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Abstract
This study evaluated the effect of creative accounting on stakeholders’ wealth of banks listed on Nigeria Stock Exchange (NSE) from 2010-2019. Discretionary accrual was used as a proxy to measure creative accounting practices. The research used inferential statistics to examine the major practices of creative accounting that influenced stakeholders’ wealth in commercial banks. A sample of thirteen banks (13) was drawn using purposive sampling technique. Linear regression technique was used to analyze the relationship between creative accounting practices and stakeholders’ wealth and the correlation between the variables. The secondary data were collected from NSE fact books, financial statements and the website of quoted banks that were sampled. E-Views 10.0 was used in carrying out the regression analysis to establish the relationship between creative accounting practices and stakeholder’s wealth. Stakeholders’ wealth was measured using return on equity and return on capital employed. The study found that discretionary accruals negatively affects return on equity, however, significant; and a non-significant positive effect of discretionary accruals on return on capital employed. Thus, this study recommended amongst others that organizations should encourage ethical behavior in the company by educating and creating awareness on the importance of ethical behavior and accounting ethics. Keywords: Discretionary Accruals, Return on Equity, Return on Capital Employed