Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


Creative Accounting Applications, Opportunistic Behavior, and Integrity of Accounting Information System: The Case of Iraq

Author(s): Haider Abdulhussein, Hameed AL Mustawfiy AL-Mustansiriyah

 The accounting information shown in the financial reports is supposed to mirror the actual image of the company's activities. It works for a specific period to evaluate the company's status and judge the soundness of its financial performance so that all relevant parties can make rational decisions regarding investment, sale, and lending, and that The decision-maker needs honest and not shaded information to make the right decision, and here comes the role of accounting in providing the necessary information to the beneficiary of this information In the past, accountants violated accounting principles and standards when preparing financial statements, and this is called accounting fraud. As for the present time, and despite their commitment to accounting principles and standards, they continued to control the number of profits declared, so they wanted to increase or reduce profits. They were able to do so by using specific accounting policies. The so-called Creative Accounting: There is no doubt about the profound impact of the accounting and auditing profession on the global economy. The issue is no longer just a presentation of financial statements. But instead, the integrity of the economic system and its institutions' efficiency means that creative accounting can provide dishonest data that contributes to misleading the decision-maker. The accountant's policy practice Accounting enables him to manipulate the number of profits accrued. In Iraq, companies of all kinds are a new idea for society, not to mention the weak awareness about the financial statements and the methods of preparing them, making it easier for the accountant in Iraq to practice the creative accounting that he desires. Therefore, the research problem can be formulated with the following question: Does creative accounting contribute and mislead decision-making in Iraqi commercial companies?

The importance of the research stems from the fact that it deals directly with the relationship between the accountant and his methods that overshadow the vision of the administration, as well as his measure of the ability of users of financial statements to disclose legal accounting manipulation that has been launched on creative accounting. Hence, it highlights this type of manipulation and alerts users of lists. The financial report on its existence through disclosure of creative accounting and the identification of disposal procedures for their application in Iraqi commercial companies listed on the Iraq Stock Exchange. The results reached by the research, including the need for investors in the Iraqi market for securities to be aware of the implications of using creative accounting on the overall financial statements and that the effect moves from one item to another in it. The lack of qualified and trained human resources in Iraq to limit creative accounting practices and the need to activate regulation The professional profession of accounting and auditing in Iraq and developing the accounting culture for users of information and financial lists and combating creative accounting practices in Iraqi commercial companies. 

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