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Creative Accounting, An Expression Of The Disconnection Between Accounting And Taxation

Author

Listed:
  • Adrian GroÅŸanu
  • Paula Ramona RăchiÅŸan
  • Sorin Romulus Berinde

Abstract

In the context of a developed capital market, the dimensioning of the accounting profit is very important for investors, considering the financing of the economic entities to a higher degree than that offered by the banking system. We intend to emphasize some risks that appear from the perspective of creative accountancy (an expression of the disconnection between accountancy and taxation). The risks consist in some less ethical tendencies of artificially oversizing and undersizing the accounting and the tax profit according to certain objectives, risks that can be controlled through a better activity of accounting regulations. We can say that the accounting result can be influenced in the case of a taxation connected ratio. On the other hand, the accounting result is subject to an increasing risk due to the creative accounting. Under these circumstances, a question appears: Which risk is better to be assumed taking into account the dimension of the accounting result?

Suggested Citation

  • Adrian GroÅŸanu & Paula Ramona RăchiÅŸan & Sorin Romulus Berinde, 2012. "Creative Accounting, An Expression Of The Disconnection Between Accounting And Taxation," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-5.
    • Handle: RePEc:alu:journl:v:1:y:2012:i:14:p:5
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    Cited by:

    1. Cristina Boța-Avram, 2013. "Effects Of Governance On Corporate Ethics: A Cross-Country Investigation," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(50), pages 3-26, December.

    More about this item

    Keywords

    Financial Regulations; Accounting Result; Investors; True and Fair Value; Risks;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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