THE RELATIONSHIP BETWEEN CREATIVE ACCOUNTING AND FINANCIAL REPORTING QUALITY: A STUDY OF SELECTED BANKS IN NIGERIA
Keywords:
Creative accounting, Quality,financial reporting, selected banks,NigeriaAbstract
This research work focused on the relationship between creative accounting and financial reporting quality in selected deposit money banks in Nigeria. Income smoothing and Off statement financial position financing were the creative accounting proxies employed to ascertain their effect on financial reporting quality. Financial reporting quality (FRQT) was measured in terms of qualitative characteristics of financial report as provided by IASB conceptual framework. The research design adopted in this study was survey design because the data used was primary. The population of the study consist of 450 respondents drawn from the ten different deposit money banks in Kogi State. However, the sample size of this study was 212 determined using Taro Yamane formula. Primary data were obtained through Likert 5- points structured questionnaire. In order to examine the cause-effect relationships between the dependent variable and independent variables as well as to test the formulated hypotheses, the study relied on a robust OLS regression analysis. The results obtained from the robust OLS regression analysis revealed that Income smoothing has a statistically positive but insignificant effect on the financial statement quality, off statement financial position transaction has a statistically positive and significant effect on the financial statement quality. Thus, we concluded that creative accounting has significant effect on the financial reporting quality of deposit money banks in Nigeria. The study therefore, among others, recommended that all operators of financial statements should be effectively monitored. More emphasis should be laid in the review of the standard.
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