Creative accounting: the auditor effect

Abstract

Terry Smith’s infamous Accounting for Growth (1992) clearly demonstrated the differences in the use of accounting policy manipulations, impacting on profit and loss account and balance sheet for companies and industries. Now evidence has emerged in Australia (Smith et al., 1997), of differences in the acceptability of income increasing accounting policy changes which appear to be associated with auditors and auditor groupings. This paper re‐examines Smith (1992) to determine the existence of an auditor effect for UK accounting manipulations.

Citation

Smith, M. (1998), "Creative accounting: the auditor effect", Managerial Auditing Journal, Vol. 13 No. 3, pp. 155-158. https://doi.org/10.1108/02686909810208047