Fraud Accounting in Slovakia after Times of Financial Crisis

Creative accounting is the practice which is adopted within the framework of accounting system. In other words, taking undue advantage of loopholes of accounting system is creative accounting. In highly competitive market, it becomes very important and necessary for every business to find new and innovative ways of running the business. One of the new ways is creative accounting. Creative accounting is an art of manipulating the books of accounts in a manner that desired results can be drawn. Aggressive accounting, cooking the books and massaging the numbers are few common terms that is used in context of creative accounting. Creative accounting in present uncertain environment is facilitating management to accomplish personal goals as big, well established firms followed. Traditional accounting was limited to record, classify and summarize the monetary results and communicate as the same to investors. However, modern accounting demands a higher level of transparency with an accurate reporting of financial position of the firm. The change has been seen in modern accounting system after a change in financial market caused by financial crisis in 2008-2009. Companies are also taking active part in obtaining funds through market. As the contribution of public funds increased in the corporate sector, the demand of transparency also increased and thus the way of managing books has also changed. Companies are trying to find out methods whereby they can provide full transparency and simultaneously accomplish their personal goals. At first, some definition of creative accounting is provided after introduction of theme of paper. After that, different motivations for its uses and several creating accounting techniques have sought to identify its existence, nature and incidences. The paper continues with a review of some ethical issues concerning with creative accounting and concludes by suggesting possible solutions for this problem reference to Slovakia. Various studies conducted on accounting scandals in other countries will also be considered in the present study.