Definitions, Perception and Functioning of Creative Accounting in the Theory and Practice of Different Languages, Countries and Parts of the World
This paper aims to show how the concept of creative accounting is defined and how it operates in the literature of different countries and further how it is perceived by the public. It presents the authors' detailed analysis of professional accounting literature from all over the world in order to find information about how the concept of creative accounting functions and how it is defined in different countries and parts of the world. It should be noted that although numerous authors presented different definitions of creative accounting in their publications, they, unlike the authors of this paper, did not carry out studies which would comprehensively collate definitions of creative accounting from different countries. The methodology employed involves a critical review of relevant literature originating in several dozen countries. The authors have also verified how the concept of creative accounting functions on the Internet. The study was conducted between November 2014 and July 2015. The results show that, depending on the region, creative accounting can be perceived as a positive phenomenon (e.g. in Central and Eastern Europe) a neutral one (e.g. in South America) or it may be directly associated with financial statement fraud (mostly in German and English speaking countries) The manner in which theoreticians conceive creative accounting impacts the overall shape of financial reporting: the scope of freedom available to accountants and opportunities to implement the principle of true and fair view. Understanding of the concept of the creative accounting leads to understanding of the essence of accounting. It is not a trivial matter since it is the information provided by accounting and presented in financial reports that is the foundation of many economic decisions.