CREATIVE ACCOUNTING AND SHAREHOLDERS' WEALTH

ABSTARCT

The main objective of this study is to investigate the effect of creative accounting on shareholders’ wealth, the study carefully examined the relationship between creative accounting and shareholder's wealth, how creative accounting affects shareholder's investment decisions, shareholders dividend and share price of a company. The conceptual research design was adopted in this study. Primary data was obtained from ten commercial banks in Benin City through the use of questionnaires. A total of 100 questionnaires were distributed, while 86 copies were retrieved and used in this analysis. Data Analysis was carried out using the ordinary least square regression method and the Statistical package for the social sciences (SPSS) 22.0 was used in the analysis of the data. The findings of the study show that there is a significant relationship between creative accounting and shareholders’ wealth, creative accounting affect shareholders’ investment decisions and there is a significant effect of creative accounting on share prices of a company and shareholders’ dividend. The study recommends that creative accounting among firms should be considered a serious crime, government and accounting regulatory authorities need to adopt strict measures to stop these practices and punish the offenders. The introduction of forensic accounting practice which can serve as an investigative function and experts witnessing in the Nigerian companies. Accountants in Nigerian industries should uphold the highest ethical standards and act with honesty at all times. It cannot be overstated how important a robust regulatory framework with strong enforcement tools is for guaranteeing adherence to accounting and auditing standards. Finally, in order to assure conformity with accounting and auditing standards, eliminate areas of accounting policy choice, and restrict the opportunity for questionable management judgment and assumptions.