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HI6025 Accounting Theory And Current Issue

tag 0 Download 9 Pages / 2,075 Words tag 14-07-2021

Question:

Watts and Zimmerman staked a claim to the term "Positive Accounting The-ory" for their particular theory. This paper considers positive accounting in the broader sense of a research program which aims at developing causal ex-planations of human behaviour in accounting settings; other examples than PAT exist in accounting.
 
The ontology and epistemology of such a program is examined. The logic of statistical hypothesis testing, while superficially analogous to Popper's falsification criterion, is much weaker. Although the broad positivist research program is potentially very powerful, it is being let down by deficiencies in practice.
 
Common problems are casual construction of theoretical models to be tested, undue reliance on the logic of hypothesis testing, a lack of interest in the numerical values of parameters, insufficient replication to warrant confidence in accepted findings, and the use of theo-ries as lenses to examine qualitative data rather than as explanations to be tested. Illustrations from good papers are considered.
 
As positive research is currently practiced in accounting, it seems largely incapable of achieving the scientific objectives. However, Kuhn's description of "normal" science fits positive accounting research quite well. The prospects are briefly discussed for a Kuhnian crisis and revolution, which might liberate positive accounting to achieve its potential. 
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