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Hi, I need help with essay on The prevalence of creative accounting in the corporate world is as a result of deficiencies in the legal systems for banking and accounting, inadequacies in the autonomy
Hi, I need help with essay on The prevalence of creative accounting in the corporate world is as a result of deficiencies in the legal systems for banking and accounting, inadequacies in the autonomy of governmental regulation and supervision bodies, practical difficulties in enforcin. Paper must be at least 3250 words. Please, no plagiarized work!
The third way is by “structuring transations in such a way as to manipulate the results in the financial statements.” An example of this is selling an asset that is artificially depress or boosted. The fourth way that creative accounting can arise is by “timing genuine transactions to as to manipulate accounting.
” An example of this is an investment with a cost of f1 million with a market value of f3 million, this profit can be realised in any year of the managers choice. (Oliveras &. Amat p. 8). Moreover, hybrid securities can be a source os creative accounting, as these securities combine features of assets and debts, and, although they are better classified as debt than equity, they are often reported as equity on balance sheet, which “creates illusions in financial statements.” (Carlin et al. p. 44). Unfortunately, auditors sometimes allow creative accounting because of the “relevance and reliability...of reported information.” (Rabin p. 67).
