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WORKING PAPER ETHICS AND CREATIVE ACCOUNTING: SOME EMPIRICAL EVIDENCE ON ACCOUNTING FOR INTANGIBLES IN SPAIN

By Ester Oliveras and Oriol Amat

Abstract

Recent research shows that financial reports are losing relevance. Mainly this is due to the growing strategic importance of intangible assets in the performance of a company. A possible solution is to modify accounting standards so that statements include more selfgenerated intangible assets, taking into account with their inherent risk and difficulty of valuation. We surveyed loan officers who were asked to assess the credit-worthiness of a hypothetical company. The only information given was a simplified version of financial statements. Half the group got statements where research and development costs had been capitalized. The other half got statements in which these costs had been treated as an expense. The findings show that capitalization was significantly more likely to attract a positive response to a loan request. The paper raises the question of whether accounting for intangibles might provide managers with one more creative accounting technique and, in consequence, its ethical implications

Topics: intellectual capital, ethics, creative accounting. Journal of Economic Literature Classifications, M41
Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.198.4322
Provided by: CiteSeerX
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