Impact of Creative Accounting Practices on Financial Statements: A Case Study of Palestinian Auditors and Academics

Abstract

This paper presents an initial study considering the impact of creative accounting on financial statements in Palestine to determine the involvement of Palestinian companies in creative accounting and to illustrate how creative accounting affects the financial performance of these companies. This study adopted a descriptive design of the ex-post facto type, with a sample of 100 auditors’ and academics’ perspectives. Questionnaires were sent to a random sample of accounting instructors and auditors in Palestine. The result showed that accountants and academics evaluated the impact of advanced accounting approaches on the reliability of financial reporting to improve its credibility. Both positive and negative consequences may result from using cutting-edge accounting methods. The adverse effects of new accounting systems on financial reporting were researched in this study. The research shows that statutory auditors may play a key role in minimizing the detrimental impact of new accounting systems on the reliability of financial reporting.