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Creative Accounting: Between Risk And Opportunity. An International View

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  • Marius-Sorin CIUBOTARIU

    (Stefan cel Mare University of Suceava, 720229, Romania)

  • Cristina-Raluca CERNOVSCHI

    (Stefan cel Mare University of Suceava, 720229, Romania)

Abstract

The expectations of users of accounting information, in addition to frequent legislative changes and the attempt to standardize accounting standards, push companies and their management to resort to creative accounting, a phenomenon whose main aim is to distort the financial reality in order to achieve all the objectives set. Creative accounting can be used to distort accounting information either by ignoring ambiguous regulations or by using accounting policies and options in a legally correct but immoral manner. This phenomenon is a topic intensively addressed in recent years by people specialized in the field of accounting because it causes financial problems with long-term impact. This paper aims at a comprehensive survey of the literature from which we will draw both how creative accounting has evolved and the different approaches. We will examine existing analogies and comparisons, the views of authors from different backgrounds and cultures on the concept and what it means for users of accounting information. The discussion takes into account the dual nature of creative accounting by exposing both the positive influences it has on organizations and the risks it entails. By systematically reviewing the literature, this study contributes to a complete picture of creative accounting, bringing together in a single document the views of authors from many geographical areas, developed through different intersections with the effects of this concept.

Suggested Citation

  • Marius-Sorin CIUBOTARIU & Cristina-Raluca CERNOVSCHI, 2024. "Creative Accounting: Between Risk And Opportunity. An International View," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 12(2), pages 67-72, February.
    • Handle: RePEc:scm:ejafbu:v:12:y:2024:i:2:p:67-72
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    References listed on IDEAS

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    1. Ibtihal A. Abed & Nazimah Hussin & Mostafa A. Ali & Hossam Haddad & Maha Shehadeh & Elina F. Hasan, 2022. "Creative Accounting Determinants and Financial Reporting Quality: Systematic Literature Review," Risks, MDPI, vol. 10(4), pages 1-25, April.
    2. Diana Balaciu & Victoria Bogdan & Alina Beattrice Vladu, 2009. "A Brief Review Of Creative Accounting Literature And Its Consequences In Practice," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-16.
    3. Ali, Waqar & Ali, Sikandar, 2023. "Analysis of Organizations Financial Performance: A Study of Pakistan’s’ Cement Sector," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 9(3), pages 243-252, September.
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