Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Perceptions and Views of Financial Managers and Auditors on Creative Accounting Practices, Motives, and Impact on Financial Reporting Quality: Evidence from Jordan

Author(s): Mohammad Aldahiyat, Ahmad Dahiyat, Shafeq Al Abed, Bassam Jaara, Abeer Sarayreh

This study aims to investigate the perception and views of auditors and financial managers in Jordan regarding creative accounting practices, motives, preventive measures, and impact on the quality of accounting information. The study utilized a survey methodology using questionnaires for data collection. One hundred and seventy (170) questionnaires were distributed to the sample of the study of which one hundred and forty-five (145) questionnaires were returned and analyzed. The results of study revealed that creative accounting in its various forms, whether it complied with accounting standards or not, affects the quality of the accounting information. In addition, the most used practice of creative accounting is controlling the construction or reduction of the provisions and reserves such as the provision of bad debts to increase or decrease expenses and revenues. Meanwhile, gaining tax benefits is the most important motive for creative accounting practices. Also, the study revealed that the most important mean for limiting creative accounting practices was activating the role of auditing profession and related regulatory legislation governing their work in order to enhance their independence and professional competence.

Finally, and based on these findings, the study provided a number of recommendations that would hopefully assist legislators, auditors and accountants in curbing creative accounting practices and improving the quality of accounting information in the Jordanian business environment.

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