This study investigated the link between creative accounting and corporate failures in Nigeria. Four objectives were set to guide the study visa viz: to investigate the effect of discretionary accrual management; real earnings management; income smoothing and tax avoidance on corporate failure of companies listed on Nigerian exchange group Plc. correlation research design was adopted and sampled of twenty companies was purposively engaged from the total of one hundred and seventy firms listed on Nigerian exchange group. The study covered the periods 2015 to 2022 while the secondary data used for the study were generated from annual reports and accounts of the firms sampled. Analysis was done using descriptive statistics, correlation analysis and regression estimation as was aided by e-view 9. Result from the empirical analysis indicates that all the independent variables of the study (discretionary accrual management, real earnings management, income smoothing and tax avoidance) have inverse and no significant relationship with corporate failures on Nigeria listed firms. The implication of the study therefore is that, although creative accounting has retarding effect on corporate failures, but it’s not strong enough to have caused the corporate collapse witnessed in Nigeria. The study then recommends amongst others that professional Accounting bodies like ICAN should intensify their efforts to promote ethical accounting practices among practitioners through regular training, workshops, and awareness campaigns.
Keywords: Income Smoothing, corporate failure, discretional accrual management, real earnings management, tax avoidance
