Creative Accounting versus Aggressive Accounting – Exploring Specific Dimensions

Abstract

In business practice, there is a statement that creative accounting refers to actions within the scope of accounting law that are legally prohibited. In other words, it encompasses all bookkeeping activities that distort the financial and asset situation of an economic entity. This, therefore, contradicts the principle of a true and fair view mandated by the Accounting Act of September 29, 1994, which requires entities to present their financial results in accordance with their actual state. However, in the literature on the subject, these actions are not designated as creative accounting but as aggressive accounting. Furthermore, creative accounting is presented as a positive phenomenon in accounting systems. Hence, the diversity of interpretations of these terms in both the literature and business practice has become a basis for their systematization. The aim of this article is a comparative analysis of creative accounting and aggressive accounting, as well as presenting the results of original survey research regarding the knowledge and correct interpretation of these terms within the accounting community.