Creative Accounting Practices and the Credibility of Financial Reports: An Empirical Study on the Jordanian Commercial Banks

Abstract

This study examines the impact of creative accounting practices on the credibility of financial reports in Jordanian commercial banks. It highlights the use of innovative accounting techniques and manipulative strategies employed by firms to present accounting information misleadingly, thereby influencing the judgments of financial statement users. The research aims to investigate the influence of these practices on the reliability of financial reporting in Jordanian commercial banks. A questionnaire was developed and distributed to senior and middle management as well as workers in Jordanian commercial banks, with 51 usable responses out of 80 participants. The findings reveal a negative impact of creative accounting practices on the credibility of financial reports in Jordanian commercial banks. The study concludes by recommending that regulatory bodies in Jordan adopt policies to detect and address creative accounting methods in financial statements and develop deterrent laws with penalties and sanctions for those engaging in harmful techniques in creative accounting.