ABSTRACT

It has been observed that creative accounting is at the root of accounting scandals were a number of recent large corporate collapses and restatements of financial statements owe their occurrences in some respect to techniques of creative accounting. Financial analysts and investors focus on cash flow operations as an indicator of financial strength as a prime target for massaging annual reports. This research work was carried out to analyze the effect of creative accounting techniques on corporate profitability, using some selected quoted companies in Nigeria. Various literatures containing information and studies in the area of some quoted companies was reviewed with reference to the fact that the researcher used questionnaire, interviews and observation and also relevant lecture notes, textbooks e.t.c. Annual financial report data states in three years the recognition to primary and secondary data. The researcher put together the effects of creative accounting techniques into two hypotheses which are tested using the data obtained from responses from various companies in which personal interviews were conducted, questionnaires were also distributed and retuned with answers. The population for this study was not specific due to the staff's kind of Job and personal relation. The researcher selected 100 as a considerable sample size in both primary and secondary data. They also concluded that accountants need to be aware of the scope for both abuse of accounting policy and manipulation of transactions. Recommendations were made to show effective creative accounting techniques are to firm performance by freezing all existing accounting standards in the private sector is to be used as a basis for all future contracting and reporting.