Prescribe how role of accountingPredict that manager paid
Bonuses etcExplain the effect of individuals cultural
backgroundInformation Accounting should provide to particular
stakeholders Relative power of stakeholders groupAccounting
information bring legitimacy to the organization
For Us?CuriosityVarious Accounting StandardUnderstand the
Accounting PracticesEvaluated the Accounting PracticesAccounting
TheoryAccounting Should be measuredAccounting information as
motivatesAccounting Methods for Motivates individualsTrue
Measure
Inductive Accounting Theories
Predictive Theory
Prespective (Normative) Accounting Theories
ACCOUNTINGACCOUNTING THEORIES
Example : Positive Accounting Theory vs Normative TheoryPositive
Accounting Theory of Watts and Zimmerman is opposed by the works of
various high profile researchers, such as:It has provided no
accomplishmentIt is marred by oversights, inconsistencies and
paradoxesIt is empty and commonplaceIt is a wasted effort
Normative Theory is tried to be undermine by Positive Accounting
Theorys proponents. They said that theory are :Not based on
observationUnscientificBased on personal opinion about what should
happen
WHAT SHOULD WE DO?
Accounting Theories are abstractions of realityPersonal Value
Judgement
