Uncovering Creative Accounting

Creative accounting is nothing new. It has been a temptation and a problem from the moment that accounting principles were first used to report on business performance. This book provides an overview of the judgement areas involved in accounting, and the ways in which financial results can be manipulated by managers and accountants who desire a particular outcome.

The recent scandals over financial reporting have brought creative accounting into the public domain, making it more apparent to those involved in business that accounting is an inexact science. World leaders have joined the debate, making it clear that management have a legal and moral responsibility for producing meaningful information for their stakeholders. However, uncertainty and grey areas in accounting, have made managers fearful of the implications and unclear as to what they can and should do to fulfil their responsibilities to stakeholders and the community.

This book examines the key issues surrounding creative accounting and will help managers to understand the different areas of judgement and the responsibilities of the different parties involved including shareholders, directors, managers and auditors. It also highlights key issues in the current debate, and examines why so many companies are having problems and why the controls in the US seem to be less effective than those in Western Europe.