Creative Accounting and Managerial Decision on Selected Financial Institutions in Nigeria

The study was conducted to appraise the impact of creative accounting on managementdecisions of selected companies listed in the Nigerian Stock Exchange. With the background,the main objective of the study includes the examination of the extent to which macromanipulationof financial statement affects management decisions; to examine the extent towhich macro-manipulation of financial statement affects share price performance; and todetermine the impact of misreported assets and liabilities as well as makingrecommendations to help remedy some of the problems.The research method used was descriptive and the primary data collected were summarizedand tabulated. These were picked in line with the hypotheses variables of the study so as todetermine their validity. The model adopted for analysis of data was the multiple recreationanalysis. It was observed that the application of creativity in financial statement reportingsignificantly affects the decision of management to recapitalize the firm upward or dispose ofit reserves. The study concluded that creative accounting through macro-manipulation offinancial statements affects a firm’s price and capital market performance. In view of thestudy, the researcher recommended that the application of creative accounting onmanagement decision should be to avoid misreporting of assets and liabilities in theirfinancial report, and that management decision towards creative accounting should begeared towards the relative advantage principle and good corporate governance whichencourage challenges to current ways of thinking and not manipulating for self interest.