Creative compliance in financial reporting

Shah, Atul K.

doi:10.1016/0361-3682(95)00015-2

Cited by 80 publications

(28 citation statements)

References 9 publications

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“…Similar conclusions were reached by Breton and Taffler (1995) who admitted that although creative accounting is a completely legitimate action remaining within the bounds of lawful accounting, it completely contravenes its spirit as, in the financial statements, it paints a picture of the business entity which is inconsistent with facts and does so under the guise of good faith. The same conclusions were reached by Shah (1996), who said that a situation in which the company's management uses a loophole in the law and the duality of interpretation in order to create its own picture of the company's situation will be called creative accounting. At the same time, in his bid to define creative accounting, Edwards (1989, p. 11) used a sleek phrase: "creative accounting is simply the most recent manifestation of a persistent conflict between management and the reporting accountant".…”

Section: Introduction Of the Term "Creative Accounting" Into The Leximentioning

confidence: 54%

Definitions, Perception and Functioning of Creative Accounting in the Theory and Practice of Different Languages, Countries and Parts of the World

Hołda¹,

Staszel²

2016

CUBR

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This paper aims to show how the concept of creative accounting is defined and how it operates in the literature of different countries and further how it is perceived by the public. It presents the authors' detailed analysis of professional accounting literature from all over the world in order to find information about how the concept of creative accounting functions and how it is defined in different countries and parts of the world. It should be noted that although numerous authors presented different definitions of creative accounting in their publications, they, unlike the authors of this paper, did not carry out studies which would comprehensively collate definitions of creative accounting from different countries. The methodology employed involves a critical review of relevant literature originating in several dozen countries. The authors have also verified how the concept of creative accounting functions on the Internet. The study was conducted between November 2014 and July 2015. The results show that, depending on the region, creative accounting can be perceived as a positive phenomenon (e.g. in Central and Eastern Europe), a neutral one (e.g. in South America), or it may be directly associated with financial statement fraud (mostly in German and English-speaking countries). The manner in which theoreticians conceive creative accounting impacts the overall shape of financial reporting: the scope of freedom available to accountants and opportunities to implement the principle of true and fair view. Understanding of the concept of the creative accounting leads to understanding of the essence of accounting. It is not a trivial matter since it is the information provided by accounting and presented in financial reports that is the foundation of many economic decisions.Keywords: creative accounting, fraudulent financial statements, accounting principles, accounting policy, accounting regulation, accounting rules IntroductionCreative accounting is a household name featured heavily in daily press and on television, mostly in the context of financial scandals, both locally and globally recognised (Enron, Worldcom, and Parmalat), as well as in relation to deficit and sovereign debt manipulation. Colloquially, it is often perceived as a magic tool, * Project supported: This publication was funded out of the financial resources of the Polish Ministry of Science and Higher which-in a manner which is within the bounds of law and consistent with it-helps to portray companies' finance in a better light. The term "creative accounting" has become so popular that it is often cited not only for the world of finance, but also in other contexts as a metaphorical, cute term for something that is an illusion, a misrepresentation, or a clever deception. It has even entered soccer commentators' jargon to refer to induced fouls on the opponent. The paper aims to present large scale research on creative accounting, as conducted in different parts of the world, and to offer a collection of definitions of creative accounting as de...

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Section: Introduction Of the Term "Creative Accounting" Into The Leximentioning

confidence: 54%

Definitions, Perception and Functioning of Creative Accounting in the Theory and Practice of Different Languages, Countries and Parts of the World

Hołda¹,

Staszel²

2016

CUBR

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“…Japanese regulators preemptively complied with the international regulatory standardization by manipulating the definition of bank capital with the help of accounting institutional resources. This episode suggests that the issue of creative compliance in the era of global standardization goes beyond the regulator-regulatee juxtaposition often assumed in the literature (McBarnet & Whelan, 1991, 1992aShah, 1996Shah, , 1997Shah, , 1998. The boundary between regulators and regulatees becomes blurred as sheer complexity of regulatory processes encourages more autonomous self-regulation (Miller & Power, 1992, pp.…”

Section: Discussionmentioning

confidence: 95%

The role of accounting in bank regulation on the eve of japan’s financial crisis: a failure of the new capital adequacy regulation

Sawabe

2002

Critical Perspectives on Accounting

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“…Doxic practices are often inscribed within codes of practice and rules, such as within the fields of tax and accounting. These create opportunities for actors to engage in gamesmanship (or discretionary enactment), at the intersecting boundaries, in an attempt to impose particular doxic logic, and hence influence doxic practice, within a field (Shah, 1995).…”

Section: The Tax Fieldmentioning

confidence: 99%

“…Without denying the value of this prior literature, it focuses largely on external influences on tax avoidance practice and largely omits consideration of the often subtle, diffuse and unconscious relational influences that underpin it and its regulation. a failure to comply with the spirit of the law (Shah, 1995). These destabilise the location of the boundary since its position varies depending on the position of the viewer.…”

Section: The Tax Fieldmentioning

confidence: 99%

Boundary work and tax regulation: A Bourdieusian view

Gracia

Oats

2012

Accounting, Organizations and Society

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Boundaries are ubiquitous in modern social life, and the work of creating and maintaining boundaries is particularly evident within regulatory fields. Through the analysis of a recent critical incident in the tax field (Arctic Systems) with which the accounting profession is intimately associated, this paper uses a Bourdieusian lens to unravel the relational complexities of the regulation of tax avoidance at the complex and fuzzy boundary between acceptable and unacceptable tax practice. We develop an alternative, relational interpretation of tax regulation and contribute to a more nuanced understanding of regulatory practice within the tax field that also raises questions about regulatory practice more widely. We conclude by highlighting how a move towards 'relational' regulation might contribute to improved understanding of regulatory processes and practices.

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Creative compliance in financial reporting

Cited by 80 publications

References 9 publications

Definitions, Perception and Functioning of Creative Accounting in the Theory and Practice of Different Languages, Countries and Parts of the World

Definitions, Perception and Functioning of Creative Accounting in the Theory and Practice of Different Languages, Countries and Parts of the World

The role of accounting in bank regulation on the eve of japan’s financial crisis: a failure of the new capital adequacy regulation

Boundary work and tax regulation: A Bourdieusian view

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