Creative Accounting - Essay Example

Only on StudentShare

Extract of sample
Creative Accounting

Among the various stakeholders, investors and potential investors constitute the primary group for whom financial statements are basically intended. Investors put their hard earned money with a firm on the basis of the financial information exhibited by statements and their scrutiny. Therefore, accountants are bound to oblige the rules and regulations of accounting practices in the preparation and presentation of financial statements. These rules are framed by accounting bodies of a country in line with international accounting standards. Nevertheless, some accounting standards are violated by accounting professionals/firms for their personal gain. Such practices are illegal and against the ethics of accounting professionalism. Many such practices have been observed from different parts of the world. Such a practice is known as creative accounting. Creative accounting is a sort of accounting scam, which does not follow the accounting rules and principles as such or finds the loop holes in the accounting rules for the benefit of the preparers and those at the helm of the organization. This essay is meant to detail the basics of creative accounting and the reasons thereof. ...
Download paper

Summary

Financial accounting involves the measurement of financial transactions of a firm and its presentation through various reports called financial statements. …
Author : gradyurban

Related Essays

Ensuring a Creative and Innovative Workforce
The recent shift from industrial to knowledge economies has been rapid and abrupt, leading to a series of novel discoveries and innovation in various fields across all sectors of the economy, thereby drastically increasing the significance of creating and developing a highly creative workforce. The fact that innovation is the key to human survival, has been reasserted over the years, with a wide range of creative and innovative ideas being generated and applied for human consumption. Companies today rate creativity and innovation as highly essential pre-requisite of strategies, designed to...
8 pages (2008 words) Essay
Ethics in Busniess
For example, in U.S it is necessary for business accountants to implement given rules when conducting their businesses. The American system refers to these rules as the Generally Accepted Accounting Principles (GAAP) when they are involved in reporting the business financials. Therefore, every public company in U.S should follow the set accounting principles and report so that they can accurately release their financial information (Needles & Powers, 2011). Ethical Numerous fraud cases in the contemporary society constitute the moral and legal issues in accounting and financial reporting of...
3 pages (753 words) Essay
Business Research Ethics
The research it conducted about its company was twisted in order to reflect fair and excellent performance to the potential companies to be acquired. In addition, apart from falsifying the financial data, WorldCom Company skewed its research findings such as its market positioning, its internal structure and internal operations (Jackson, 2005). However, with time WorldCom unethical practices started to fail and its stakeholder value started to fall. Since the company had no funds to increase the value, it only resolved to the acquisition of yet bigger and larger companies. This did not solve...
3 pages (753 words) Essay
Creative Accounting
It has been pointed out that conflicting interests of shareholders and managers often lead to the use of creating accounting. After having successfully assembled the resources, the company is also required to assure all its stakeholders that it is indeed making good use of the resources in a manner benefitting all the stakeholders. In fact creative accounting is done very much within the legal framework and the prevailing accounting standards, but quite often done to camouflage the actual picture. It won't be an exaggeration if we say that creative accounting is done with the help of the...
14 pages (3514 words) Essay
Recruiting creative workforce
To improve quality and effectiveness, the organisations realized that something would have to change. Now the recruiting departments measure how well its recruits subsequently do' Did they turn out well, or did they need remedial help'...
6 pages (1506 words) Essay
creative accounting practices and the unethical auditor
The occurrence of creative accounting practices threatens society’s trust in the profession, and also means lack of the trust in the published financial data and the profession reports that, as a result, make the expectation gap wider between the profession and consumers and interested persons. The auditor’s mistakes in facing the risk of the creative accounting practices, such as discovering and reporting them, leads to very public prosecution, which reduces credibility even more. The auditor is responsible for the risk of the creative accounting practices of the financial...
3 pages (753 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!