"CREATIVE” FINANCIAL REPORTING AND ITS CONSEQUENCES FOR THE INDIVIDUAL SUBJECTS
Journal Title: Knowledge International Journal - Year 2018, Vol 26, Issue 1
Abstract
The modern way of doing business, which implies public and transparent business, emphasizes the need for transparent, timely and reliable financial statements of companies. However, the management company is often inclined to formulate a company's financial statements, in line with the company's goals and trying to show corporate performance in a more positive light, in order to gain the reputation of a stable investment grade company with a certain development of the company in perspective, desirable and safe for investment by investors. Consequently, financial management often deviates from international and national accounting regulations, the application of which would lead to true and objective balancing. Such "bogus" balances create the current result for the company, in order to cause distrust of their clients, potential investors, banks, their entire business environment over a longer period of time. This further creates a wave of distrust in the financial market of the national economy, especially if it is fragile in the development phase when it can slow it down. Consequences of "creative" financial reporting are far-reaching with multiple negative effects on all participants in the economy, as well as the entire national economy, as well as the economy at the global level.
Authors and Affiliations
Gordana Stojmenović, Tatjana Mrvić, Miloš Pavlović
Keywords
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- EP ID EP50065
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