Creative Accounting: Motives, Techniques and Preventive Measures

AFRAG021

Creative Accounting: Motives, Techniques and Preventive Measures

*Adamu Umar

** Prof. Kabiru Isa Dandago

***Khadija Salihu Abubakar

**Postgraduate Student, Department of Accounting, Bayero University Kano Tel.: 08036030987. E-mail:

adamscikingida@gmail.com

**Department of Accounting, Bayero University Kano. Tel: 08023360386 E- mail: kidandago@gmail.com

***Department of Accounting, Al-Qalam University Katsina. Tel.: 07032202224. E- mail: kkurah@yahoo.com

Abstract

Creative accounting has been globally acclaimed to be a veritable tool in the hand of managers for manipulation of accounting information. This paper examines the concept of creative accounting, its various techniques and possible preventive measures. Several literatures have been reviewed and acknowledged on the concept of creative accounting. The study utilizes Library research design. Literatures reveal that creative accounting has no generally accepted definition. However, there is consensus as regards to the relationship between creative accounting and fraud. The study discovers that personal interest, market expectations and special circumstances are the motivating factors of creative accounting. It further reveals that extra ordinary items, off-balance sheet financing and flexibility of accounting standards are the major techniques used for creative accounting. The study concludes that creative accounting causes serious challenges to the accounting profession. The study recommends that good governance mechanisms should be observed on the basis of compliance with accounting standards, corporate governance codes and ethical codes of the accounting profession.

Keywords: Accounting, Creative, Ethics, Fraud, Governance, Manipulations.

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