The Contextual Practice Framework of Positive Creative Accounting: A Grounded Theory Approach

Abstract

This study aimed to develop a positive creative accounting model that reflects the environmental characteristics, institutional requirements, and prevailing conditions of the national financial reporting system. This applied study adopted a qualitative, exploratory design grounded in the interpretive paradigm. A multifaceted grounded theory methodology and the systematic approach of Strauss and Corbin were employed to construct the proposed model. The participants consisted of 14 university professors, scholars, and experts with academic and professional experience in accounting and financial reporting. They were recruited during the first half of 2025 through purposive and snowball sampling. Data were collected through in-depth, semi-structured interviews, and sampling continued until theoretical saturation was achieved. The interview data were analyzed through open, axial, selective, and process coding. Trustworthiness was enhanced through prolonged interviews, participant confirmation of the researchers’ interpretations, audio recording and repeated examination of the interviews, parallel coding, and intercoder agreement assessment. The overall agreement between the coders was approximately 91%, indicating acceptable dependability of the coding process. The qualitative analysis generated six main dimensions and 16 core components. The central phenomenon comprised “informational value creation” and “responsible forward-looking reporting.” The causal conditions included evolving environmental requirements, limitations of conventional financial reporting frameworks, interpretive capacities of accounting standards, and the need to reduce information asymmetry. Strong corporate governance and internal controls, together with the technical and professional capabilities of financial teams, were identified as contextual conditions. Innovation-enhancing factors in financial reporting and barriers to responsible creativity constituted the intervening conditions. The principal strategies were the development of financial report content and the transformation of the financial reporting process. The anticipated consequences included deeper financial transparency, stronger accounting accountability, facilitation of long-term financial value creation, and improved financial decision-making quality. Positive creative accounting can redirect the flexibility and professional judgment embedded in accounting standards from potentially biased representation toward the responsible enhancement of the informational value of financial reports. Its effective implementation requires robust corporate governance, professional competence, appropriate internal controls, and redesigned reporting processes. The proposed framework provides a conceptual foundation for professional policymaking, financial reporting reform, and the improvement of transparency and stakeholder decision-making effectiveness.