ISSN: 2222-6990
Open access
Creative accounting involves the strategic manipulation of financial statement data by accounting experts. While financial statements are expected to represent a company's performance faithfully, creative accounting has become integral to financial reporting. However, its association with the extent of managerial involvement raises concerns about the accuracy of financial data. This conceptual study aims to dissect the driving components behind adopting creative accounting practices and their profound influence on the credibility of financial reporting. The investigation encompasses critical areas, including corporate governance, agency conflicts, ethical considerations, and a company's future orientation. The findings illuminate that the utilisation of inventive accounting methods by management significantly and unfavourably tarnishes the reliability of financial reporting. Notably, statutory auditors emerge as pivotal figures capable of nurturing creative accounting practices that, when guided ethically, can positively enhance the precision of financial reporting.
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(Isahak et al., 2023)
Isahak, M. S., Saidi, B. B. M., Hadi, M. A. H. A., Mohd, N. A. S., Hanif, Azmi, N. F., & Wuryani, E. (2023). Exploring the Nexus of Creative Accounting on the Reliability and Objectivity of Financial Reporting: A Concept Pape. International Journal of Academic Research in Business and Social Sciences, 13(10), 1019–1026.
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