Creative Accounting: Between Risk And Opportunity. An International View

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.