The Role of Internal Audit as a Corporate Governance Mechanism in Limiting Creative Accounting Practices : The Case Study of Libyan Commercial Banks

English Abstract: The study aims to explore the creative accounting methods and practices used in Libyan commercial banks, and then to identify the effectiveness of the internal audit function in limiting these methods and practices. To achieve the aims of the study, the descriptive analytical approach was relied upon, and the questionnaire was used to collect information, which was distributed to the study sample in commercial banks in Misurata, which included internal auditors, branch managers and heads of departments in these banks.This study contributes by addressing the gap in existing knowledge related to the role of the internal audit function as a corporate governance mechanism in reducing the effects of creative accounting practices in Libyan commercial banks, by presenting new evidence from a developing country in order to suggest ways to enhance the effectiveness of the role of the internal audit function in reducing these practices. The findings of the study indicate that the participants of the study believe to some extent that the internal audit function is effective in Libyan commercial banks, and creative accounting practices are used for financial information manipulation, in these banks. The findings also show that the internal audit function contributes to reducing creative accounting practices in Libyan commercial banks