<p>According to agency theory ‘the firm is a legal fiction which serves as a focus for a complex process in which the conflicting objectives of individuals are brought into equilibrium within a framework of contractual relations.’ Within the agency framework, it is both logical and inescapable that management behaviour will be self-serving. Agency can, therefore, provide a solid framework for the understanding of creative accounting behaviour. The informational perspective is a key element underpinning the study of the creative accounting phenomenon. A conflict is created by the information asymmetry that exists in complex corporate structures between a privileged management and a more remote body of stakeholders. Managers may choose to exploit their privileged position for private gain, by managing financial reporting disclosures in their own favour. The informational perspective assumes that accounting disclosures have an information content that possesses value to stakeholders in providing useful signals. It may be difficult or impossible for individual stakeholders to discern the fact and the effect of accounting manipulation, because of an insufficient personal skill set, indifference or an unwillingness to engage in detailed analysis. Corporate governance encompasses all the provisions and mechanisms that guarantee the assets of the firm to be managed efficiently and in the interests of the providers of finance, mitigating the inappropriate utilization of resources by managers or any other party to the firm. Financial reporting is the primary medium of communicating the workings and results of the operations of the company to its stakeholders. Use of creative accounting negatively affects the usefulness of financial reporting and ultimately affects the spirit of corporate governance. The study has been undertaken with the broad objective of determining the existence of creative accounting among the companies selected for the study and also to find an association in between Agency Theory of corporate governance and creative accounting. The study covers the companies listed in the NSE.</p>