The Practice of Creative Accounting on the Jordanian Banking Sector: A Case Study in the Northern Region

Transcription

1 Australian Academy of Accounting and Finance Review (AAAFR) ISSN (Online) ISSN (Print) The Practice of Creative Accounting on the Jordanian Banking Sector: A Case Study in the Northern Region Firas A. N. Al-Dalabih Department of Accountancy, Irbid National University, Jordan Abstract This study aims to identify the practice of creative accounting on the Jordanian banking sector. The sample of this study comprised 150 selected from three banks in the northern region of Jordan. These banks are Cairo Amman Bank, Arab Bank, and Jordan Bank, whereas a questionnaire survey was designed and distributed to them. A total of 121 questionnaires were retrieved that are valid for statistical analysis formed about 80.7% of overall distributed questionnaires; and the questionnaires have been analyzed using SPSS statistical software. The results of the study indicate that there is a statistical significant relationship between the practice of creative accounting and both the profitability and the size of the Jordanian commercial banks. This study recommended the Jordanian commercial banks to protect their profitability through different policy instead of practice creative accounting. Keywords: Creative Accounting; Jordanian Commercial Bank; Profitability; Size 1. Introduction Accounting manipulation creates when the managers try to mislead the financial information of the organization to change the performance according to their benefits (Diana and Madalina, 2008). The term creative accounting is considered as deceptive accounting, it is widely used to describe the accounting techniques that allow corporations to report inaccurate financial results of their business activities (Akenbor and Ibanichuka, 2012). In view of the prevailing conditions in the business world and the recourse of many departments of companies to improve the financial situation in terms of profitability or in terms of financial position to achieve self-objectives, these departments resort to use the methods of creative accounting through the variety of accounting alternatives that can be relied on in the preparation published financial statements, which adversely affect the validity of those statements. Due to the seriousness of this phenomenon, especially in banks as a main aspect in the financial institutions because of dealing with depositors funds and a very large financial leverage due to the large size of deposits compared to their capital, it is necessary to give the subject great importance in the bank sector to determine the extent to which banks are practice creative accounting and profit management. Hence, this study came to examine the practice of creative accounting on the Jordanian banking sector Statement of problem Some companies, through their management, owners, or stakeholders, resort to practice certain methods of creative accounting to achieve personal goals by influencing profitability data or financial Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July

2 position, in general, to appear in a manner consistent with their illegal purposes. Therefore, it will reflect negatively on the credibility of data and reliability of the users for financial statements, both those who were outside the company or within, and thus the collapse of that company in the money market by declaring bankruptcy, or involvement in legal cases. Based on the above, this study attempts to find answers to the following questions: 1. What are the motives behind the practice of creative accounting in the Jordanian commercial banks? 2. Is there a relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks? 3. Is there a relationship between the practice of creative accounting and the size of the Jordanian commercial banks? 4. What are the procedures that can help in curb the practice of creative accounting in the Jordanian commercial banks? 1.2. Importance of the study As a result of the existence of many accountants and auditors who have the ability to innovate and manipulate the accounting numbers under their responsibility, this leads to an increase in the phenomenon of creative accounting, which ignores transparency in the disclosure of financial statements and credibility in the presentation of financial statements, which necessitates finding reasons for such phenomenon and propose possible solutions to reduce them and to adjust the ethics of the accounting profession. The importance of this study is also determined by its application in the banking sector, which is the most important financial sectors of the economy in Jordan, and within the researcher s knowledge, there are no studies related to the practice of creative accounting applied to this sector Study objectives This research aims to achieve the following objectives: 1. Determining the motive behind the practice of creative accounting in the Jordanian commercial banks. 2. Illustrate the relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks. 3. Illustrate the relationship between the practice of creative accounting and the size of the Jordanian commercial banks. 4. To determine the procedures that can help in curb the practice of creative accounting in the Jordanian commercial banks Hypotheses of the study We can develop the following hypotheses: Ha1: There is a set of motives of practicing creative accounting in Jordanian commercial banks. Ha2: There is a statistical significant relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks. Ha3: There is a statistical significant relationship between the practice of creative accounting and the size of the Jordanian commercial banks. Ha4: There is a set of procedures that can help in curb the practice of creative accounting in the Jordanian commercial banks. 2. Literature Review Much has been written on creative accounting; for example, Nyabuti et al. (2016) examined the influence of creative accounting practices on the financial performance in Kenya. 130 Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July 2017

3 The sample of the study comprised 50 people represent the top management of public limited companies that is the CEO, directors, top managers, and accountants, whom work in 30 public companies listed in the Nairobi Securities Exchange. The results found that creative accounting practices have a significant effect on the financial performance of a company. The results found also that most companies used creative accounting practices abusively hence resulting in most collapses of many firms. Bora and Saha (2016) highlighted the creative accounting in financial reporting and its ethical perspective. To accomplish the purpose of the study, it was depended on theoretical approach through reviewing the literature. The results indicated that creative accounting is a highly unethical practice which has been found to be exercised by majority of the corporate houses. Hussein et al. (2015) studied the creative accounting practices and its area, techniques, reasons, and method of prevention through reviewed available articles related to the creative accounting practices, where a total of 22 articles during the period were reviewed and analyzed. The findings reveled that financial statements are the most violated and manipulated area by creative accounting practices. In addition, the findings reveal that the most prevalent technique for the creative accounting practices is the manipulation of information to the stakeholders and shareholders. It was found also that there are differences between private and public companies regarding the reason of creative accounting, where the private companies use it to hide its income and reduce tax, while public companies use it to boost the price of shares. Bhasin (2015) highlighted the creative accounting practices in the Indian corporate sector. This study depends on the qualitative approach through conduct a survey and distributed questionnaires to a random sample comprise 120 people represent the preparers and users of corporate financial statement, as well as, University Teachers of Accounting. The results revealed that the practice of creative accounting is always a deliberate attempt to gain undue advantage for accountants, managers, and companies. Tassadaq and Malik (2015) examined the relationship between creative accounting and financial reporting in Pakistan. This study was depended on a quantitative research design and data collected from industrial sector through questionnaires which distributed to the sample of professionals comprised 120 professionals. The results found that the companies in Pakistan are involved in frauds or scandals because of several factors such as unethical behaviors, agency problem, and non-professional attitude. Moreover, the results found that creative accounting plays significant role in financial reporting through negatively correlated. Ijeoma (2014) aimed to know the effect of creative accounting on the Nigerian banking industry. To achieve the goal of the study, a questionnaire has been built and distributed to the sample of the study which represent 50 employees whom works in three banks in Nigeria. The results indicated a significant impact for the creative accounting on banks distress in Nigeria. The results also found that the major reason for creative accounting practices in the Nigerian banking industry was to inflate the operating costs to reduce exposure to taxes, and the other reasons include: To help maintain or boost the share price by reducing the apparent levels of borrowing, making the company appear subject to less risk and of a good profit trend, and to effect changes in accounting policies. Micah and Chinwe (2014) study the impact of creative accounting on organizational effectiveness in Nigeria. An empirical survey was carried out to achieve the goal of the study, where data collected from manufacturing firms through questionnaires. Sample size was 140 people represent the middle and top management staff of 14 quoted manufacturing firms from Nigeria Stock Exchange. The result revealed a significant relationship exists between income smoothing and profitability and market share, besides that, the results found that there is a significant relationship between regulatory flexibility and profitability and market share. Yadav (2014) investigated the creative accounting from professional prospective. To achieve the goal of the study, a questionnaire was made and distributed to the sample of the study which comprised Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July

4 60 people including professional chartered accountants, chartered accountants, and company secretary student s accountants from India, college teachers who have immense understanding of the various accounting methods of the real world. The results indicated a positive relation between creative accounting and both involvement of outside directors and internal control mechanism. While it was found that there is no relation between creative accounting and product and market competition and capital market technique. Sanusi and Izedonmi (2014) conducted research on creative accounting practices in Nigerian commercial banks. The sample of this study comprised the most experienced/senior 42 Managers/Assistant Managers and 42 Accountants/Assistant Accountants drawn from 21 consolidated commercial banks head office branches in Lagos state, and questionnaire was used to collect the data from the sample of study. The findings illustrated that the major reasons for creative accounting practices in Nigerian commercial banks are order as following: To boost the market value of shares; users of accounting information are adversely affected by this practice of creative accounting; and streamlining accounting principles and rules to reduce diversities of professional judgment in financial reporting will help minimize creative accounting practices. Akenbor and Ibanichuka (2012) investigated the creative accounting practices in the Nigerian banking industry. To achieve the purpose of the study, the survey method of research design was adopted, where a questionnaire has been the major instrument which used for generating the primary data from the sample of study which comprised 25 managers and 25 accountants drawn from the 25 recapitalized banks currently operating in the Federal Capital Territory - Abuja. The results indicated a negative relationship between users of accounting information and the practice of creative accounting, it was found also that boost the market value of shares is the major reason for creative accounting practices in Nigerian banks. 3. Theoretical Framework 3.1. Concept of creative accounting Creative accounting is as old as the accounting profession itself, although the accounting scholars have over the years carried out several researches to understand and address it, it is still considered as a problem, and it continues to be practiced by various corporations in the world (Kamau et al., 2016). Creative accounting refers to the use of accounting knowledge to influence the reported figures, whereas remaining within the jurisdiction of accounting rules and laws, so that instead of showing the actual performance or position of the company, they reflect what the management wants to tell the stakeholders (Yadav, p. 38). Hence, from the definition, we can note that creative accounting related to profit and revenue. In general, the management s objective is to achieve the highest profit and earning and if some circumstances prevail to reach this objective then the management of the firm maybe changes its accounting method, deferring or accelerating expense or revenue transactions, or use any policy which fraud in financial statements and reporting to show the earnings at a certain level in financial reporting standards Creative accounting forms Earning management and income smoothing consider as the most form of creative accounting. We can define them as follow: 1. Income smoothing is a conscious behavior which reduces periodic income fluctuations. One of the income smoothing goals is to increase the return (Garizi et al., 2011). Income smoothing refers to a conscious behavior which occurs for the purpose of decreasing fluctuations of income cycles (Venouss et al., p. 179). 132 Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July 2017

5 2. Earnings management may be defined as reasonable and legal management decision-making and reporting intended to achieve stable and predictable financial results (Rahman et al., 2013). Kelly (2011) illustrates that the factors that affect the flow of earnings management are pattern of earning management, good earning management, bad earning management, motivations of earning management, and accounting implication. 4. Methodology To accomplish the purpose of the study, a questionnaire is made with 30 questions that measure and test the study hypotheses Selection of the sample Random sampling technique was used to determine the sample size of 150 selected from three banks in the northern region of Jordan. These banks are Cairo Amman Bank, Arab Bank, and Jordan Bank. The questionnaire was distributed among the sample of study including managers, internal auditors, and accountants. A total of 121questionnaires were retrieved that are valid for statistical analysis, formed about 80.7% of overall distributed questionnaires Statistical techniques used The collected data analyzed through using SPSS statistical software, we used the following test: Reliability analysis. Descriptive analysis include: Frequencies, percent, mean and standard deviation. One sample t-test: To test the study hypotheses Data Analyses Reliability analysis From the Table 1, we can note that the range of Cronbach s alpha was between 85.65% and 92.52%, and this value for all the questions was 94.73%. Moreover, these values indicate very good results because it indicates strong correlation between the questions Descriptive of sample member From the Table 2, we can note the following: Gender: 74.4% of the study sample is male, in contrast, the female ratio was 25.6%. Years of working in the bank: The majority of the respondents were from the years of working in the bank 5 to <10 years, and their percent was 34.7%, followed by individuals with 15 years and more with the percent 27.3%, followed by individuals 1 to <5 years with the percent 16.9%. Finally, the sample members whose years of working in the bank were 10 to <15 years and their percent was 12.4%. Table 1: Reliability analysis Questions Cronbach s alpha Motives for practicing creative accounting The practice of creative accounting and the profitability The practice of creative accounting and the size Procedures that can help in curb the practice of creative accounting Total questions Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July

6 Table 2: Distribution of sample members according to personal and job variables (n=121) Variable Level Frequency (%) Gender Male 90 (74.4) Female 31 (25.6) Total 121 (100.0) Years of working in the bank 1 to<5 years 31 (25.6) 5 to<10 years 42 (34.7) 10 to<15 years 15 (12.4) 15 years and more 33 (27.3) Total 121 (100.0) Qualification Bachelor 84 (69.4) Master 27 (22.3) Doctorate 10 (8.3) Total 121 (100.0) Job Bank manager 28 (23.1) Director of accounts section 14 (11.6) Head of audit department 7 (5.8) Internal auditor 17 (14) Accountant 55 (45.5) Total 121 (100.0) Qualification: The results show that most of the members of the sample are of Bachelor qualification, with percent 69.4%, followed by individuals, who had Master qualification, and their percent were 22.3%, and finally, individuals with Doctorate qualification, and their percent were 8.3%. Job: The results show that most of the respondents are in the position of Accountant, their percent were 45.5%, followed by individuals who occupy the position of Bank manager with percent 23.1%, then those who work as a Internal Auditor position with percent of 14%, followed by individuals whose position Director of Accounts Section with percent of 11.6%, and finally, individuals who occupy the position of Head of Audit Department and their percent was 5.8% Discussing the study questions To discuss the study questions, we compute the mean and the standard deviation for the answers of sample s member and the five-level questionnaire study (Likert) was used as follows: 1 = Very disagree 2 = Disagree 3 = Middle agree 4 = Agree 5 = Very agree Depended on: Mean (1 to <2.33) refers to disagreement. Mean (2.33 to <3.66) refers to middle agreement. Mean (3.66-5) refers to agreement First dimension - motives for practicing creative accounting From the Table 3, we can note the following: The range of mean for the first dimension (motives for practicing creative accounting) was between agreement and middle agreement, where the lowest mean was refer to reducing profits and revenues and increasing expenses to reduce exposure to taxes, and this indicated middle 134 Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July 2017

7 agreement about this aspect, and the highest mean was , and this refers to protect the bank from falling into bankruptcy, and this indicated agreement about this aspect. The average of the mean was about and this indicated agreement about this dimension Second dimension - the practice of creative accounting and the profitability From the Table 4, we can note the following: The mean for the second dimension (the practice of creative accounting and the profitability) was directed toward agreement, where the lowest mean was refer to low rate of return on property leads to increased creative accounting practice, and this indicated agreement about this aspect, and the highest mean was , and this refers to the low ratio of operating expenses to total expenses leads to increased creative accounting practice, and this indicated agreement about this aspect. The average of the mean was about 4.023, and this indicated agreement about this dimension Third dimension - the practice of creative accounting and the size From the Table 5, we can note the following: The range of mean for the third dimension (the practice of creative accounting and the size) was between agreement and middle agreement, where the lowest mean was refer to the high value of average tax payments leads to increased creative accounting practice, and this indicated middle agreement about this aspect and the highest mean was 4.00, and this refers to the high proportion of tax payments to sales leads to increased creative accounting practice, and this indicated agreement about this aspect. The average of the mean was about and this indicated agreement about this dimension. Table 3: Mean for member sample about first dimension (n=121) Nominal value Questions Mean±SD 1 Attract more customers ± Protect the bank from falling into bankruptcy ± Capitalization of capital expenditure that does not meet ± capitalization requirements 4 Valuation of the securities portfolio through the adoption of ± unfair market prices 5 Demonstrate a stable level of profits achieved by the bank and ± hide the amount of losses realized 6 Maintaining the bank s credit standing and reputation ± Impact on the share price and maximize the financial value of ± the bank s shares in the financial market 8 Reducing profits and revenues and increasing expenses to ± reduce exposure to taxes 9 Non inclusion of outstanding premiums during the current year ± of long term loans within current liabilities to improve liquidity ratios 10 Eliminate compliance with accounting rules, measurement ± alternatives, and disclosure requirements for the transfer of financial statements 11 Delay the exit of real information to the market, which leads to ± increase the opportunity of the bank s management to benefit from the internal knowledge of the bank s news Average ± SD: Standard deviation Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July

8 Table 4: Mean for member sample about second dimension (n=121) Nominal value Questions Mean±SD 12 A low rate of return on assets leads to increased creative ± accounting practice 13 Low rate of return on property leads to increased creative ± accounting practice 14 A lower rate of earnings per share leads to increased creative ± accounting practice 15 The low ratio of operating expenses to total expenses leads to ± increased creative accounting practice 16 The lower ratio of total reserves to net income leads to increased ± creative accounting practice 17 High debt ratio leads to increased creative accounting practice ± Average ± SD: Standard deviation Table 5: Mean for member sample about third dimension (n=121) Nominal value Questions Fourth dimension - procedures that can help in curb the practice of creative accounting The mean for the fourth dimension (procedures that can help in curb the practice of creative accounting) was directed toward agreement, where the lowest mean was refer to relying on the auditors with experience and efficiency in the various accounting methods, and this indicated agreement about this aspect, and the highest mean was , and this refers to support the supervisory role of the audit committees in the Jordanian commercial banks, and this indicated agreement about this aspect. The average of the mean was about (3.929) and this indicated agreement about this dimension (Table 6) Test of hypotheses Mean±SD 18 The high proportion of tax payments to sales leads to increased ± creative accounting practice 19 The higher nominal value of the stock leads to increased ± practice of creative accounting 20 High volume trading leads to increased creative accounting ± practice 21 The high value of average tax payments leads to increased ± creative accounting practice 22 The rise in total assets leads to increased creative accounting ± practice 23 An increase in total reserves leads to increased practice of ± creative accounting Average ± SD: Standard deviation To test the hypotheses, we use one sample t-test and the results were as follow: Ha1: There is a set of motives of practicing creative accounting in Jordanian commercial banks. 136 Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July 2017

9 From the Table 7, we can note that there is a set of motives of practicing creative accounting in Jordanian commercial banks, where the significant value was 0.000, and this value is significant at α Hence, we reject null hypothesis and accept the alternative hypothesis that says: There is a set of motives of practicing creative accounting in Jordanian commercial banks. Ha2: There is a statistical significant relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks. From the Table 8, we can note that there is a statistical significant relationship between the practice of creative accounting and the profitability, where the significant value was 0.000, and this value is significant at α Hence, we reject null hypothesis, and accept the alternative hypothesis that says: There is a statistical significant relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks. This result consequent with Nyabuti et al. (2016) that revealed that creative accounting practices have a significant effect on the financial performance of a company in Kenya, and Micah and Chinwe (2014) that found a significant relationship between income smoothing and profitability. Ha3: There is a statistical significant relationship between the practice of creative accounting and the size of the Jordanian commercial banks. From the Table 9, we can note that there is a statistical significant relationship between the practice of creative accounting and the size, where the significant value was 0.000, and this value is Table 6: Mean for member sample about fourth dimension (n=121) Nominal value Questions Mean±SD 24 Provide the full independence for the internal auditors which ± necessary to curb the practice of creative accounting 25 The audit department of the bank shall continuously supervise ± the work of the internal auditors to curb the practice of creative accounting 26 Relying on the auditors with experience and efficiency in the ± various accounting methods 27 Judicial accounting legislation in all listed companies ± Support the supervisory role of the audit committees in the ± Jordanian commercial banks 29 Activate the role of external auditors in disclosing the practice of ± creative accounting 30 Apply deterrent punishments to internal auditors who are ± negligent in disclosing the practice of creative accounting Average ± SD: Standard deviation Table 7: Results of one sample t test for motives of practicing creative accounting Item t value Mean Sig. Motives for practicing creative accounting Table 8: Results of one sample t test for relationship between the practice of creative accounting and the profitability Item t value Mean Sig. Relationship between the practice of creative accounting and the profitability Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July

10 significant at α Hence, we reject null hypothesis and accept the alternative hypothesis that says: There is a statistical significant relationship between the practice of creative accounting and the size of the Jordanian commercial banks. Ha4: There is a set of procedures that can help in curb, the practice of creative accounting in the Jordanian commercial banks. From the Table 10, we can note that there is a set of procedures that can help in curb the practice of creative accounting, where the significant value was 0.000, and this value is significant at α Hence, we reject null hypothesis and accept the alternative hypothesis that says: There is a set of procedures that can help in curb the practice of creative accounting in the Jordanian commercial banks. 5. Results This study aimed to examine the practice of creative accounting on the Jordanian banking sector in the northern region and the results were as follow: 1. There is a set of motives of practicing creative accounting in Jordanian commercial banks, and the most important motive was to protect the bank from falling into bankruptcy, with highest mean (4.4545), then the motive of attract more customers, and its mean was , then the motive of maintaining the bank s credit standing and reputation, with mean of , but the lowest motive was reducing profits and revenues and increasing expenses to reduce exposure to taxes, with mean of There is a statistical significant relationship between the practice of creative accounting and the profitability of the Jordanian commercial banks, and this result indicates that the Jordanian commercial banks practice the creative accounting to enhance their profitability to have well position. 3. There is a statistical significant relationship between the practice of creative accounting and the size of the Jordanian commercial banks, and this result indicates that the Jordanian commercial banks practice the creative accounting to reduce the percent of tax. 4. There is a set of procedures that can help in curb the practice of creative accounting in the Jordanian commercial banks, and the most important procedure was support the supervisory role of the audit committees in the Jordanian commercial banks, with highest mean (4.0744), then activate the role of external auditors in disclosing the practice of creative accounting, with mean of , and the lowest procedure that can help in curb the practice of creative accounting in the Jordanian commercial banks according to the sample of the study was relying on the auditors with experience and efficiency in the various accounting methods, with the lowest mean (3.6612). 6. Recommendations This study recommends the following recommendations: 1. Jordanian commercial banks must protect their profitability through different policy instead of practice creative accounting. 2. Jordanian commercial banks have to support the supervisory role of the audit committees. Table 9: Results of one sample t test for relationship between the practice of creative accounting and the size Item t value Mean Sig. Relationship between the practice of creative accounting and the size Table 10: Results of one sample t test for procedures that can help in curb the practice of creative accounting Item t value Mean Sig. Procedures that can help in curb the practice of creative accounting Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July 2017

11 3. It is very important to activate the role of external auditors in disclosing the practice of creative accounting. 4. It is very important to apply deterrent punishments to internal auditors who are negligent in disclosing the practice of creative accounting. 5. It is very important to make periodic supervision on the work of the internal auditors by the audit department of the bank. References Akenbor, C.O., Ibanichuka, E.A.L. (2012), Creative accounting practices in Nigerian banks. An International Multidisciplinary Journal, Ethiopia, 6(3), Bhasin, M. (2015), Creative accounting practices in the Indian corporate sector: An empirical study. International Journal of Management Sciences and Business Research, 4(10), Bora, J., Saha, A. (2016), Creative accounting in financial reporting and its ethical perspective. International Journal of Applied Research, 2(3), Diana, B., Madalina, P. (2008), Is Creative Accounting A form of manipulation?. Journal Accredited CNCSIS- Category B+, Tom, 3, Garizi, A.Z., Homayoun, A., Firouzi, B.B. (2011), The impact of income smoothing on companies abnormal return. Australian Journal of Basic and Applied Sciences, 5(9), Hussein, H., Kasim, N., Arumugam, V. (2015), A review of creative accounting practices and its area, technique and ways of prevention. International Journal of Science and Research, 4(10), Ijeoma, N.B. (2014), The effect of creative accounting on the Nigerian banking industry. International Journal of Managerial Studies and Research, 2(10), Kamau, C., Namusonge, G., Bichanga, W. (2016), Creative accounting related practices among corporations listed in Nairobi securities exchange in Kenya. International Journal of Sciences: Basic and Applied Research, 25(1), Kelly, W.K.S. (2011), Earning Management; Is It Good or Bad. Management and Science University (MSU). Available from: [Last accessed on 2017 Jan 22]. Micah, L., Chinwe, O. (2014), The impact of creative accounting on organizational effectiveness: A study of manufacturing firms in Nigeria. British Journal of Economics, Management and Trade, 4(12), Nyabuti, V., Memba, F., Chege, C. (2016), Influence of creative accounting practices on the financial performance of companies listed in the Nairobi securities exchange in Kenya. International Journal of Management and Commerce Innovations, 3(2), Rahman, M., Moniruzzaman, M., Sharif, J. (2013), Techniques, motives and controls of earnings management. International Journal of Information Technology and Business Management, 11(1), Sanusi, B., Izedonmi, P. (2014), Nigerian commercial banks and creative accounting practices. Journal of Mathematical Finance, 4, Tassadaq, F., Malik, Q. (2015), Creative accounting and financial reporting: Model development and empirical testing. International Journal of Economics and Financial Issues, 5(2), Venouss, D., Karami, G., Tajik, K. (2006), An investigation of income smoothing in Tehran stock exchange utilizing accounting standard number 15 (accounting for investments). The Iraninan Accounting and Auditing Review, 43, Yadav, B. (2014), Creative accounting: An empirical study from professional prospective. International Journal of Management and Social Sciences Research, 3(1), Australian Academy of Accounting and Finance Review Volume 3 Issue 3 July