Creative accounting was designed to show the company business, but nowadays creative accounting has another meaning and goes into manipulative accounting. It could be said that creative accounting in fact is an unauthorized adjustemnt of financial statements for the purpose of achieving the goals oft the company. Today, creative accounting means all the practices that present false financial statements for the purpose of misleading the public. The financial statements, as a main source of information about a company on which nomerous business decisions are made, should be reliable. The emphasis of this work is on the imortance of understanding the impact of creative accounting on the preparation and quality of financial statements and on the confidence oft he usres of financial statements. The aim of this work is to define creative accounting, to explain the motives and objectives of the application, tehniques and forms of creative accounting, the most common effect on certain items of financial statements and the possibilities of detecting of accounting manipulations. Also, the biggest accounting scandals in history are described, as well as an example from Croatia. Parallel with the development of creative accounting, accounting forensics which deals with fraud detection is being developed. At the end of the work, accounting forensics, basic concepts and specifics of accounting forensics, the area of interest, methods and methods of detecting fraud are defined.