ECONOMICS

Detailed explanation-1: -Accounting manipulation is defined as when the managers of an organization intentionally misstate their financial information to favorably represent the entity’s financial performance.

Detailed explanation-2: -Creative Accounting Practices (CAP), which are considered as one of the methods of accounting manipulation, have caused many international arrangements in the process of coming into existence with bankruptcies of big companies in global economic activity.

Detailed explanation-3: -Creative accounting consists of accounting practices that follow required laws and regulations, but capitalize on loopholes in accounting standards to falsely portray a better financial image of a company. Creative accounting techniques vary and evolve as regulations change to close the loopholes that allow them.

Detailed explanation-4: -The most widely used creative accounting techniques are: Manipulation of off-balance-sheet financing items.