Abstract

http://ssrn.com/abstract=230872
 
 

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The Ethics of Creative Accounting: Some Spanish Evidence


Oriol Amat


Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

John Blake


Independent

Ester Oliveras


Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

April 2000

Univ. Pompeu Fabra, Economics and Business Working Paper No. 455

Abstract:     
'Creative accounting' involves accountants in making accounting policy choices or manipulating transactions in such a way as to give the impression in the accounts that they prefer. While regarded as unethical by most observers, a defence of creative accounting can be based on the ability of the users of accounts to identify bias in accounting policy choices and make appropriate adjustments.

In this paper we take the example of the Barcelona Football Club where the club management made three key accounting policy choices that presented a favourable position, and a supporters' club presented an alternative report choosing three alternative accounting policies that presented an unfavourable position. We presented each of these financial reports to one of two groups of Spanish bank loan offices, with supporting notes making the impact of the accounting policy choices clear. We found that the more favourable set of accounts was significantly more likely to attract a positive response to a loan request.

This result undermines the defence for creative accounting, based on the ability of users to identify manipulation.

Number of Pages in PDF File: 15

Keywords: Creative accounting; Ethics; Spain

JEL Classification: M41, M43, G21

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Date posted: August 1, 2000  

Suggested Citation

Amat, Oriol and Blake, John and Oliveras, Ester, The Ethics of Creative Accounting: Some Spanish Evidence (April 2000). Univ. Pompeu Fabra, Economics and Business Working Paper No. 455. Available at SSRN: http://ssrn.com/abstract=230872 or http://dx.doi.org/10.2139/ssrn.230872

Contact Information

Oriol Amat (Contact Author)
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 16 55 (Phone)
+34 93 542 17 46 (Fax)
John Blake
Independent
No Address Available
Ester Oliveras Sobrevias
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 16 73 (Phone)
+34 93 542 17 46 (Fax)
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