Assessing The Impact of Creative Accounting Practices On Corporate Failure in Selected Nigerian Manufacturing Firms

Abstract

There have been several cases of accounting and business scandals around the world which had attracted
criticisms of the quality of the information provided by corporate entities. This study examined the impact
of creative accounting practice on the corporate failure of selected Nigerian manufacturing firms. The
study aimed to examine the effect of Income smoothing on corporate failure in Nigerian manufacturing
firms. Also, the study investigated the relationship between artificial transactions and corporate failure in
Nigerian manufacturing firms. The research design of this study is a cross sectional survey and purposive
sampling research. The primary source of data for this study was obtained through a well-structured
questionnaire while secondary data were gotten from literature of past studies, libraries, newspaper and
online search engine. Five (5) manufacturing firms will be randomly selected from these two locations and
the sample included 50 managers and 70 accountants gotten from manufacturing firms operating in Ijebu-
Ode, Ogun state and Toll gate Ibadan, Oyo State. Total number of One hundred and twenty 120
questionnaire after thorough checks were distributed, while 100 of these questionnaire were retrieved after
confirming that they were filled properly and ready to be compiled for analysis. Ultimately, the findings
revealed that there is evidence of creative accounting in the manufacturing firms in Nigeria. It was
recommended that when making investment selections, the public should exercise caution and avoid relying
exclusively on the published financial statement due to the harsh techniques and gimmicks used by business
accountants.