Overview
ABSTRACT
As any information system , accounting remains in constant evolution. The elements supplied, and which are the subject of an analysis, are ambivalent.
On the one hand, the consolidated financial statements which intend to give a more economic and realistic picture of financial health of groups are regulary modified to improve it.
On the other hand , creative accounting , aims to distort "legally" financial information in order to agree, first of all, with firm interests. This creative accounting presents risks increasingly important. As any information system , accounting remains in constant evolution. The elements supplied, and which are the subject of an analysis, are ambivalent.
On the one hand, the consolidated financial statements which intend to give a more economic and realistic picture of financial health of groups are regulary modified to improve it. On the other hand , creative accounting , aims to distort "legally" financial information in order to agree, first of all, with firm interests. This creative accounting presents risks increasingly important sometimes difficult to detect,
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Bernard CHRISTOPHE: University Professor – IAE d'Amiens
INTRODUCTION
Accounting is an information system. Like all information systems, it is only effective if you can read it. However, the accounting information provided by companies can take slightly different forms from those which, in theory, we are entitled to expect. On the one hand, there are the consolidated accounts, which are governed by special rules, and on the other, we have been witnessing for several years the development of what is known as creative accounting.
In a way, we could say that creative accounting and consolidation are the direct consequences of the evolution of the economy, whose contradictions they also illustrate.
The systematic presentation of consolidated financial statements by large and medium-sized companies stems not only from the application of legal texts (notably the 1985 law), but also from developments in the financial markets. Disintermediation, in particular, has encouraged companies to go directly to the markets to raise the capital they need. In return, they need to provide better information, and the presentation of consolidated financial statements is one way of doing this.
On the other hand, it can be argued that accounting creativity owes its development mainly to the proliferation of financial engineering techniques. However, these techniques are linked to the evolution of financial markets and, if translated into accounting terms, can lead to a reduction in the quality of information, if we are not careful.
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KEYWORDS
finance of company | business management | accounting | financial analysis | creative accounting
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Industrial management
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