The Role of Corporate Governance Mechanisms in Reducing Creative Accounting Practices: A Field Study from the Perspective of Faculty Members in Accounting Departments at Libyan Universities in the Eastern Region

Abstract

 This study aimed to identify the role of corporate governance mechanisms in mitigating creative accounting practices, from the perspective of faculty members in accounting departments at Libyan universities in the eastern region. The study stemmed from the problem of the increasing prevalence of creative accounting practices and their negative impact on the credibility of financial statements and the quality of accounting information, particularly in light of reports from regulatory bodies indicating shortcomings in accounting and control systems within Libyan economic institutions.

The study employed a descriptive-analytical approach, utilizing a questionnaire as the primary data collection tool. A simple random sample of 72 faculty members from accounting departments at the universities of Benghazi, Derna, Omar Al-Mukhtar, and Tobruk was surveyed. Data were analyzed using the Statistical Package for the Social Sciences (SPSS), employing descriptive and inferential statistical methods, especially correlation coefficients and simple linear regression.

The study concluded that corporate governance mechanisms, taken together, have a statistically significant impact on reducing creative accounting practices. The results also showed a significant impact of audit committees, internal audits, and external audits on mitigating these practices. Internal audits had the strongest impact, followed by external audits, and then audit committees, reflecting the importance of activating these mechanisms in an integrated manner to enhance transparency and improve the quality of financial reports.

In light of these findings, the study recommends strengthening the application of corporate governance mechanisms, activating the independence and efficiency of audit bodies, and supporting the oversight role of audit committees. This will contribute to reducing creative accounting practices and enhancing confidence in accounting information within the Libyan environment.