Navigating Financial Integrity: The Role of External Audits in Mitigating Creative Accounting Practices

This research focuses at the effect of external audits in reducing creative accounting techniques and increasing financial statement transparency. The study examines the efficiency of external auditing procedures across various regulatory regimes, as well as the ethical difficulties within the auditing profession, using a thorough evaluation of current literature that includes comparative, aligned, and argumentative studies. Method The research uses a qualitative analytical technique to synthesis results from secondary data sources such as academic publications, regulatory reports, and case studies. This technique enables a comprehensive knowledge of the relationship between external audits and creative accounting across different regulatory regimes. Findings The study shows that the rigour of the regulatory environment, auditor independence, and adoption of international accounting standards all have a substantial impact on the efficacy of external audits in reducing creative accounting methods. Furthermore, ethical issues, especially those involving auditor independence, emerge as key variables in safeguarding the integrity of the audit process. Conclusion External audits are critical in limiting innovative accounting methods, but they need strong regulatory control, auditor independence, and ethical norms within the profession. To improve the efficacy of external audits, the report suggests improving regulatory frameworks, increasing auditor independence via institutional processes, encouraging worldwide norm harmonization, and cultivating a culture of openness and ethical practice. These procedures are critical for enhancing the legitimacy of financial reporting and preserving confidence among investors in financial markets.