Use or Abuse of Creative Accounting Techniques

International Journal of Trade, Economics and Finance, Vol. 2, No. 6, 2011

6 Pages Posted: 23 Feb 2012

See all articles by Syed Zulfiqar Ali Shah

Syed Zulfiqar Ali Shah

International Islamic University; Mohammad Ali Jinnah University (MAJU)

Safdar A. Butt

Capital University of Science & Technology, Islamabad; Pak Agro Packaging Private Ltd; Hi Tech Lubricant Ltd

Dr. Yasir Bin Tariq

COMSATS University Islamabad, Abbottabad Campus

Date Written: October 1, 2011

Abstract

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.

Keywords: creative accounting, earnings management, corporate governance

JEL Classification: M41, G34

Suggested Citation

Ali Shah, Syed Zulfiqar and Butt, Safdar Ali and Bin Tariq, Yasir, Use or Abuse of Creative Accounting Techniques (October 1, 2011). International Journal of Trade, Economics and Finance, Vol. 2, No. 6, 2011. Available at SSRN: https://ssrn.com/abstract=2009823

Syed Zulfiqar Ali Shah

International Islamic University ( email )

PO Box 1243
Sector H-10
Islamabad, Kpk 44000
Pakistan

Mohammad Ali Jinnah University (MAJU) ( email )

74 E
Blue Area, Jinnah Avenue
Islamabad, Punjab 46000
Pakistan

Safdar Ali Butt

Capital University of Science & Technology, Islamabad ( email )

Islamabad Expressway, Near Kakpul
Kahuta Road,
Islamabad, ICT 44000
Pakistan
+92-51- (Phone)

HOME PAGE: http://www.jinnah.edu.pk

Pak Agro Packaging Private Ltd ( email )

Suite 2, CTC Center
Street 9, G-8/2
Islamabad, ICT 44000
Pakistan

Hi Tech Lubricant Ltd ( email )

1A Danepur Raod
GOR,
Lahore, Pakistan, 44000
Pakistan

Yasir Bin Tariq (Contact Author)

COMSATS University Islamabad, Abbottabad Campus ( email )

University Road
Tobe Camp
Abbotabad, Khyber Pakhtun Khawa 22060
Pakistan

HOME PAGE: http://www.cuiatd.edu.pk

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