There are numerous allegations that creative accounting by management of listed corporations do not end. To the extent that these practices distort the underlying reported financial performance of firms, they conflict with the basic objectives of financial reporting to provide consistent and comparable financial information to users for making economic decisions.

Required:

Critically discuss that the objective of financial reporting is not being met and that accounting information is not credible, reliable or useful because of the problems of subjectivity in financial statements due to the application of judgements and assumptions, and creative accounting.