STRUCTURI ORGANIZATORICE SPECIFICE ÎNTREPRINDERII BAZATE PE CUNOAŞTERE [311541]

PERCEPTIONS REGARDING TREATMENTS AND CREATIVE

ACCOUNTING POLICIES

HERBEI (MOȚ) IOANA

PhD Student: [anonimizat], Faculty of Economics and Business Administration

[anonimizat]

CERNUȘCA LUCIAN

Professor PH.D, “Aurel Vlaicu” [anonimizat],

[anonimizat]

Abstract

This study aims to present the students' perception on the accounting profiles and professional accountants regarding the forms of manifestations of creative accounting.

The article is structured in the following part: introduction, [anonimizat], as well conclusions and limits on the research.

[anonimizat] a number of issues related the tendency to resort to creative accounting practices. The respondents reject the idea of calling own initiatives to manipulate practices of accounting numbers and distortion the image regarding the financial statements and their performance. They believe that resorting to ethics in accounting is essential when on the basis of professional judgment are developed and substantiates the enterprise accounting policies.

[anonimizat]'s financial image.

Keywords: [anonimizat], [anonimizat], financial statements

JEL codes: M40, M41

1. Introduction

With the assimilation of European Directive 34/2013 in the Romanian environmental accounting and harmonization of the IAS/[anonimizat] a priority side to provide useful information about the financial position and economic performance. [13]

Professional accountants and managers began to understand the importance of developing and substantiating enterprise accounting policies in the current context in which it placed Romanian accounting system. The scientific literature brings into discussion the fair accounting but also bad accounting. [anonimizat]: [anonimizat]. [8] [anonimizat], engineering, arts, stake and social game. [anonimizat]. Professional accountants believe that the emergence of creative accounting has been facilitated by:

accounting treatments used to solve the same problem accounting and have a different effect on the financial position and performance;

degrees of freedom allowed by accounting rules;

shareholders who seek to maximize the outcome expectations and achieve bigger dividends;

the expectations of managers regarding third party providing a favorable image of the entity's performance and results.

A number of papers raise negative meaning and use of the creative accounting in order to give others a positive image of the company results in most cases better than the real one.

Dumitrescu (2013) does not exclude the positive alternative in the sense of an innovation leading to an engineered able to answer the question: [anonimizat]? [10]

Professional accountants should appeal to ethical in accounting, they should show balance in their professional activities is neither optimists nor pessimists but with finesse understand professional issues faced by being receptive to changes and legislative changes.

2. Literature review

Analyzing the abundance of relevant literature that brings into discussion the issue of creative accounting we find that it came within the concerns of many researchers in academic and professional environments. A number of researchers meanings leans on the definition of creative accounting.

In the specialty literature are approached a number of conceptual and motivational aspects of the emergence and development of creative accounting practices, with over time a number of concerns related to creative accounting in an ethical perspective (Malciu, 1999 [16]; Feleagă and Malciu, 2002 [11]; Maruszenska, 2010 [17]; Uyar and Gungormuș, 2013 [20]; Al Momani and Obeidat, 2013 [1] ; Huber, 2013 [14]; Boyce, 2014 [7]; Brijesh, 2014 [6]).

In 2005, Lambert and Veneers (2005) carried out a study dealing profits manipulation practices and examines how the Anglo-Saxon lead to discouragement. [15]

Balaciu and others (2009) does a review of relevant literature regarding creative accounting phenomenon and its consequences in practice of professional accountants. We encounter other studies with such concerns by presenting different target groups on perception the phenomena of manifestation of creative accounting. [2] In its target groups were found accountants professional of professional bodies, accounting students profiles, managers, investors, academics and others.

Munteanu and Zuca (2011) focus their research on the detection of motivations that led to the use of creative accounting, identification of creative accounting practices and techniques and limiting their opportunities. They consider creative accounting as "a tool in support of manager using to promote and support the company's image he leads and selection information such that the data provided to support the interests which it pursues". [18]

Vladu and Grosanu (2011) presents an empirical study on how it is perceived in Romania accounts by representatives of the accounting profession, auditors and accounting regulatory body representatives, having concluded that in Romanian the accounting information reliability is considered high by respondents. They appreciate that it is difficult to use creative accounting techniques and their detection process requires high professionalism. [21] Our respondents consider that the overvaluation or undervaluation of profit, income tax and lease are the main creative accounting techniques applicable in Romanian accounting environment. The role of professional bodies and accounting limit is considered important in limiting the creative accounting practices, according to the conclusions made by Vladu and Grosanu.

Balaciu (2011) conducted an empirical study regarding the identification of managers' perceptions about the usefulness of accounting information and other factors taken into account in making decisions. In the study it was concluded that profit maximization is in opinion of the managers surveyed the most important interest in accounting policy choice. The appeal to ethics is a priority for 88% of respondents, which is contrary to the above conclusion which is based on managers option to adopt an accounting policy that creates a favorable image of the company, to the detriment of a true and fair view. [3]

A year later, Balaciu and others carried out a study on the perception of the existence of statutory auditors and the forms of creative accounting phenomena. During the audit engagement, the auditors may notify whether transactions have been carried out so that to the financial statements would present a beneficial image of the entreprise, but not a faithful image. [4] This way they are able to identify accounting manipulation tendencies and to suggest adjustements of financial statements.

Groșanu (2013) opines how the structure of the Board of Directors influences some companies to use creative accounting techniques, leading to the conclusion that a company can resort to techniques such decreases with the presence of several independent persons on the Board of Directors. Moreover, the existence of executives and bankers in the structure of the Audit Committee is associated with a reduced risk of use creative accounting practices at the company. [12]

Brijesh (2014) try “o find out the relationship between creative accounting and types of industries which adopt creative accounting to manipulate the financial figures. [6] The end of the study undertaken, the researcher concludes that “it is not possible to reduce the impact of creative accounting completely because of involvement of managers and auditors and slow work of regularities bodies”.

A different approach related to creative accounting phenomenon was caught in a study based on the technique of free association by Balaciu and others (2014). The study has showed that more than half of the managers quastioned answered that they had used accounting manipulation techniques to beautify the image of their companies even though they show a real aversion toward loss. [5]

Cernușca (2015) addresses a study on the perception of the manifestation of professional accountants in the field of accounting judgment. Professional accountants interviewed pleads for the importance it provides the national accounting professional ethics. [9] Professional ethics urges the professional accountant to exercise during fulfilling its mission, honesty and probability, and call of professional judgment to be made only in spiritual goal of true and not in the use of creative accounting practices. [9]

Also in 2015, Nicolaescu and others, conclude that creativing in accounting is not a bad as long as it is used to discover the best ways to record in accounting the economic operation in order to reflect, in the financial statements, a true and fair view of the assets and performance of the company, which actually is the objective of accounting. [19]

3. Research methodology

Our research on the perception of students and accounting professionals regarding the phenomenon of creative accounting, is a transversal descriptive type. The period in which the research was conducted was December 2014 and February 2015. The research method used is the survey, and research instrument is the questionnaire.

In our approach was used in the following steps:

a) Purpose and research objectives

The study undertaken aims to identify the perceptions of students and accounting professionals regarding treatments and creative accounting practices.

The research objectives are:

Determination of accounting professionals and students perception of accounting profiles, calling on creative accounting practices in their own initiative without violating the legal provisions in force;

Determination perception of professional accountants and accounting students' profiles, calling on creative accounting practices as a result of the requirement management entity;

Determination perception of professional accountants with professional experience in small and medium vis-a-vis those with experience in terms of resorting to creative accounting practices;

Determination perception of professional accountants and accounting students' profiles in terms of the need for a creative accounting course in the university curricula.

Determination perception on accounting ethics: key element in the development and substantiation of the entity's accounting policies.

For this we proceeded to a descriptive analysis of the responses, but also to test four hypotheses.

b) Establish target group

The target group of the research consists of 100 students from the Aurel Vlaicu University from accounting profile and 100 professional accountants from the Body of Expert and Licensed Accountants of Arad. Of the 100 students 28 are men and 72 are women, and of the 100 professional accountants are 36 men and 64 are women.

Figure no. 1 shows the distribution of the sample of professional accountants in relation to their professional experience.

Figure no. 1 – Sample distribution of professional accountants in relation to professional experience

Source: own elaboration based on responses from questionnaires

c) The design, drafting and implementation of the questionnaire.

The questionnaire contains two categories of questions:

Questions of general character, their role being to provide a more complete picture about the profile of the respondents in the sample (status, work experience, age and sex)

Questions closed and semi-enclosed professional character on the perception of the phenomenon of creative accounting.

In development of questionnaires was used Likert scale with 5 levels of appreciation. This type of measurement scale refers to a number of issues to which respondents express their agreement or disagreement. Questionnaires were distributed to respondents on paper, after which they were collected and processed.

d) Centralization of data processing and interpretation of results and writing of the investigation report.

4. Results

In the following we will analyze the research hypotheses in the validation sample and analyze results. The quantification of opinions was performed using Likert scale and the data of the five levels of scale were assigned scores of -2 to +2.

Hypothesis H1: Professional accountants and students at accounting profiles have a similar perception regarding resorting to creative accounting practices on its own initiative, without violating the legal provisions in force.

As long as the law allows some degrees of freedom, and the rules of IAS/IFRS contain options and two or more treatments for solving the same problem accounting, accounting professionals may be tempted to resort to creative accounting practices. It is important that the option to a treatment or another, to an option or another does not occur in order to embellishment the financial statements.

Dumitrescu (2013) believes that "instead of being preoccupied with finding embellishment techniques results for display purposes as large profits to attract investors, it would be better for entities to be concerned with finding ways to maximize results effectively, better managing resources and avoiding waste, thus removing the risk of giving higher dividends than they can afford and pay an additional tax on embellishment ". [10]

Appealing to professional reasoning in development and making policies accounting, professionals will need to appeal to ethics in accounting in order to produce quality financial statements reflecting the true image. Interviewees were asked to express their degree of agreement or disagreement with regard to resort to creative accounting practices on its own initiative to manipulate accounting numbers.

Centralized results are presented in table and figure below:

Table no. 1 – Calling creative accounting practices

The results analysis involves the calculation of a weighted average to determine the average score:

Average score students = (1)

Average score professionals = (2)

Figure no. 2 – Calling creative accounting practices to manipulate accounting
Source: own elaboration based on responses from questionnaires

Final average score at both the level of students and professional accountants is between -2 and -1, corresponding to totally disagree and disagreement levels closer to being the total variance. As a result, the respondents would not agree to seek creative practices and techniques to manipulate accounting numbers and provide a distorted picture of the financial statements and the entity's performance. The respondents were asked to express their degree of agreement or disagreement regarding total resorting to creative accounting practices, in the sense of an innovation leading to a engineering able to answer the question: How to manage resources as effectively to achieve economic and financial performance?

Centralized results are presented in table and figure below:

Table no. 2 – Calling creative accounting practices

The results analysis involves the calculation of a weighted average to determine the average score:

Average score students = (3)

Average score professionals = (4)

Figure no. 3 – Call creative accounting practices in the context of a positive connotation entity
Source: own elaboration based on responses from questionnaires

The final average score both at the level of students and of professionals at +1 and +2 ranges from being very close to the totally agree.

According to the answers given by respondents, we find the following: creative accounting has a negative connotation given that is not intended to reflect an accurate picture designed to lead to the development of financial statements in accordance with the desire of managers, but can also have a positive connotation meaning finding ways to maximize the results effectively manage resources more efficiently by avoiding waste.

Given the above, hypothesis H1 is validated.

Hypothesis H2: Professional accountants and students form accounting profiles have a similar perception regarding resorting to creative accounting practices as a result of requirements management entity.

Interviewees were asked to express their degree of agreement or disagreement about the interests pursued by managers in accounting policy choice.

Centralized results are presented in the table and figures below:

Table no. 3 – The interest pursued by managers in call accounting policy

The results analysis involves the calculation of a weighted average to determine the average score:

The policy of maximizing the result

Average score students = (5)

Average score professionals = (6)

The policy of minimizing the result

Average score students = (7)

Average score professionals = (8)

Figure no. 4 – Interest pursued by managers in accounting policy choice
(policy of maximizing earnings)
Source: own elaboration based on responses from questionnaires

Figure no. 5 – Interest pursued by managers in accounting policy choice

(policy of minimizing earnings)

Source: own elaboration based on responses from questionnaires

The final average score both at the level of students and of professional is between 1 and 2, which corresponds levels and total agree.

As a result, both students and professionals accountants surveyed believe that managers pursue either minimizing or maximizing earnings in accounting policy choice.

Entity managers may be tempted to seek professional accountants resorting to creative accounting practices to meet their interests to minimize or maximize the result. Given that aims to pay a smaller tax to the state budget, the management entity might be tempted to seek professional accountants to appeal to those practices and creative accounting techniques that lead to the minimization result. In contrast to situation that aims to attract investors or a loan from the bank, the management entity might be tempted to seek professional accountants to appeal to those practices and creative accounting techniques leading to maximize results.

Interviewees were asked to express their degree of agreement or disagreement with regard to resort to creative accounting practices as a result of the requirement management entities, without violating the law.

Centralized results are presented in the table and figure below:

Table no. 4 – Calling creative accounting practices

The average score is as follows:

Average score students = (9)

Average score professionals = (10)

Figure no. 6 – Calling creative accounting practices, the requirement management entity
without violating the legal
Source: own elaboration based on responses from questionnaires

The final average score to students’ level is between 0 and 1, which corresponds no matter and agreed levels.

The final average score to professional accountants’ level is between -1 and 0, that corresponds no matter and disagreement levels.

As a result there is a difference in perception between students and accounting professionals regarding resorting to creative accounting practices at the request of the entity's management, which have the effect of minimizing and maximizing outcome without infringing and following hypothesis H2 is invalidated.

Hypothesis H3: Professional accountants with professional experience in small and medium have different perceptions of accounting professionals with extensive experience in terms of resorting to creative accounting practices.

Interviewees were asked to express their degree of agreement or disagreement with regard to resort to creative accounting practices in their professional activities without violating the law. We intend to investigate responses of accounting professionals with experience in small and medium (up to 15 years) compared to those with extensive experience (over 15 years).

Centralized results are presented in table and figure below:

Table no. 5 – Calling creative accounting practices according to experience

Calculate a weighted average to determine the average score:

Professional experience under 5 years

Average score = (11)

Professional experience between 5 and 10 years

Average score = (12)

Professional experience between 10 and 15 years

Average score = (13)

Professional experience between 15 and 20 years

Average score = (14)

Professional experience over the 20 years

Average score = (15)

Professional experience to 15 years

Average score = (16)

Professional experience over the 20 years

Average score = (17)

Figure no. 7 – Calling creative accounting practices of professional accountants
according to their professional experience
Source: own elaboration based on responses from questionnaires

The final average score to professionals accountants’ level with work experience of up to 15 years is between -1 and 0, which corresponds disagreement and no matter levels. The average score in the final accounting professionals with over 15 years professional experience is between 0 and 1, which corresponds no matter and agreed levels.

We notice a difference in perception between accounting professionals with professional experience and those with low and average years of experience, which suggests that H3 hypothesis is validated.

Hypothesis H4: Perception students differ from that of professional accountants regarding the need for a creative accounting course in university curricula.

Interviewees were asked to express their degree of agreement or disagreement about the need for creative accounting course in university curricula.

Centralized results are presented in table and graph below:

Table no. 6 – The need for creative accounting rate

The results analysis involves the calculation of a weighted average to determine the average score.

Average score students = (18)

Average score professional = (19)

Figure no. 8 – The need for creative accounting course in university curricula
Source: own elaboration based on responses from questionnaires

The final average score both of students and professional level accountants is between 1 and 2, which corresponds agreed and total agree level. As a result both students and accounting professionals find it necessary to introduce a process of creative accounting in university curricula for graduate students in accounting profile.

Respondents were asked to express their degree of agreement or disagreement about four sentences. The quantification of statements is performed using Likert scale. These statements relate to their perception related to the content of the creative accounting.

The results are shown in table and the following figures:

Table no. 7 – Perceptions of creative accounting related course

Determine the average score for each of the four statements:

Perception 1:

Average score students = (20)

Average score professional = (21)

Perception 2:

Average score students = (22)

Average score professional = (23)

Perception 3:

Average score students = (24)

Average score professional = (25)

Perception 4:

Average score students = (26)

Average score professional = (27)

Figure no. 9 – Perceptions regarding the content of creative accounting in the students' vision
Source: own elaboration based on responses from questionnaires

Figure no. 10 – Perceptions regarding the content of creative accounting in the professional' vision
Source: own elaboration based on responses from questionnaires

The final average score in the first three perceptions is between 1 and 2 which corresponds agreed and totally agree level. Both students and accounting professionals believe that creative accounting course contributes to the development of accounting thought, the assimilation of new knowledge placed in national and international accounting referential perimeter and the assimilation of knowledge related to the development and substantiation of the entity's accounting policies without is entered in the accounts of intent.

Regarding the last perception, both students and accounting professionals surveyed believe that creative accounting course does not contribute to the assimilation of knowledge related to the development and substantiation of the entity's accounting policies made to manipulate accounting, final average score last perception that approaching the totally disagree variance.

Interviewees were asked to express their opinion about how creative accounting rate would influence their tendency to resort to creative accounting policies and at the same time to remain within the law. Their assessments were quantified using a scale with five levels (from no influence to strong influence).

Centralized results are presented in table and figure below:

Table no. 8 – Influence of creative accounting rate of students

To be compiled five levels of scale will be given scores of -2 and +2. Determine a weighted average to determine the average score as follows:

Average score students = (28)

Average score professionals = (29)

Figure no. 11 – Influence of creative accounting rate of students
Source: own elaboration based on responses from questionnaires

The final average score both of students and professional level is between 1 and 2, which corresponds to the average levels of influence and strong influence, being closer to the average influence. As a result both students and accounting professionals have a similar perception that the course of creative accounting would influence an average share the tendency to resort to creative accounting policies and at the same time to remain within the law. Given the above, we find that the hypothesis H4 is validated.

Hypothesis H5: Professional accountants and accounting students at profiles have a similar perception of ethics in accounting regarded as a priority when designing and underlying accounting policies of the entity level.

Interviewees were asked to express their degree of agreement or disagreement regarding the appeal to ethics in accounting.

Centralized results are presented in table and figure below:

Table no. 9 – Ethics in Accounting

Calculate the arithmetic mean to determine the average score:

Average score students = (30)

Average score professionals = (31)

Figure no. 12 – The appeal to ethics in accounting
Source: own elaboration based on responses from questionnaires

The final average score at both the professional accountants and students at +1 and +2 ranges from being very close to the overall level of agreement.

No there is a difference in perception between students and accounting professionals regarding ethics call accounting. This is considered by respondents as a priority in the development and substantiation of the entity's accounting policies, H5 hypothesis is validated.

As regards the detailed presentation of the results of hypothesis testing we intend to present below a summary thereof (Table no.10):

Table no. 10 – Accepting/rejecting assumptions made

Source: project implemented by authors

5. Conclusions and limits of research

Although the results of the study conducted limited, given that the target group were not part than students and accounting professionals, however it appears that some of the results are consistent with prior art. As a result we believe that this study gives a valid perspective on how the respondents perceive phenomena manifestation of creative accounting. Both students and professionals interviewed have a similar perception regarding resorting to creative accounting practices on its own initiative, without prejudice to the provisions in force.

Respondents do not exclude positive alternative creative accounting practices in the sense of an innovation leading to a engineering consisting of concern to find ways to manipulate the results effectively, better managing resources and avoiding waste.

Professional accountants must appeal to ethics in accounting or be a balanced person, or prefer not to any prudential aggressive methods, but those that reflect the truth as it is in reality, since beyond judgment, intuition and talent accounting means.

Both students from profiles accounting and accounting professionals surveyed consider the entity's management may consider two approaches opposite in terms of how the choice of accounting policies in accounting theories: the effect of maximizing the outcome or its minimization depending on the context intended.

In the study there is some difference of perception between students and the professional accountants interviewed for resorting to creative accounting treatments due to requirements management entity. Professional accountants’ shows a more retained to students interviewed regarding resorting to creative accounting practices at the request of the entity's management, perhaps as a result of work experience.

With the opening of the Romanian accounting for European and international university curricula were introduced creative accounting courses accounting policies and options (fair accounting versus bad).

They believe that the introduction of these courses in university curricula is to contribute to the development of accounting thought, to acquire a thorough knowledge of accounting referential placed in the European and international sphere without trace manipulation of accounting figures.

Appealing future elements of statistical and econometric more elaborate calculations, we intend to provide additional information relevant conclusions regarding the manifestation of creative accounting phenomena. Also in future research we plan to extend the study of expanding the target group with students from other universities in the country and abroad, managers, investors, and academics.

ACKNOWLEDGMENTS:

This work was financially supported through the project "Routes of academic excellence in doctoral and post-doctoral research – READ" co-financed through the European Social Fund, by Sectoral Operational Programme Human Resources Development 2007-2013, contract no POSDRU/159/1.5/S/137926.

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