Abstract
As it is known, Kosovo is a newly established and developing country. Naturally, creative accounting practices in Kosovo are becoming more frequent due to gaps and weaknesses in management and audit quality. This study aims to examine the relationship between creative accounting and corporate performance and management, as well as the impact of managers’ ethics including audit period on financial reporting and creative accounting limitation. The study adopted a survey-based approach. The questionnaires were distributed among 159 managers, auditors, and head accountants. Linear regression was used to analyze the hypotheses. The research results confirmed the rejection of the first hypothesis, as the mean is less than 3 (the average on a five-point Likert scale). The results confirmed that creative accounting has a significant impact on corporate performance. The results also confirmed the second hypothesis as the mean is greater than 3.5 (the average on a five-point Likert scale). Thus, managers’ ethics have a significant effect on the reliability of financial statements. In addition, the research results confirmed the acceptance of the third hypothesis, as the mean is greater than 3 (the average on a five-point Likert scale), thus there is a positive influence of the audit period on creative accounting limitation. The study found a negative impact of creative accounting on corporate performance. Furthermore, a significant effect of managers’ ethics on financial statements’ reliability was concluded; and finally, the findings concluded that audit period and quality could significantly contribute to the creative accounting limitation.
Highlights
This study aims to examine the relationship between creative accounting and corporate performance and management, as well as the impact of managers’ ethics including audit period on financial reporting and creative accounting limitation
The research results confirmed the acceptance of the third hypothesis, as the mean is greater than 3, there is a positive influence of the audit period on creative accounting limitation
The study aimed to estimate the impact of creative accounting on corporate performance and the influence of managers’ ethics and audit period on financial reporting and creative accounting practice
Summary
There are no similar researches on this topic; this study highlights the influence of creative accounting practice on corporate performance and management, and the effects of managers’ ethics and audit period on financial reporting and creative accounting limitation. Signalers are As a result, the present study tests the validity of employees or managers (Hochwater et al, 2007; the following three hypotheses: Ramaswami et al, 2010); receivers are generally investors or shareholders Tell about the indiscernible quality of their firms to possible investors due to the apparent quality H3: The audit period positively influences the of financial statements This theory focuses on limitation of creative accounting.
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