Ways of Detection of Creative Accounting in a Global Economy

Lenka Hrosova

doi:10.1051/shsconf/202112903012

Abstract

Research background: Any entity operating in a global economic environment is required to conduct an accounting agenda in such a way that its financial statements are prepared in a clear, comprehensible manner and adhere to the accounting principle of fair and true presentation of accounting facts as it serves as a source of information for internal and other external entities using this information in its economic decision-making. It is the principle of accurate and true presentation of accounting information that plays an important role in the field of creative accounting, in which the accounting data is adjusted or manipulated to the desired form. Purpose of the article: The main goal of this paper is to point out the issue of creative accounting and the possibility of its detection using selected models. Methods: The methodological part is focused on the application of the Beneish model and CFEBT model assuming the use of creative techniques in the period 2016-2020. Findings & Value added: The summary of the results of the analysis thus points to the use of creative accounting in a given accounting entity according to the Beneish model and CFEBT model, but this accounting entity, despite its use, did not violate the principle of a true and fair representation of the accounting reality.

Highlights

Each entity in the global business environment should conduct an accounting agenda (Ayu et al, 2020) by the accounting principles (Savova, 2021) and principles arising from the laws of that country
It is the principle of accurate and true presentation of accounting information that plays an important role in the field of creative accounting (Blazek et al, 2020), in which the accounting data is adjusted or manipulated to the desired form (Grofcikova, 2020)
Based on the individual values of both indicators, the results of the CFEBT model measuring the risk of manipulation with accounting data for the observed period 2016-2020 point to an increased risk of manipulation

Summary

Introduction

Each entity in the global business environment should conduct an accounting agenda (Ayu et al, 2020) by the accounting principles (Savova, 2021) and principles arising from the laws of that country It is the principle of accurate and true presentation of accounting information that plays an important role in the field of creative accounting (Blazek et al, 2020), in which the accounting data is adjusted or manipulated to the desired form (Grofcikova, 2020). The economic results that enterprises report are based on appropriate, adjusted, or changed data These practices used in reporting business operations or performance are considered creative accounting. Within the issue of creative accounting, it is important to understand the meaning of this term in the territory of individual countries of the world, depending on their legislative and regulatory framework

Objectives

Methods

Results

Conclusion