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Creative Accounting Impact On The Economic Entity'S Patrimonial And Financial Situation. Case Study

Author

Listed:
  • Ion CUCUI

    (”Valahia” University of Targoviste, Romania)

  • Silviu Constantin NASTASIA

    (”Valahia” University of Targoviste, Romania)

Abstract

This paper empirically addresses the issue of creative accounting in financial reporting, focusing on how it influences the quality of financial statements prepared and reported by economic entities. Creative accounting cannot be automatically classified as legal or illegal, in the absence of an in-depth analysis, but is negatively correlated with the approach of managers or professional accountants to manipulate accounting data to achieve certain objectives or meet certain financial indicators relevant to third parties. The data were collected from open sources, from databases available to the general public, for the study being selected an economic entity based on certain representative criteria, such as economic size, business segment or history. The study revealed that, based on the analysis of the financial statements prepared by the economic entity for a period of two consecutive years, were highlighted elements that suggest a use of imaginative accounting, being likely to mislead stakeholders about the performances registered.

Suggested Citation

  • Ion CUCUI & Silviu Constantin NASTASIA, 2020. "Creative Accounting Impact On The Economic Entity'S Patrimonial And Financial Situation. Case Study," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(2), pages 142-155.
    • Handle: RePEc:brc:brccej:v:5:y:2020:i:2:p:142-155
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    More about this item

    Keywords

    Creative accounting; corporate governance; result management; ethics;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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