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Qualitative Study Regarding The Relationship Between Corporate Governance And Creative Accounting

Author

Listed:
  • Berinde Sorin

    (Universitatea Babes Bolyai, Facultatea de Business)

  • Rachisan Paula Ramona

    (Universitatea Babes Bolyai, Facultatea de Business)

  • Grosanu Adrian

    (Universitatea Babes Bolyai, Facultatea de Stiinte Economice si Gestiunea Afacerilor)

Abstract

The concept of corporate governance has come into the spotlight after the big accounting scandals. Corporate governance represents the manner in which a company is managed and controlled, and this aspect is closely related to the creative accounting practice; ownership structure, the board of directors'(tm) structure, the frequency of these bodies'(tm) meetings, they all can encourage but also discourage accounting manipulation. We tend to agree with the authors who claim that certain changes within the company '" including the structure of certain departments '" and a rigorous control can significantly reduce the use of creative accounting techniques. Concerning the main objective, respectively outlining a clear image of corporate governance starting from creative accounting, in order to achieve it we conducted a qualitative study, we decided to analyze one of the main research directions, namely corporate governance, as we considered it a current issue with great impact on creative accounting.Our study is based on corporate governance seen as a possible solution to reduce creative accounting practices We used as research method the content analysis which developed in three stages, namely: pre-analysis, content exploitation, respectively processing and interpretation of results. Moreover, when conducting this qualitative study, we use both quantitative and qualitative analysis, using external observation (non-participant) method in collecting the necessary data. We also used the comparative method by studying the main lines of research in different periods (1990-2010). These studies refer to creative accounting techniques, to conflicts of interest between managers, directors and shareholders, to joint ownership and control rights, to the lack of transparency regarding financial reporting and auditors'(tm) independence '" as evaluators of the financial and accounting information. Not all research directions have been sufficiently explored; therefore, in the future the researches must be continued and deepened. We consider that a number of independent outside directors within the board could contribute to a better monitoring of the management team, leading to a lower possibility for the company to use creative accounting practices compared to the situation in which the board would be formed mainly from inside director.

Suggested Citation

  • Berinde Sorin & Rachisan Paula Ramona & Grosanu Adrian, 2012. "Qualitative Study Regarding The Relationship Between Corporate Governance And Creative Accounting," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 642-647, December.
    • Handle: RePEc:ora:journl:v:1:y:2012:i:2:p:642-647
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    References listed on IDEAS

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    6. repec:dau:papers:123456789/1373 is not listed on IDEAS
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    Cited by:

    1. 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.
    2. 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.
    3. 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.

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    More about this item

    Keywords

    corporate governance; creative accounting; qualitative study; empirical study; theoretical study;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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