Creative accounting . This term is used to describe the process by which accountants and advisors use their knowledge about accounting standards to make up the figures reflected in the company's accounting, while still complying with accounting principles. In this way, as criteria or other aspects of accounting are applied, the results may vary and be more favorable to organizations. Rise school is Best School of Accountancy in Lahore.CA admissions in Lahore now open. The best School of Accountancy in Pakistan offers CA in Lahore and Best CA in Pakistan. Enron, World Com and others are some cases of creative accounting (euphemism for fraud with numbers) that have appeared in recent times, have had a great impact on the American economy, to the point that markets have lost confidence in the Generally accepted accounting principles , in auditors, advisors and even in investment analysts; Who recommend buying this or that stock, earn good commissions and leave thousan...
In recent times and as a consequence of the financial crisis that has affected large international companies, creative accounting has become particularly relevant, questioning the data presented, as well as the credibility of auditors and advisors. Discussions about the reasons that have led some companies to implement creative accounting have focused primarily on the impact they can have on the decisions of investors on the Stock Exchange as they have used "accounting tricks" to deceive To investors. Among the reasons that have the managers of the companies that list their shares, to try to manipulate the accounts through the use of creative accounting, the following stand out: Companies generally prefer to reflect a stable trend in earnings growth, rather than showing volatile profits with dramatic series of ups and downs. It can help to maintain or "increase" the stock price, both by reducing apparent levels of indebtedness, and thus making t...