Creative Accounting Practices in Nigerian Banks

Abstract

This study is an empirical investigation of creative accounting practices in the Nigerian banking industry. To achieve the purpose of this study research questions were raised, hypotheses were formulated, and a review of related literature was made. The population of this study consisted of 25 managers and 25 accountants drawn from the twenty-five (25) recapitalized banks currently operating in the Federal Capital Territory (FCT)- Abuja. In order to collect the necessary data for this study, the survey method of research design was adopted and the primary method of data collection was employed. The major instrument used for generating the primary data was the questionnaire, which was designed in five-response option of Likert-Scale. The data generated for this study were analysed through mean scores while the stated hypotheses were statistically tested with Z-test. Our findings revealed that) the major reason for creative accounting practices in Nigerian banks is to boost the market value of shares; users of accounting information are adversely affected by the practice of creative accounting;) accounting principles and rules should be streamlined to reduce diversities of professional judgment in financial reporting. Based on the above, it was recommended among others that creative accounting should be considered as a serious crime and therefore accounting bodies, law courts and other regulatory authorities need to adopt strict measure to stop the practice.Keywords: Creative accounting, Bank distress

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