Accounting process consists of dealing with many matters of judgment and of resolving conflicts between competing approaches to the presentation of the results of financial events and transactions; this flexibility provides opportunities for manipulation, deceit and misrepresentation. This study presented the frame work, short falls and motives for creative accounting in economic development. Descriptive analysis and inferences from existing literature on the effect of creative accounting was used to discuss the negative effects of creative accounting on global development. It was suggested that since the practice of creative accounting is completely deceptive and fraudulent the implementation of measures such as reducing the scope for choice of accounting methods by reducing the number of permitted accounting methods, thus specifying circumstances in which each method should be used. Also, the abuse of judgment can be curbed by drafting rules that minimize the use of judgment and prescribe consistency so that if a company chooses an accounting policy that suits it in one year, it will be forced to use the same method in future circumstances where the result may be less favourable.
