Creative Accounting and Accounting Scandals in the USA

Mulford, Charles W.; Comiskey, Eugene E.

doi:10.1002/9781119208907.ch19

Cited by 25 publications

(31 citation statements)

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“…Previous studies showed the capability to hide some fraudulent practices within creative accounting, which directly impacts the quality of financial reporting [12,55,81]. However, the literature review showed that the determinants of creative accounting could contribute to identifying any fraudulent practices which resulted in a high quality of financial reporting [82][83][84]. However, it has been reported in previous studies that the financial banking sector performs many creative accounting practices which result in a low quality of financial reporting [46,56,85].…”

Section: Discussionmentioning

confidence: 99%

The Moderating Effects of Corporate Social Responsibility on the Relationship between Creative Accounting Determinants and Financial Reporting Quality

et al. 2022

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The banking sector is reflected as an essential element in the structure of any economy that leads to the growth of financial capacity for various individuals, organizations, businesses, and countries worldwide. Accounting activities are shown in the financial reports of banks, while the relevant literature has found that creative accounting highly impacts the quality of financial reporting. However, previous studies indicated the limited impacts of creative accounting determinants on the quality of financial reporting, whereas the phenomenon of financial reporting quality is still on the track of generating renewed research interests. The present research investigated the implications of corporate social responsibility on enhancing the impacts of the determinants of creative accounting and the quality of financial reporting in the context of commercial banks. A deductive research approach driven by a survey questionnaire was used as the research methodology to attain the objectives. Accordingly, purposive sampling was used to collect responses from 364 employees of Iraqi commercial banks (with a response rate of 72.8%). The data were analyzed statistically using the SPSS v.25 and AMOS v.24 software. The results show significant impacts of corporate social responsibility in moderating the relationship between the determinants of creative accounting and financial reporting quality of banks towards competitive advantages.

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Section: Discussionmentioning

confidence: 99%

The Moderating Effects of Corporate Social Responsibility on the Relationship between Creative Accounting Determinants and Financial Reporting Quality

et al. 2022

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“…In contrast, to athletes and movie stars, however, these firms are famous for the wrong reasons. (Mulford and Comiskey, 2011: 46)…”

Section: Research Background: Enron Sagamentioning

confidence: 99%

“…However, it failed and went bankrupt. The auditors were then found guilty of being ineffective (Mulford and Comiskey, 2011). The unexpected collapse of Enron and the surprising demise of Arthur Andersen sent shockwaves through both the business world and the accounting profession (Carnegie and Napier, 2010).…”

Section: Introductionmentioning

confidence: 99%

“…To understand the cartoons, it is essential to be acquainted with key events that surrounded Enron’s demise. ‘In 2000, the company ranked seventh on the Fortune List and generated $100 billion in reported revenue’ (Mulford and Comiskey, 2011: 419). A year later, it was declared bankrupt and the share price had fallen from $90 in mid-2000 to under $1 by the end of 2001.…”

Section: Introductionmentioning

confidence: 99%

“…The plight of Enron’s employees whose retirement savings were embedded in Enron shares and the lack of auditor independence by Arthur Andersen, then one of the world’s largest auditing firms, resulted in the auditing firm being charged with gross dereliction of duty by the press and by members of Congress. The chief financial officer, company chairman and Enron’s former CEO were all found guilty of fraud (Mulford and Comiskey, 2011). As information about the causes of Enron’s collapse unfolded, particularly when combined with the subsequent collapse of WorldCom, another leading US company, there were varying reactions by the press, politicians and the regulatory authorities.…”

Section: Introductionmentioning

confidence: 99%

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Negative accounting stereotype: Enron cartoons

Jones

Stanton

2021

Accounting History

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A sample of editorial cartoons published following the wave of accounting scandals in the United States culminating in the collapse of Enron and the demise of the auditors Arthur Andersen LLP was examined to explore the portrayal of accounting, accountants and auditors. The nature and importance of the cartoons was also investigated. While the examination revealed what cartoonists had to say about accounting, accountants and auditing, the purpose was to ascertain the stereotypes conveyed. The cartoonists working from established preconceptions of accounting and accountants redefined and reshaped accounting stereotypes. They replaced the dull but honest image with a negative one, the fraudulent accountant. However, the image of the male accountant survived. As social critics, the cartoonists focused on the consequences on employees and stockholders but neglected to address the consequences for business institutions.

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Randomized tax deadlines can help economy

Urenda

Kosheleva

2022

AJEB

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PurposeWhile the main purpose of reporting – e.g. reporting for taxes – is to gauge the economic state of a company, the fact that reporting is done at pre-determined dates distorts the reporting results. For example, to create a larger impression of their productivity, companies fire temporary workers before the reporting date and re-hire then right away. The purpose of this study is to decide how to avoid such distortion.Design/methodology/approachThis study aims to come up with a solution which is applicable for all possible reasonable optimality criteria. Thus, a general formalism for describing and analyzing all such criteria is used.FindingsThis study shows that most distortion problems will disappear if the fixed pre-determined reporting dates are replaced with individualized random reporting dates. This study also shows that for all reasonable optimality criteria, the optimal way to assign reporting dates is to do it uniformly.Research limitations/implicationsThis study shows that for all reasonable optimality criteria, the optimal way to assign reporting dates is to do it uniformly.Practical implications It is found that the individualized random tax reporting dates would be beneficial for economy.Social implications It is found that the individualized random tax reporting dates would be beneficial for society as a whole.Originality/valueThis study proposes a new idea of replacing the fixed pre-determining reporting dates with randomized ones. On the informal level, this idea may have been proposed earlier, but what is completely new is our analysis of which randomization of reporting dates is the best for economy: it turns out that under all reasonable optimality criteria, uniform randomization works the best.

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Creative Accounting and Accounting Scandals in the USA

Cited by 25 publications

References 0 publications

The Moderating Effects of Corporate Social Responsibility on the Relationship between Creative Accounting Determinants and Financial Reporting Quality

The Moderating Effects of Corporate Social Responsibility on the Relationship between Creative Accounting Determinants and Financial Reporting Quality

Negative accounting stereotype: Enron cartoons

Randomized tax deadlines can help economy

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