Creative Accounting

Creative score: Nature , Incidence and Ethical Issues

Keywords : Accounting ethics, fanciful account ing, earnings management, financial reporting. Journal of frugal Literature classification: M41.

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Abstract

This paper explores the nature and incidence of productive be practices within the context of ethical considerations.. It explores several(prenominal) definitions of imaginative accounting and the potential and the range of reasons for a companys directors to engage in creative accounting. Later the paper considers the various ways in which creative accounting can be undertaken and summarizes some falsifiable research on the nature and incidence of creative accounting. The ethical dimension of creative accounting is discussed, drawing evidence from several empirical studies. The paper concludes with the analysis of possible solutions for the creative accounting problem.

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Creative accounting: nature, incidence and ethical issues

Introduction

According to histrionics theory the firm is a legal fiction which serves as a focus for a complex process in which the conflicting objectives of individuals… are brought into equilibrium within a cloth of contractual relations. (Jensen and Meckling, 1976).



Within the authorisation framework, it is both logical and unavoidable that management deportment will be self-serving. Agency can, therefore, brook a solid framework for the understanding of creative accounting behaviour. However, it may provide an incomplete theoretical basis for explaining or predicting management behaviour; the ethical dimension of human behaviour may provide an important element missing from legalistic and adversarial agency relationships (Horrigan, 1987). The informational perspective (Schipper, 1989) is a key element underpinning the study of the creative accounting phenomenon. A conflict is created by the information dissymmetry that exists in complex corporate structures between a permit manage ment and a more remote body of...If you postulate to get a full essay, order it on our website: Orderessay



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