CREATIVE ACCOUNTING IN COMPANIES IN B&H

Abstract

Financial statements as the outcome of the accounting system are represented structured view of the financial condition and financial success of the business of legal entity for a specified period of observation. Financial statements should show the accurate, true and fair the financial impact of transactions on the financial position, cash flows and the success of the legal entity, which is only possible with adequate and consistent application of the provisions of (IFRS) and related legislative framework for financial reporting. In a situation when the information presented in the financial statements do not correspond to the actual situation and the success of the company then published financial statements certainly do not achieve the mission given to them by the provisions of the IFRS, and thus do not help business decision makers. But on the contrary by presentation of an incorrect data lead them to wrong business decisions. In order to consider an exposure of entities in Bosnia and Herzegovina (B&H) from the risk of accounting frauds, empirical research was conducted with the intention of looking at the extent to which managers of companies in B&H use creative accounting techniques to impact on the reported financial position in the financial statements. The paper will be included the comparison between the most often accounting tricks that American author Howard M. Schilit recorded in the financial statements of American companies with the most commonly used techniques of creative accounting in B&H companies according to authors conducted research. Investors are expecting from the auditors disclosure of accounting frauds in companies whose financial statements are audited, but auditors did not meet the expectations of the public. Therefore, in recent times, the eyes of the public are directed towards forensic accountant, a new actor of accounting-auditing profession, whose main task is the investigation of fraud in the financial statements of companies. The paper provides an overview of the current state of development of accounting and auditing profession in Bosnia and Herzegovina, with a focus on the analysis of the possibility of acquiring the title of forensic accountants in B&H.