Global Journal of Economic and Finance Research

Creative accounting has become a major concern in the contemporary accounting environment, with ongoing controversies regarding its effects on the financial performance of firms, particularly among listed non-financial companies in Nigeria. Evidence from prior studies suggests that many global accounting scandals are rooted in creative accounting practices. This study examined the effect of creative accounting practices on the financial performance of non-financial companies listed on the Nigerian Stock Exchange. A quantitative descriptive research design was adopted, and data were obtained from 11 non-financial firms that consistently published audited annual financial statements between 2010 and 2019. Creative accounting was measured using frequent changes in inventory structure and accrued expenses, while financial performance was proxied by return on assets (ROA). Panel regression analysis was employed for data analysis. The findings revealed that changes in inventory structure had a positive and statistically significant effect on financial performance (β = 0.251; p < 0.05). The study concludes that creative accounting practices significantly influence the financial performance of non-financial firms and constitute an important determinant of organizational performance.

Creative accounting practices, Financial performance, Stakeholder theory, Nigerian listed non-financial companies, Return on Assets.

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