REVISION SLIDES

1
 Topic 5, 7, 8 &9
Final Assessment

2
 How to define : Creative Accounting

• Naser (1993) define creative accounting as the

transformation of financial accounting figures
from what they actually are to what preparers
desire by taking advantage of the existing rules
and/or ignoring some or all of them.

• Orio Amat et al (1999) define creative

accounting as a process whereby accountants
use their knowledge of accounting rules to
manipulate the figures reported in the accounts
of a business

3
 Definition – Creative Accounting
• Michael Jameson, writing from the perspective
of the accountant, argues:
– The accounting process consists of dealing
with many matters of judgement and of
resolving conflicts between competing
approaches to the presentation of the results
of financial events and transactions... this
flexibility provides opportunities for
manipulation, deceit and misrepresentation.
These activities - have come to be known as
'creative accounting
4
Vagueness and flexibility of accounting standard

1. Permitted choices of accounting policies

– accounting rules allow a company to choose
between different accounting methods.
– A company can therefore choose the accounting
policy that gives their preferred image.

2. Application of judgment
– entries in the accounts involve an unavoidable
degree of estimation, judgement, and prediction.
e.g. useful life of assets

3. Undefined concepts such as “true and fair view”

and materiality
5
 Techniques of creative
accounting
• Earnings management
• Income Smoothing
• Window Dressing
• Off Balance Sheet Financing
• Big Bath Accounting
6
 Reasons / Motives for
Creative Accounting

• Stock Market based incentive

• Regulatory concern
• Contracting Motivation

7
 CREATIVE ACCOUNTING

The mechanisms used to

overcome creative accounting
problems

8
Accounting for Financial
Instruments
• Calculation for financial asset and
financial liability.
• All slides are important except Hedge
Accounting

9
 Accounting for Revenue
and Current Issues
• Requirement for MFRS15 Revenue
From Contracts With Customers
• No calculation

10
 Accounting for leases
• Requirement for MFRS117
• Why change to MFRS16 since 2019?
• The conditions for MFRS16
• The requirement for MFRS16
• No calculation

11
 Important Information
• Students are advised to ensure
infrastructure facility (i.n. computer
device and Internet speed) is
adequate and functioning on
Monday, 04.05.2020 starting at
9.50 am until 4.00 pm. The
duration is 6 hours.

12
 Important Information
• Students are allowed to refer to
unlimited resource materials
including lecture notes, textbooks,
reference books, journal articles and
online materials that are relevant
and useful.
• Those VIOLATING the rules will be
sent to the Examination Disciplinary
Committee.

13
 Important Information
STEP FOR SUBMISSION –
“NO NEED ID VERIFICATION”
1. WBLE - under submission link

File 1: Answer scripts together with the

Declaration Form.

File 2: Journal 1 (if the question required

to find journal; must put citation and
referencing)
14
 Important Information

File 3: Journal 2 (if the question required

to find journal; must put citation and
referencing)

File 4: Journal 3 (if the question required

to find journal; must put citation and
referencing)

15
 Important Information

File 5: Journal 4 (if the question required

to find journal; must put citation and
referencing)

2. Please email all the ABOVE files to:

ubaf3023@gmail.com
It is compulsory for UBAF3023
Corporate Reporting and Currents
Issues
16
 Important Information

Students MUST submit all the files to

these TWO (2) platform due to the low
capacity of WBLE platform.

Email all the files with your full name,

Index number and student ID.

YOUR COOPERATION IS
APPRECIATED
17