The Impact of Creative Accounting on Users of Financial Information – A Field Study from the Perspective of Academics and Employees in Commercial Banks in Benghazi

Abstract

This study aimed to determine the impact of creative accounting practices on users of financial information by examining how the flexibility of accounting policies and the practice of creative accounting influence the decisions made by these users. The study employed a descriptive-analytical approach, and the study population consisted of faculty members in the accounting departments at the University of Benghazi, as well as accountants, auditors, financial analysts, and commercial bank employees in the city of Benghazi. A stratified random sample of 115 subjects was selected, and an electronic questionnaire was used to collect data. The data were analyzed using the Statistical Package for the Social Sciences (SPSS) software, employing appropriate statistical methods—including arithmetic means, standard deviations, the t-test, and One-Way ANOVA. The study found a high level of creative accounting practices and a statistically significant impact of creative accounting—encompassing the dimensions of flexibility in accounting alternatives and policies, as well as the prevalence of such practices—on the credibility of financial information and the decisions of its users within the Libyan environment. The study recommended activating the role of supervisory bodies and accounting profession regulators in enforcing accounting standards, supporting the auditing profession, and promoting a culture of governance, transparency, and disclosure. It also recommended enhancing the proficiency of financial information users by organizing training courses for financial analysts and bank credit officers, in collaboration between the Central Bank of Libya and the Libyan Investment Authority.