Using external audit to reduce the impact of creative accounting when adopting corporate governance

Samira Khaouari , Smain.Djouamaa

Abstract

Creative accounting in its general form represents the range of methods available within the accounting rules without exceeding them, but by exploiting the elements of flexibility and selection in these rules, and practiced by companies to improve the financial position and influence the impression of the users of the financial statements. These methods relate to the timing of operations or the estimation of accounts or disclosure or classification and presentation in the financial statements, and these methods make the information contained in the financial statements inappropriate to reflect a correct and fair image of a company unless certain disclosures are made. Perhaps the most dangerous aspect of creative accounting methods is not to put them such as accounting fraud, the responsibility of which lies with the auditor's responsibilities, but are acceptable accounting choices even if they affect the transparency and reliability of the financial statements.

        the auditor's responsibility for discovering creative accounting is still one of the most controversial issues facing the auditing profession. It can be said that it is one of the main reasons contributing to the so-called gap in expectations - the gap between what the community and the general public expect and what auditors do in accordance with generally accepted auditing standards