Crime or Creative Accounting While Doing Business

Marta Stanisławska

Abstract

This paper investigates the creative accounting as a tool for enhancing the business activity. It is possible and legal binding to minimize tax liabilities and improve the financial statement. In Poland, there is a fine line between crime (tax fraud) and lawful practice. Qualitative research was conducted by asking businessman if there are practicing any creative accounting methods or tax optimisation (not tax evasion) to obtain funding from any external sources or to mitigate tax payments. The results of the research suggest that companies appreciate the legal methods of creative accounting, but they have concerns about committing a crime by the tax optimisation process. Polish judicial system do not introduce which actions are by law and which of them are illegal. Due to the legal nature of tax systems and economic freedom of individuals who do business the analysis of the possibility of applying financial manipulation methods without committing a crime seems necessary.