Why do companies cook the books? Empirical study of the motives of creative accounting of Slovak companies

Michulek, Jakub; Gajanova, Lubica; Križanová, Anna; Blazek, Roman Article Why do companies cook the books? Empirical study of the motives of creative accounting of Slovak companies Administrative Sciences Provided in Cooperation with: MDPI – Multidisciplinary Digital Publishing Institute, Basel Suggested Citation: Michulek, Jakub; Gajanova, Lubica; Križanová, Anna; Blazek, Roman (2024) : Why do companies cook the books? Empirical study of the motives of creative accounting of Slovak companies, Administrative Sciences, ISSN 2076-3387, MDPI, Basel, Vol. 14, Iss. 7, pp. 1-16, https://doi.org/10.3390/admsci14070158 This Version is available at: https://hdl.handle.net/10419/320972 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Citation: Michulek, Jakub, Lubica Gajanova, Anna Krizanova, and Roman Blazek. 2024. Why Do Companies Cook the Books? Empirical Study of the Motives of Creative Accounting of Slovak Companies. Administrative Sciences 14: 158. https://doi.org/10.3390/ admsci14070158 Received: 1 June 2024 Revised: 16 July 2024 Accepted: 18 July 2024 Published: 22 July 2024 Copyright: © 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). administrative sciences Article Why Do Companies Cook the Books? Empirical Study of the Motives of Creative Accounting of Slovak Companies Jakub Michulek *, Lubica Gajanova, Anna Krizanova and Roman Blazek Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 1, 010 26 Zilina, Slovakia; [email protected] (L.G.); [email protected] (A.K.); [email protected] (R.B.) *Correspondence: [email protected] Abstract: Studies on creative accounting date back to the latter part of the 20th century. Creative accounting is still a big challenge in financial accounting. The problem of financial statement manipulation might be investigated, for instance, from an accounting, legal, ethical, or psychological perspective. This research aims to identify the main motives for the use of creative accounting and to find out whether corporate culture has an impact on the motives leading to the use of creative accounting. Data collection took place from 18 November 2023 to 18 December 2022. In the research, we used Pearson’s χ2 test to determine the dependence of the studied variables in contingency tables. Subsequently, correspondence analysis was used. The type of corporate culture does not have an impact on the motives that lead to creative accounting. It was proven that the type of corporate culture has an impact on the performance of creative accounting actions based on the request of a senior employee. The uniqueness of the research lies in the investigation of creative accounting from a psychological and managerial point of view in the territory of the Slovak Republic. Keywords: creative accounting; motives of creative accounting; employee behavior; corporate culture; sustainable development 1. Introduction Accounting can be defined as the most fundamental tool used to inform company stakeholders. However, businesses are sometimes reluctant to report the results of operations realistically (Aygun 2013). Improvement in a company’s competitiveness in both domestic and international markets requires precise and reliable statements (Hýblováet al. 2022). Accounting can be considered a mirror of all business activities carried out by companies and their employees. The resulting form of accounting statements is influenced by the different motives, interests, and goals of accountants, corporate management, and company owners (Drabkova and Pech 2022). Creative accounting has been studied since the second half of the last century. However, it achieved its greatest boom in scientific circles in the period before the financial crisis in 2007. The result was a reassessment of accounting, but also of the regulatory apparatus itself (Durana et al. 2022). According to Hlawiczka et al. (2021), creative accounting is a frequently used tool in economic crime. Creativity can be perceived as the art of seeking, adopting, and creating unconventional procedures, new ideas, and original solutions (Vartiak and Garbarova 2024). Jarah et al. (2022) understand creative accounting as the use of available accounting alternatives to beautify financial information. However, the issue of creative accounting is not only a problem at the corporate level. At the national level, Goto and Yamamoto (2023) note that EU nations who joined the Economic and Monetary Union (EMU) used creative accounting. At the subnational level, the mayor of Kadoma, Japan, acknowledged that the city had concealed the general account deficit from their negotiation counterpart’s citizens by using creative accounting before Adm. Sci. 2024,14, 158. https://doi.org/10.3390/admsci14070158 https://www.mdpi.com/journal/admsci Adm. Sci. 2024,14, 158 2 of 16 their merger negotiations. Governments have been known to use creative accounting, as demonstrated by these numerous instances, irrespective of their size. Reasons may include the improvement of profitability or the financial situation, or the achievement of own goals. Olojede and Erin (2021) claim that if the basic repression of revealing incorrect financial reporting failed in a company, the whole situation ended up being a big failure for the company. Creative accounting occurs when managers use their knowledge and knowledge of the rules of manipulation of data presented in the company’s financial statements without following the rules (Dias et al. 2016). As a result, creative accounting exists not because the contingency is disclosed in the notes rather than in the statement of financial position, but because of an entity’s judgment and arguments used to justify the likelihood of a possible obligation presented out of other liabilities. The effect may be comparable to concealing certain financing through off-balance-sheet financing processes (Lopes and Reis 2019). This may result in an inaccurate portrayal of a business’s financial performance, leading to judgments being made based on incomplete information. To stop these kinds of abuses, external auditors are essential in spotting and disclosing instances of creative accounting (Ozcelik 2020). Sufficient resources and time are necessary for auditors to carry out a comprehensive audit and reduce the possibility of missing innovative accounting techniques (Al Shanti et al. 2024). Managers pursue innovative accounting for a variety of reasons. The ‘positive accounting theory’ tradition justifies creative accounting by arguing that it contradicts mainstream ethics, is relevant to the US with a well-developed stock market and a focus on detailed accounting regulations rather than broad principles, and is less prevalent in other countries. Accountants who accept the ethical challenge posed by creative accounting must be cognizant of the potential for misuse of accounting policy choices as well as transaction manipulation (Amat et al. 1999). Tobi et al. (2016) state that in order to guarantee accurate financial reporting and lower the risk of creative accounting, companies can implement efficient internal controls in addition to working with external auditors. Additionally, regulators are essential in keeping an eye on and enforcing accounting regulations to make sure businesses follow GAAP. IA is thought to be an essential part of putting accounting procedures into place, which will help lessen the effects of creative accounting (Jarah et al. 2022). As part of research devoted to the creative accountant, researchers focus more on the causes, models revealing creative accounting, or the ethical side of the investigated issue. Overall, there is a lack of research dealing with the psychological aspect of creative accounting and the factors that lead to such activities. As part of our research, we focused on the influence of corporate culture on the motives of creative accounting and, at the same time, whether the types of corporate culture have an impact on the execution of creative accounting on the orders of a senior worker in companies operating in the territory of the Slovak Republic. With this scientific article, we try to fill the gap in scientific knowledge devoted to business factors affecting the performance of creative accounting activities. The aim of this research is to identify the main motives for the use of creative accounting and to find out whether corporate culture has an impact on the motives leading to the use of creative accounting. The article consists of six sections. The introduction serves to introduce the reader to the research question. In the literature review, we provide insight into the theoretical starting points and views of various authors dealing with the issue of creative accounting and corporate culture. The information presented in this section creates a theoretical basis for establishing hypotheses. Methodology clarifies the method of data collection, the methods used, and the individual steps of methodical research. The results section informs us about the scientific results of the survey. In the discussion, we compare the results of the scientific contribution with the results of other studies. The most important information, limitations, and future research are summarized in the last section, called the conclusion. Adm. Sci. 2024,14, 158 3 of 16 2. Literature Review According to Rahman et al. (2023), the application of sophisticated accounting knowledge and practices that are permitted by current laws and regulations is known as creative accounting. Management often changes accounting reports by utilizing strong creative accounting literacy. These techniques are commonly referred to as aggressive accounting, earnings management, or creative accounting. Creative accounting bypasses the spirit of the rules of standard accounting procedures and, at the same time, permutes accounting practice (Olojede and Erin 2021). It is challenging for investors to understand innovative accounting methods. As a result, even if their businesses were financially sound, corporations like Enron, World.com, and Arthur Anderson failed because of innovative accounting techniques. Furthermore, researchers have identified several additional causes for these collapses, such as inadequate financial reporting, improper use of financial data, a lack of corporate ethics, a company’s focus on the future without adding value, and subpar corporate governance procedures (Rahman et al. 2023). Companies need to adapt to the considerable changes in stakeholder pressure and information needs in recent years. Improved reporting quality is fueled by the necessity to give stakeholders transparency (Abed et al. 2022a). Bhasin (2015) therefore emphasizes that innovation is an essential part of creative accounting practices. Blazek et al. (2020) state that if companies engaged in such behavior, it was necessary to constantly hide these practices. In the article’s quantitative portion, Kallantary et al. (2024) found that intrinsic objectivity and the kind of ownership businesses are the two most important elements that influence the development of creative accounting in TSE enterprises. When defining creative accounting, authors typically distinguish between two practices: fraud intended to present an entity in a more favorable light and changing the value of goods by taking advantage of accounting standards that may not be targeted (Hýblováet al. 2022). Individual gain influences the control or manipulation of financial records, and earnings are simply manipulated to portray a more attractive picture of the organization. This is especially evident when financial records are handled unethically, outside of legal structures. To lawfully control revenues, creative management uses a variety of processes and strategies. Examples include property valuation, manipulation of reported sales and revenues, intentional accounting errors, earnings quality, and earnings management (Kováˇcováet al. 2022). Economic crime is linked to creative accounting, which is induced by, for example, tax optimization (Luty 2019). Economic crime can be viewed as a distinct type of crime with an expanding trend. Several global polls reveal significant corporate losses owing to economic crime. We live in an advanced age, which brings various technological and informational advantages that help to avoid detection for economic fraud more effectively. This encourages numerous businesses around the world to commit fraud, which has a negative impact on the whole business climate. The setting is then used by dishonest entrepreneurs, such as clever accountants, managers, and business owners who seek wealth. Such innovative accounting errors and fraud have major ramifications for business management. To counteract the use of creative accounting, it is crucial to identify not only the external variables that drive organizations to use it but also the internal ones, which are just as important for understanding the entire behavior related to the phenomena (Hlawiczka et al. 2021). Blazek et al. (2023a) address the importance of corporate governance in keeping creative accounting to a minimum. The authors discuss the ethical consequences of performing macroor micro-manipulation (at the level of regulatory agencies or the state) at the firm level. According to the authors, creative accounting techniques are ethically repulsive and are not fair to stakeholders, or they are an unjust exercise of power with the purpose of undermining regulators’ accounting authority. Four essential components of creative accounting were identified by Abed et al. (2022b): ownership structure, internal control, ethical considerations, and disclosure quality. Adm. Sci. 2024,14, 158 4 of 16 According to Gupta and Kumar (2020), while creative accounting is legal and acceptable around the world, it opens up gaps in the acts and rules governing the preparation of financial accounts, ultimately leading to financial crimes and harming the economy as a whole. Remenaric et al. (2018) identified personal gain, benchmarking, attracting investors, increasing, or maintaining the level of capital, gaining time to settle debts, or overcoming analysts’ estimates of the company’s future performance as the main motives of creative accounting. According to Smailovic et al. (2020), the motives for using creative accounting are different. They include motives ranging from the need to avoid paying taxes, to ensure more profitable business sales, to gain a better position with creditors and investors, or to realize bonuses and managerial privileges. A combination of lax monitoring, lax laws, incentive structures, and exorbitant top management compensation has resulted in opportunistic behavior that misleads the public, shareholders, and investors by promising the creation of false wealth through high-risk investments. Furthermore, recent empirical research has revealed that fraud and scandals are caused by “unethical behavior, agency problems, and unprofessional attitudes.” In the context of agency problems, CEOs and senior management could use “creative accounting” practices to ensure that higher priority debt is issued and dividends are increased; or embark on a higher risk project for higher wealth creation; or reduce prudent investing to show higher profits and please shareholders by paying higher dividends; or accept projects and investments exceeding the effective size of the organization; or a combination of any or all of these. Individuals with aggressive and opportunistic earning behavior may engage in any of these actions, which are termed unethical account activity (Politis 2015). However, these activities contradict the concept of sustainable development (SD). According to Agbedahin (2019), sustainable development can be defined as “development that meets current needs without jeopardizing future generations’ ability to meet their own needs”. Simultaneously, SD enables reasonable measures toward environmental integrity, economic sustainability, and a decent society for current and future generations, while protecting cultural diversity. From this, it can be concluded that the activities of creative accounting are in conflict not only with ethics but also with healthy economic viability and a just society, and thus contradict the two basic pillars, economic and social, of SD. Guo’s (2022) study is useful for governments encouraging private businesses to take social responsibility by developing competent successors for long-term economic development. The consequences of poor accounting practices indicate that tighter control of accounting conduct is required in relation to management succession. It also makes sense for private entrepreneurs, as the negative impact of poor accounting techniques on enterprises’ long-term financial success suggests that founders should use more acceptable methods to assist their grandchildren inherit the family business smoothly, rather than lowering returns. Mura et al. (2021) found that successors’ emotional intelligence influences their relationship management skills. As a result, successors cannot completely inherit and capitalize on specialized assets, even if they assume controlling positions in organizations, posing challenges to the long-term development of family businesses. Chebbi (2024), Le and Doan (2024), Amarna et al. (2024), Zhao and Zhao (2023), Salihi et al. (2023), Grimaldi et al. (2020), and Tran et al. (2016), among others, have all looked into the relationship between SD and unfair accounting practices. Numerous elements, including job security, market and analyst expectations, norm compliance, efficient financial variable management, and handling of acquisition and merger-related concerns, can foster creative accounting techniques. These reasons may also include asset misappropriation and fraud concealment. Companies should set up trustworthy internal control mechanisms, moral standards, and open financial reporting to stop these behaviors (Dixit and Shukla 2023). Al Shanti et al. (2024) mentioned that, more crucially, managers frequently purposefully alter the financial statement with approval from a higher authority to outperform rivals in the market. According to Hýblováet al. (2022), the primary areas that are modified in financial statements are the overvaluation of Adm. Sci. 2024,14, 158 5 of 16 assets and revenues, the undervaluation of liabilities and expenses, the failure to utilize allowances and provisions, and the non-compliance with the accrual principle. The significance of organizational climate and culture is in their ability to promote job satisfaction, integrity in production, and appropriate productivity management (Vi ¯ dak et al. 2023). Li et al. (2023) confirm that the individual psychological component of power distance disposition is strengthened by market and hierarchical cultures, is interpreted as obedience or conformity to the parties, and initiates immoral pro-organizational behavior. Albahri et al. (2023) state that to properly handle data variations, it is necessary to consider the different organizational culture characteristics that affect success, assign significance weights to each characteristic, and acknowledge that different organizational cultures may excel in different areas. Service decision-makers indicated a blended and frequently reactive approach to employing evidence, with the type and source of evidence employed depending on the topic at hand, according to Calnan and McHugh (2023). There are several levels at which barriers and facilitators to the use of research can be found: personal (time); organizational (culture, access to research, resources, and skills); research (quality, relevance); and social, political, and economic (funding, political will, external connections with universities). Participants suggested synthesizing key research messages, bolstering connections with institutions, and encouraging more embedded research as ways to improve evidence-informed decisionmaking. Sankar (1988) states that mapping the values and ethical presumptions that make up the dynamic components of an organizational culture is necessary for effective strategic management of that culture. Consequently, tactics for preserving, enhancing, and altering culture must center on the organization’s value system. We can assess the dynamics of values in corporate culture by using a framework that is based on our knowledge of values and how they relate to other aspects of an individual’s psychological system, such as beliefs, goals, attitudes, ethics, and behavior. Values embedded in the organizational culture impact how circumstances and issues are perceived, how decisions are made throughout the entire process, and how ethical behavior in decision-making is limited. The ethical premises used in decision-making are taken from the hierarchy of values. Adamikova and Corejova (2021) point out that if a company applies devices that are in violation of the law, this leads to criminal activity. Legal uncertainties can be exploited by accounting managers to present the company’s financial status in a way that aligns with their preferences, even while creative accounting procedures are not always regarded unlawful or in violation of the law (Kováˇcováet al. 2022). Consequently, the idea of creative accounting is connected to both general ethics and accounting ethics norms (Faruq 2014). The ethics of accounting information manipulation were discussed, for example, by van Helden et al. (2023). According to Tassadaq and Malik (2015), there is evidence in the literature that suggests that the primary cause of unethical settings in organizations is the inclination of certain managers to prioritize short-term advantages. This, in turn, encourages bad financial reporting. According to Skoda and Vyklyuk (2018), managers’ attitudes were the main cause of creative accounting. Their study suggested that the managers’ moral conduct had a big impact on the caliber of financial reporting. Choi and Pae (2011) and Akenbor and Tennyson (2014) stated that corporate and managerial ethics have an impact on the caliber of financial reporting. Following that, alternative hypotheses were established using the following language: H1. The type of corporate culture has an impact on the motives that lead to creative accounting. H2. The type of corporate culture has an impact on the performance of creative accounting actions based on the request of a senior employee. Adm. Sci. 2024,14, 158 6 of 16 3. Materials and Methods This research aims to identify the main motives for the use of creative accounting and to find out whether corporate culture has an impact on the motives leading to the use of creative accounting. Data for the research were collected through an online Google Forms questionnaire. The questionnaire was intended for employees of the economic or accounting departments of companies operating in the territory of the Slovak Republic, between the ages of 18 and 64, which represents the working-age population of the Slovak Republic. Companies from all 23 areas of SK NACE were approached, while the questionnaire was filled out by companies from 18 industries. Data collection took place from 18 December 2023 to 18 January 2024. The number of inhabitants between the ages of 18 and 64 was determined from the website for the 2021 Census of Population, Homes, and Apartments, www.scitanie.sk. After supplementation, we had a sample size of 386 respondents. The data were subsequently processed using two programs, MS Excel and IBM SPSS Statistics 25. As part of the research, we worked with contingency tables, Pearson’s χ2 test, and Cramer’s V coefficient, and if dependence was confirmed, we used correspondence analysis. Dependence between qualitative features was expressed by association and contingency. The basis for examining the dependence or independence of two qualitative characteristics is to determine the frequency of all combinations of values that both variables acquire. The most frequently used test for contingency tables is Pearson’s χ2 test. This test was run with a significance level of 0.05. A crucial tool for accurately evaluating study findings is statistical testing. The objective of the research, the hypothesis, and the data all affect how the statistical test is determined (Turhan 2020). The observed and expected cell values of a contingency table are compared using Pearson’s chi-square test. To find evidence that the distribution of occurrences of one variable across levels of another is different from what would be predicted by chance, an independence test is most frequently employed. A table or computer program’s chi-squared probability for a given value is compared to the Pearson test statistic, which is computed as follows: first, the expected values are calculated for each cell of the table based on the observed values, assuming that the two variables are independent; second, the observed minus the expected values are squared and divided by the expected values for each square and summed across the squares; and third, the Pearson test statistic is computed. A wide range of data expressed in contingency tables can be subjected to Pearson’s chi-square test; however, the test requires that the data be: (1) a simple random sample, (2) large enough to provide sufficient predicted cell counts, and (3) independent of one another (Hess and Hess 2017). According to Camilli and Hopkins (1978), the reason for using a chi-square test is that the test finds if there is any correlation between non-numerical variables. After testing of established hypotheses, Cramer’s Vwas used if the dependence was confirmed. V=sx2 n·min{r−1; s−1}(1) where x 2 is the test statistic from Pearson χ2 test, nis the number of total observations, ris the number of rows, and sis the number of columns (Blazek et al. 2023b). C=sx2 n+x2(2) The value of Cramer’s Vdetermines the strength of dependence. The strength of dependence according to the value of Cramer’s Vis shown in Table 1. Adm. Sci. 2024,14, 158 7 of 16 Table 1. The value of Crame’s V. Value of Lower Limit Value of Upper Limit Strength of Dependence 0.0< ≤0.3 Weak dependence 0.3< ≤0.8 Medium dependence 0.8< ≤1.0 Strong dependence Source: Own processing. Four fundamental issues are resolved through correspondence analysis. In other words, how do the various levels of the column variable’s categories of the row variable compare and contrast to one another? How do the various variants of the row variable affect the similarities and differences between the categories of the column variable? What is the relationship between the row and column categories? The final query is can we graphically represent this relationship in a smaller-dimensional space? Majerova (2020) states that the following steps should be followed to calculate the correspondence technique and indicate it with symbols: The r-membered vector of row loads is represented by the symbol r, the s-membered vector of column loads by the symbol c, and the relationships between them are described as demonstrated by Equations (3) and (4). If we designate the matrix of row profiles by the symbol Rand the matrix of column profiles by the symbol C: R=D−1 rP=      rT 1 rT 2 . . rT r       (3) C=D−1 cPT=c1c2. . cs(4) where vector relements are found on the diagonal of D−1 r and vector celements are found on the diagonal of D−1 c . This form (Formula (5)) can then be used to create the correspondence matrix. P r cT1=       p11 p12 . . . p1sr1 p21 p22 . . .. . . pr1 c1 pr2 c2 . . . p2sr2 · · · . . .. . . . . . . . . prs cs rs 1        (5) The following relations apply to the vector of row loads rand to the vector of column loads cas Formula (6). r= s ∑ j=1 p+j·cjc= r ∑ i=1 pi+·ri(6) A correspondence map is produced by graphing the dependence structure of two discrete variables. It displays three fundamental geometric ideas. The profile provides information on the location’s coordinates (positions). Distance between points indicates their degree of proximity, whereas mass indicates the weight that has been ascribed to each point (Blazek et al. 2023b). 4. Results The minimum sample for the research was set at 386 respondents. In total, we collected 396 responses from employees of Slovak companies aged 18 and over. Figure 1shows the number of respondents by region. The largest number of respondents came from the Zilina region, 75, which represents 18.94%. The Bratislava region had the second highest number, 74 (18.69%). A total of 48 respondents came from the Trnava and Nitra regions, which Adm. Sci. 2024,14, 158 8 of 16 represents 12.12%. The Trenˇcín region had the smallest representation with 34 respondents, which represents 8.59%. Adm. Sci. 2024, 14, x FOR PEER REVIEW 8 of 16 4. Results The minimum sample for the research was set at 386 respondents. In total, we collected 396 responses from employees of Slovak companies aged 18 and over. Figure 1 shows the number of respondents by region. The largest number of respondents came from the Zilina region, 75, which represents 18.94%. The Bratislava region had the second highest number, 74 (18.69%). A total of 48 respondents came from the Trnava and Nitra regions, which represents 12.12%. The Trenčín region had the smallest representation with 34 respondents, which represents 8.59%. Figure 1. Multiplicity of respondents according to region. Source: Own processing The first hypothesis was established as follows: the type of corporate culture has an impact on the motives that lead to creative accounting. For this reason, it is necessary to look at the frequency of individual motives from the point of view of the type of corporate culture. As seen in Table 2, one motive prevails in all types of cultures, namely increasing the competitiveness of the company. Table 2. Multiplicity of motives of creative accounting according to company culture. Crosstab Which of the Following Motives Would Lead You to Use Creative Accounting? Total Attracting Investors Beating Analysts’ Estimates of the Company’s Future Performance Getting Time to Settle Debts Increasing or Maintaining Capital Levels Increasing Personal Profit Increasing the Competitiveness of the Company Adhocracy 10 9 10 8 7 16 60 Clan 11 16 20 16 26 35 124 Hierarchy 25 13 15 26 14 32 125 Market 12 12 15 17 13 18 87 Total 58 50 60 67 60 101 396 Source: Own processing. The result of Pearson’s χ2 reached a value of 0.356 (see in Table 3), which is a value greater than the level of significance α. For this reason, we must reject the alternative hypothesis H1, which means that the type of corporate culture has an impact on the motives that lead to creative accounting. For this reason, it does not make sense to examine the strength of the dependence, as it does not exist, and at the same time, the condition for conducting a correspondence analysis is not met. Figure 1. Multiplicity of respondents according to region. Source: Own processing. The first hypothesis was established as follows: the type of corporate culture has an impact on the motives that lead to creative accounting. For this reason, it is necessary to look at the frequency of individual motives from the point of view of the type of corporate culture. As seen in Table 2, one motive prevails in all types of cultures, namely increasing the competitiveness of the company. Table 2. Multiplicity of motives of creative accounting according to company culture. Crosstab Which of the Following Motives Would Lead You to Use Creative Accounting? Total Attracting Investors Beating Analysts’ Estimates of the Company’s Future Performance Getting Time to Settle Debts Increasing or Maintaining Capital Levels Increasing Personal Profit Increasing the Competitiveness of the Company Adhocracy 10 9 10 8 7 16 60 Clan 11 16 20 16 26 35 124 Hierarchy 25 13 15 26 14 32 125 Market 12 12 15 17 13 18 87 Total 58 50 60 67 60 101 396 Source: Own processing. The result of Pearson’s χ2 reached a value of 0.356 (see in Table 3), which is a value greater than the level of significance α . For this reason, we must reject the alternative hypothesis H1, which means that the type of corporate culture has an impact on the motives that lead to creative accounting. For this reason, it does not make sense to examine the strength of the dependence, as it does not exist, and at the same time, the condition for conducting a correspondence analysis is not met. Table 3. Chi-square test for H1. Chi-Square Tests Value df Asymptotic Significance (2-Sided) Pearson Chi-Square 16.407 a 15 0.356 Likelihood Ratio 16.641 15 0.341 No. of Valid Cases 396 a. There are 0 cells (0.0%) that have an expected count of less than 5. The minimum expected count is 7.58. Source: Own processing. 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