CREATIVE ACCOUNTING, AN EXPRESSION OF THE
                        DISCONNECTION
               BETWEEN ACCOUNTING AND TAXATION


            Adrian Groşanu, Babeş-Bolyai University of Cluj-Napoca, Romania
         Paula Ramona Răchişan, Babeş-Bolyai University of Cluj-Napoca, Romania
         Sorin Romulus Berinde, Babeş-Bolyai University of Cluj-Napoca, Romania

ABSTRACT: In the context of a developed capital market, the dimensioning of the accounting
profit is very important for investors, considering the financing of the economic entities to a
higher degree than that offered by the banking system. We intend to emphasize some risks that
appear from the perspective of creative accountancy (an expression of the disconnection
between accountancy and taxation). The risks consist in some less ethical tendencies of
artificially oversizing and undersizing the accounting and the tax profit according to certain
objectives, risks that can be controlled through a better activity of accounting regulations. We
can say that the accounting result can be influenced in the case of a taxation connected ratio.
On the other hand, the accounting result is subject to an increasing risk due to the creative
accounting. Under these circumstances, a question appears: Which risk is better to be
assumed taking into account the dimension of the accounting result?

Key words: Financial Regulations, Accounting Result, Investors, True and Fair Value, Risks

JEL Cod: M41