ACCOUNTING

Critical Analysis



Critical Analysis

Introduction

Creative accounting refers to the practices of manipulating the accounting numbers for the purpose of over estimating and under estimating the earnings. The agency conflict arises when the acts and decisions of management comes in conflict with the interest of the share holders (Merchant, 1994, 79-94).

Summary

This article discusses the nature of the creative accounting practices along with the ethical issues faced by the accountants in this field. It explains several concepts including agency conflict, creative accounting and the motivations for the management to involve in such practices. It elaborates on the results of some of the empirical ...