In: Business and Management. How would critical theorists assess research based on the Positive Accounting Theory? Accounting researchers tend to accept current accounting systems. Rather than focusing on why accounting systems favour certain classes of society, research is mainly carried out to such things as what accounting methods are most appropriate in certain circumstances, what motivates managers to use one accounting method over another and disclosure. By looking at accounting with a critical perspective is to recognise the way in which people are in control of capital.
Reflective Essay on Accounting Theory and Practice.
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Positive accounting theory PAT is a general term for any theory that provides descriptive information regarding the behavior of accountants. In looking at the apparent acceptance by politicians, firms and wide publication in academic journals PAT could easily be mistaken as being a success. A deeper analysis of the premises of PAT, its questionable scientific status, and the groups upon whom this theory has appealed to would suggest that it is flawed on many levels and is little more than an argument for deregulation and market capitalism. This opposes its claim to be a useful theory used regularly by those concerned with the effects of accounting policy on the status of the firm. The semi strong form of EMH argues that capital markets will reflect all information that is publicly available and it is this form that Watts and Zimmerman claim to be predominant. The Ball and Brown study rejected the argument put forward by normative theorists that present accounting results were misleading and irrelevant and stated that historical cost accounting is actually useful Deegan
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