Find and Prevent Creative Accounting 发现和防止创造性会计
Accounting is one of the most important science in the business world. Accounting is always needed in the company, both small companies and large companies require their accounting processes. With the existence of science of accounting, the financial bookkeeping easier and more accurate, and can assess the performance of the company. However, in reality a lot of financial accounting that does not comply with the existing financial. This happens because the mistake of making the financial statements or any fraud committed by certain parties.
In conducting the preparation of financial statements, an accountant must follow the rules that exist in financial reporting, which is in accordance with the rules applicable accounting standards. However, in reality many companies that creatively manipulating financial data to get a good response from some. This is called creative accounting. Creative accounting is nothing new in the world of accounting, because many companies are doing it.
Creative accounting by some circles is considered unethical for manipulating data. However, creative accounting in view of the positive accounting theory, all the creative accounting does not contradict to the principles of accounting generally acceptable no matter who should be disputed.
Many factors might cause companies use creative accounting to maintain the company’s existence middle of very intense competition today. Therefore we need creative ways in financial accounting in the business world, although it is often considered the less ethical. The fact is in line with the opinion of Brass et.al. (1998) which states that unethical behavior is caused by two major factors, namely the individual factors and organizational factors. Individual factors for example consists of locus of control and moral cognitive development. While such organizational factors consist of organizational climate, compensation systems, codes of conduct and norms.
Definition of Creative Accounting 创造性会计的定义
Experts define creative accounting as an activity of manipulating financial data on companies. Etymologically, the words of creative accounting consist of two words, namely creative of skill which means it someone invents a new idea that is effective, and an accounting term that means the bookkeeping about financial events are always trying to faithful representation of financial events. Creative accounting by Amat, Blake and Dowd (1999) is a process where some of the parties to use the ability of understanding includes knowledge of accounting standards, the techniques used by the company and use it to manipulate financial reporting. While, Stolowy and Breton (2000) called creative accounting is a part of the accounting manipulation, which consists of earnings management, income smoothing and creative accounting itself.
So that the meaning of creative accounting that is the root of a number of accounting scandals, and many proposals for accounting reform usually centers on an updated analysis of capital and production factors that really will reflect how the added value. Creative accounting and earnings management is