Creative accounting as one of the global tools for detecting fraud in Europe

University of Zilina, Faculty of Operation and Economics of Transport and Communications, Univerzitna 1, 010 26 Zilina, Slovakia

^* Corresponding author: poradova@fpedas.uniza.sk

Abstract

Research background: The issue of fraud is a real and not an exceptional phenomenon in today’s global economies. Fraud arises in businesses at different levels and from different motivations. However, with the development of fraud, methods are also being developed to help detect such fraud. Therefore, the present paper focused on creative accounting as one of the global tools for detecting these scams. The present paper consists of four parts. The first part deals with the issue of creative accounting. The second part describes fraud techniques such as “windows dressing”, “off-balance-sheet financing” and “earnings management”. The third part of the article consists of an analysis of the development of fraud detection in Central and Western Europe. The third part also includes a discussion. The fourth part deals with the conclusions on the issue.

Purpose of the article: describe the issue of creative accounting as one of the global tools for detecting fraud. One of the aims of this paper is also to analyse the development of fraud detection in Central and Western Europe.

Methods: In the processing of the present paper, a descriptive method, analysis, mathematical and statistical methods, graphic methods, comparison and synthesis were used.

Findings & Value added: provide an overview of the conditions for the creation of creative accounting, detection procedures, and the fight against creative accounting. The result of this article is a comprehensive view of the global frauds of Central and Western Europe.