The ethics of creative accounting: Some Spanish evidence
Abstract'Creative accounting' involves accountants in making accounting policy choices or manipulating transactions in such a way as to give the impression in the accounts that they prefer. While regarded as unethical by most observers, a defence of creative accounting can be based on the ability of the users of accounts to identify bias in accounting policy choices and make appropriate adjustments. In this paper we take the example of the Barcelona Football Club where the club management made three key accounting policy choices that presented a favourable position, and a supporters' club presented an alternative report choosing three alternative accounting policies that presented an unfavourable position. We presented each of these financial reports to one of two groups of Spanish bank loan offices, with supporting notes making the impact of the accounting policy choices clear. We found that the more favourable set of accounts was significantly more likely to attract a positive response to a loan request. This result undermines the defence for creative accounting, based on the ability of users to identify manipulation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 455.
Date of creation: Mar 2000
Date of revision:
Contact details of provider:
Web page: http://www.econ.upf.edu/
Creative accounting; ethics; Spain;
Find related papers by JEL classification:
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-05-16 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oriol Amat & John Blake & Jack Dowds, 1998. "The ethics of creative accounting," Economics Working Papers 349, Department of Economics and Business, Universitat Pompeu Fabra.
- Merchant, Kenneth A. & Rockness, Joanne, 1994. "The ethics of managing earnings: An empirical investigation," Journal of Accounting and Public Policy, Elsevier, vol. 13(1), pages 79-94.
- Eenkhoorn, P. & Graafland, J.J., 2010. "Lying in Business: Insights from Hannah Arendtâ€™s â€˜Lying in Politicsâ€™," Discussion Paper 2010-75, Tilburg University, Center for Economic Research.
- Graafland, J.J. & Smid, H., 2004.
"Reputation, corporate social responsibility and market regulation,"
20772, University Library of Munich, Germany.
- J.J. Graafland & H. Smid, 2004. "Reputation, Corporate Social Responsibility and Market Regulation," Review of Business and Economics, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, vol. 0(2), pages 271-308.
- Ester Oliveras & Oriol Amat, 2003. "Ethics and creative accounting: Some empirical evidence on accounting for intangibles in Spain," Economics Working Papers 732, Department of Economics and Business, Universitat Pompeu Fabra.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.