“Creative accounting is a systematic perversion of returns and properties of companies. The practice can be considered legal or illegal depending on its purpose.”

(Mohd Ali, Haron, Othman & Hasnan 2020)

Required:

(i)

Do you agree with the above statement? Discuss your answers by illustrating how creative accounting practices become legal and illegal. You need to provide examples

to support your answers.

(9 Marks)

(ii) Give suggestions on how to overcome creative accounting practices.