Creative Accounting Techniques, Methods for Detection and Prevention
Creative Accounting Techniques, Methods for Detection and Prevention

Author(s): Ivan Gudev
Subject(s): Economy, Business Economy / Management, Accounting - Business Administration
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: creative accounting; accounting manipulation; detection; prevention
Summary/Abstract: This paper aims to investigate the most widely used techniques for creative accounting, methods for detection of those techniques and ways of prevention of such practices. The focus of this paper will be on the earnings manipulation. Comparative analysis will be carried out to identify the most widely used methods of detection of such practices in order to facilitate users in detecting those practices. In today’s global business environment, the competition is increasing on a daily basis and every company is pushed to present its’ financial figures in a favorable way, so it looks good in the eyes of the clients, investors, vendors, banks and other stakeholders. This is the reason why more and more managers are looking for alternative ways to present company’s financial information even though it could not be the most appropriate way. We will investigate the most reliable methods to detect creative accounting techniques and the role of auditors in detecting such practices will be discussed too. Recommendations are given how to deal with the problem of creative accounting. Methods used in this study are the deductive reasoning, abstract reasoning and literature analysis.

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