Abstract

This research study investigates the effect of creative accounting on the performance of deposit money banks in Nigeria. A sample consisting of five deposit money banks in Nigeria for the period of ten years from 2007-2016 was used. The results of the study using multiple regressions revealed that, non- performing loans do not significantly affect banks performance. It also revealed that total accrual has no significant effect on performance of Nigeria deposit money banks while Gross earnings has a significant positive effect on the performance of Nigeria deposit money banks. It would be unrealistic to think that creative accounting practices among banks do not have any positive effect at all, but it is possible to minimize at least its negative effects by adopting International Financial Reporting Standard (a new standard), which gives more importance to ethical considerations and decrease the flexibility of bank managers in deciding among different accounting methods. This would improve the quality and further reduce misstatements of financial statements.