Tax Avoidance and Evasion as a Factor Influencing ‘Creative Accounting Practice’ Among Companies in Kenya

Abstract

Creative accounting is carried out with an objective of making the company appear to be financially stronger or weaker depending on the management’s aspirations. This practice is considered professionally unethical in Kenya even though in some countries it’s permitted by law. This study singled out Tax avoidance and evasion as one of the major factors influencing creative accounting practice in Kenya. The researcher randomly collected and analyzed data from thirty six accountants working for various companies in Kenya. The results of the study established that tax avoidance and evasion is indeed one of the major factors contributing to practice of creative accounting among companies in private sector in Kenya