FROM CREATIVE ACCOUNTING PRACTICES AND ENRON PHENOMENON TO THE CURRENT FINANCIAL CRISIS

Abstract

The aim of this paper is to bring into attention the creative accounting phenomenon. Typesof creative accounting practices has been examined comparing scandals occurred in large companiesin the last two decades. In order to realize this scope we define the concept of creative accounting andits various forms, and we try to figure the reasons why we came into a financial crisis again, even if thehistory taught us that the risks are very large. We discuss the implication of creative accounting in thecurrent financial crisis because many financial enterprises have sought state support within a shortperiod of receiving unqualified audit opinion. The research method is a deductive one, fundamentaltype that give us the necessary prerequisites for future research. We believe that creative accountingpractices will not disappear unless the causes which have given rise to them will disappear, too.Therefore, although driven by the intention to limit creative accounting, the accounting normalisersmust take into account the circumstances that allow its expression under close supervision.creative accounting, fraud, audit, financial statements.