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From Creative Accounting Practices And Enron Phenomenon To The Current Financial Crisis

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  • Dana Simona Gherai
  • Diana Elisabeta Balaciu

Abstract

The aim of this paper is to bring into attention the creative accounting phenomenon. Types of creative accounting practices has been examined comparing scandals occurred in large companies in the last two decades. In order to realize this scope we define the concept of creative accounting and its various forms, and we try to figure the reasons why we came into a financial crisis again, even if the history taught us that the risks are very large. We discuss the implication of creative accounting in the current financial crisis because many financial enterprises have sought state support within a short period of receiving unqualified audit opinion. The research method is a deductive one, fundamental type that give us the necessary prerequisites for future research. We believe that creative accounting practices will not disappear unless the causes which have given rise to them will disappear, too. Therefore, although driven by the intention to limit creative accounting, the accounting normalisers must take into account the circumstances that allow its expression under close supervision.

Suggested Citation

  • Dana Simona Gherai & Diana Elisabeta Balaciu, 2011. "From Creative Accounting Practices And Enron Phenomenon To The Current Financial Crisis," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(13), pages 1-3.
    • Handle: RePEc:alu:journl:v:1:y:2011:i:13:p:3
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    References listed on IDEAS

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    1. Higson, Chris, 2001. "Intangibles: Management, Measurement, and Reporting: by Baruch Lev, Washington, DC, Brookings Institution Press, 2001, pp. viii+216," The International Journal of Accounting, Elsevier, vol. 36(4), pages 501-503, 012.
    2. Low, Mary & Davey, Howard & Hooper, Keith, 2008. "Accounting scandals, ethical dilemmas and educational challenges," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 19(2), pages 222-254.
    3. Omurgonulsen, Mine & Omurgonulsen, Ugur, 2009. "Critical thinking about creative accounting in the face of a recent scandal in the Turkish banking sector," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(5), pages 651-673.
    4. Sikka, Prem, 2009. "Financial crisis and the silence of the auditors," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 868-873, August.
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    Cited by:

    1. Ndebugri, Haruna & Tweneboah Senzu, Emmanuel, 2017. "Analyzing the critical effects of creative accounting practices in the corporate sector of Ghana," MPRA Paper 81113, University Library of Munich, Germany, revised 04 Sep 2017.
    2. Ahmed Yousif Adam Ismael, 2017. "The Impact of Creative Accounting Techniques on the Reliability of Financial Reporting with Particular Reference to Saudi Auditors and Academics," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 283-291.
    3. Fizza Tassadaq & Qaisar Ali Malik, 2015. "Creative Accounting and Financial Reporting: Model Development and Empirical Testing," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 544-551.
    4. Tha’er Amjed Mahmoud Ababneh & Mehmet Aga, 2019. "The Impact of Sustainable Financial Data Governance, Political Connections, and Creative Accounting Practices on Organizational Outcomes," Sustainability, MDPI, vol. 11(20), pages 1-16, October.

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    More about this item

    Keywords

    creative accounting; fraud; audit; financial statements.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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