The Impact of Creative Accounting on the Probability of Fraud in the Companies Accepted in the Tehran Stock Exchange

Abstract

Accountants use the accounting knowledge to manipulate the accounting figures and convert those figures to what the management wants. Because directors have direct and indirect benefits in financial statements. This may be the motivation for fraud and manipulation of the financial statements by the executives, and as a result, managers want to mislead the users of the financial statements and this is a creative accounting. The purpose of this study is to investigate the effect of creative accounting and fraud probability that is measured by Bhasin model. At the level of companies accepted in Tehran stock exchange for the period of 2011-2015, for checking the validity of the hypotheses, the logistic regression test are Used. The results of this study indicate that there is a significant relationship between profit smoothing and the probability of fraud, which means that fraudulent companies tend to be more likely to smooth profits than non-fraudulent companies, which can be said today, profit smoothing is one of the new fraud methods. Another aspect of this research is the lack of a significant relationship between external financing and fraud probability.