Society of African Journal Editors

Kogi Journal of Management


Authors: Elaigwu Moses; Audu Friday & Abdullahi S. R.

Journal: Kogi Journal of Management

Creative accounting practices are becoming common and blamed on the short-comings of corporate governance in Nigerian corporate organizations. This blame cut across several important groups such as the accountants, managers, auditors, and others, in perpetrating earnings management. Accountants use strategies that encourage creative accounting leading to corporate scandals and collapse both international and locally as in the case of Enron, Worldcom, Tyco, Freddie Mac, Lehman Brothers, Bernie Madoff Satyam, Cadbury and the failure of most banks. The research is an empirical study of creative accounting practices in the Nigerian corporate organizations. To achieve the aim of this study, managers and accountants of commercial banks constitute the population of the study. A survey method of research design was adopted. The data collected were analyzed using mean scores and the stated hypotheses tested with Z-test. The findings of the study among others are that, creative accounting practices have a significant effect on corporate failures in Nigeria and that the major reason for creative accounting in Nigerian corporate organizations is to boost the market value of shares. The study recommends among others that creative accounting should be taken seriously as a criminal offense by accounting bodies, the judiciary and the government regulatory authorities to put a stop to creative accounting practice considering the consequences on the reputation of the accounting profession, corporate failures and the loss of public confidence in the Nigerian financial reporting process.