The College of Administration and Economics at the University of Baghdad discussed , a master’s thesis in field of accounting by the student (Fadel Hussain Jawad ) and tagged with (The role of the external auditor in reducing creative accounting practices and its impact on tax evasion in Iraqi economic units ) , Under supervision of ( Assist.Prof. Dr. Salman Hussein Abdullah)
The problem of the research was the role of the external auditor in reducing creative accounting and its reflection on tax evasion, as the research aims to test this effect on the economic units operating in the Iraqi business environment. For the research sample from the different economic sectors for the year (2020-2021) according to the (Miller) model, and the second the researcher prepared a questionnaire form according to the five-point Likert-Scale, and it was taken into account when preparing its compatibility with the characteristics of the research community, and that the target community for this questionnaire They are the external auditors, audit offices and auditors in the Federal Office of Financial Supervision, and the researcher used a set of statistical methods to show the relationship between the research variables. Through his study, the researcher reached a set of conclusions and recommendations, which are as follows: Among the most important conclusions are as follows:-
1- Creative accounting is considered one of the great challenges for the accounting profession through the practices carried out by accountants in economic units operating in the private sector, taking advantage of their knowledge and experience. To achieve objectives, some of which serve the interests of the administration in a way that leads to an increase in tax evasion.
2- Creative accounting is often a process of manipulating accounting numbers by exploiting opportunities to get rid of compliance with accounting rules, measurement alternatives and disclosure applications to transfer financial data from what it should be to what the author of this data prefers.
3- The motives of management behind the use of creative accounting methods are some Internal motives related to the administration’s interest in maximizing profits to increase administrative incentives and rewards and maintaining administrative positions, and others are external such as reducing the amount of tax calculated on the economic unit for the purpose of tax evasion.
As for the most prominent recommendations, they are as follows:
1. Work to spread sufficient awareness about creative accounting, in order to explain its damages in reducing taxable incomes and thus limiting and fighting it with the right means.
2. Developing and training auditors on an ongoing basis, especially informing them of developments in the business environment and factors that may affect the clients’ financial positions, their business resources, or their ability to continue. Work to tighten control and follow-up on auditors’ offices, through the Investigation and Auditing Authority following up on the reports of certified accountants and seeking help, coordination and cooperation with the Association of Accountants and Auditors and informing it of every case of violations of auditors and accountants because of its great impact in refusing to organize accounts, and not approving accounts A fictitious account that leads to showing the taxpayers’ accounts as not being real with the aim of tax.
