Considerations on Creative Accounting

Author:Rodica BĂLĂŞOIU, Ph. D. Student

JEL:M41

DOI:

Keywords:creative accounting, accounting policies, accounting choice, creativity

Abstract:
Creative accounting has always existed, but in the recent known cases (Enron, WorldCom, Xeron in the United States, Vivendi, Parmalat, Lernout & Hauspie in Europe, Livedor in Japan, Inverlink in Chile) it took a large spin by the consequences and damage that have prejudiced most of the stakeholders of the concerned entities, to which is added the effect upon the users’ confidence in the accounting information and the capital market in general.\r\nThese scandals include various echelons of responsibility and conflict of interests between boards of directors and shareholders, between shareholders and managers, between entities and audit offices, being stated the question of impartiality and independence of each actor.\r\nThe World Bank has supported and continues to do so, the application of international accounting standards in most countries of the world, the IASB allowing the reduction of differences between the accounting standards and rules used in the world, leading to the concept of "accounting globalization". However, the problem of creativity remains the same, due to the fact that, what is obtained by applying IASB rules is to improve the comparability of accounting information, while the area of ​​freedom, which is prolific for creative accounting, continues to exist.\r\n

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