabad; Pak Agro Packaging Private Ltd; Bank of Azad Jammu & kashmir
Yasir Bin Tariq
Mohammad Ali Jinnah University (MAJU)
October 1, 2011
International Journal of Trade, Economics and Finance, Vol. 2, No. 6, 2011
The study has been conducted to have a detailed view on creative accounting. A very important question has been tried to be answered in this study that why managers do creative accounting and how they become successful in performing such practice in the presence of stringent rules and procedures. Another aspect of creative accounting has been tried to be explored that whether this creative accounting practice is good for the companies or it brings companies in crises situation. Discussion based model has been used on the basis of past references and experiences. Link of governance with creative accounting practices has also been tried to be explored in the study. At the end it is concluded that the complex and diverse nature of the business transactions and the latitude available in the accounting standards and policies make it difficult to handle the issue of creative accounting. It is not that creative accounting solutions are always wrong. It is the intent and the magnitude of the disclosure which determines its true nature and justification.
Number of Pages in PDF File: 6
Keywords: creative accounting, earnings management, corporate governance
JEL Classification: M41, G34Accepted Paper Series
Date posted: February 23, 2012
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