THE ROLE OF CREATIVE ACCOUNTING IN "STIMULATING" FINANCIAL PERFORMANCE

The financial performance of an economic entity is its business card vis-à-vis its stakeholders, on the basis of which they make their investment, credit or other type of collaboration decisions. Information reflecting the financial performance is most often represented by the level of income and expense, the level of profit, the balance sheet asset and other intermediate and relative indicators deriving from them. The issue we are debating in this paper derives from the fact that the afore mentioned figures are easily influenced by creative accounting techniques, and the financial performance assessed on the basis of this information is thus misleading. In this context, this paper aims to present the negative effects of creative accounting, to exemplify some creative accounting techniques, and how these practices impinge on performance indicators, as well as to suggest ways to protect stakeholders against accounting manipulations.