1 ACCT3003 Issues in Accounting Theory Topic 5 Positive accounting theory.
Accounting theory and accounting research
-
Upload
mhd-heickal-pradinanta -
Category
Economy & Finance
-
view
460 -
download
8
Transcript of Accounting theory and accounting research
![Page 1: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/1.jpg)
Accounting Theory and Accounting Research
Nyoman Ardiantha Putera R.M./344132Muhammad Heickal Pradinanta/350168
![Page 2: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/2.jpg)
Scientific Method
• A body of technique for investigating Phenomena, acquiring new knowledge, or correcting and integrating previous knowledge. A theory, that must contain a basic set of premises (assumptions or postuiates)
![Page 3: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/3.jpg)
Research Approaches
• Deductive Reasoning: Logical reasoning is used.
eg: Premise 1= Snakes are reptilesPremise 2= Reptiles are cold-
blooded Conclusion= Snakes are cold-
blooded
![Page 4: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/4.jpg)
• Inductive Reasoning: analyzing the logic of a set of sentences not simply by its internal logic.
Eg: The cost of goods was $2.00. The cost of labor was $1.00. The sales price is $6.00 per unit; so the item always provides good profit.
![Page 5: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/5.jpg)
Normative (prescriptive) Theory• Employ a value judgement, containing
at least one premise saying that this is the way things should be
eg: Conceptual frameworkDeductive system are often normative.
![Page 6: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/6.jpg)
Descriptive Theory• Attempt to find relationships that
actually exist. Inductive approaches usually attempt to be descriptive
![Page 7: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/7.jpg)
Global and Particularistic
Theories• Global (macro) theories
Deductive reasoning
• Particularistic (micro) theories Inductive reasoning
![Page 8: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/8.jpg)
Directions in Accounting Research1. Decision-model approach2. Capital market research3. Behavioral research4. Agency theory5. Information economics6. Critical accounting
![Page 9: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/9.jpg)
The Decision-Model Approach
• Asks what information is needed for making decisions
• Does not ask what information users want• Orientation is normative and deductiveThe main decisions embraced by the decision-model approach:1. Enabling the user to better predict future cash flows2. Analyzing the efficiency and effectiveness of
management
![Page 10: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/10.jpg)
Capital Market Research
• Efficient-Markets Hypothesis (EMH) : market prices reflect fully all publicly available information
• EMH has significant implications for accounting
• Difficult
![Page 11: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/11.jpg)
Behavioral Research• Focus on how users of accounting
information make decisions and what information they need
• This approach is descriptive or positiveDivided into 2 types:1. Behavioral2. experimental
![Page 12: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/12.jpg)
Agency Theory• Deductive/Inductive• Enterprise as the locus or intersection
point for contractual-relationships (eg: management, owners, creditors, and government).• Concerned with various cost of
monitoring and enforcing relations among the group.
![Page 13: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/13.jpg)
Information Economics
• Analytical/deductive• To determine how contractual
arrangement incentives and risk sharing can be negotiated
![Page 14: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/14.jpg)
Critical Accounting• Concerned with the active social role of
accountant• An Amalgamation of public interest
accounting and social accounting
![Page 15: Accounting theory and accounting research](https://reader033.fdocuments.net/reader033/viewer/2022061516/58ec82fd1a28ab49528b45e5/html5/thumbnails/15.jpg)
THANK YOU!