Accounting Theory
Over the year, the world scholars continue to evaluate the economics of the world to understand their functioning. In this course, they developed the subject of accounting to assess the frameworks of financial principles. The accounting theory in discussion involves reviewing the historical foundations of financial reporting and creating new models of reporting the financial developments and exchanges (ichards, 2009, p. 17). Accounting theory evolves continually; thus, there are various theories and principles of accounting in practice within the world economics. These theories, in the process of developing them, the scholars expressed a desire to help enhance understanding of economics.

Positive Accounting Theory in neo-liberal ideology to solve problems of society

Positive accounting theory is one theory in accounting that resorts to explaining actual accounting practices, and predicting the future accounting practices. In this theory, it shows the essence of practicing certain accounting theories and the reason they are popular. In….

Accounting Theory
Why accounting research has had so little impact on preventing such failures in accounting practice?

The modern economic society has seen many scientific researches that have been directed at establishing the nature of performance of economic activities. The present world is a literate society that depends on the technicalities of life and assumption of activities as they happen in the natural society. In order to have a genuine avenue of relaying the facts between the research activities and the real happenings in the ground, several studies have been conducted across the varied advocacies of life. The entire society has been established under a summative approach that has ensured an equitable and pleasant avenue of relaying between the real standards of the economy together with the variations in the avenues of deploying and exemplifying what can be done in the society (ClarkE et al., 2003, p. 54).

Accounting research has been beefed….

This is often referred to as the "acid test." The standard range is 1.8:1 for a young company versus.9:1 for a more developed company. Using these benchmarks gives banks a frame of reference from which to measure.
Other indicators to banks include comparing the % of the Cost of Goods Sold on the income statement to industry averages. This gives an indication of the firm's profit margin with regard to its competitors. Operating expenses may also be examined, not only overall but by type of spending. For instance, is the company adequately staffed during peak cycles? Overstaffed during slow cycles? Is some spending preventable or reducible?

One type of expense that is often examined more closely is administrative expense. Administrative expense is largely fixed and generally not directly attributable to generating sales. There are standard measures by industry for appropriate ranges. Exceptions may include start up costs or capital upgrades.

Lastly, inventory….

Accounting
Policy Setting Using Ex-Ante and Ex-Post Accounting Techniques

Firms make contracts every day because they are required to gain assets that would be costly for them to obtain otherwise. At one time these contracts were made from an opinion-based accounting model called normative theory. Many departments used this theory because they believed that they could use the knowledge that they had gained to make accurate guesses regarding financial and intangible accounting decisions. The problem with this is that it does not take into account actual empirical data that could be used more accurately to make accounting decisions that helped the firm grow for the long run. Because accounting researchers realized that these types of anecdotal theoretical stances did not actually work, they tried to determine a model that could more accurately predict a firm's accounting needs. The result of this investigation was positive accounting theory. esearchers found that firms who used….

The examples cited by Thomas and Smith (1997) are the political concern with discrimination in insurance pricing, leading to numerous papers on underwriting; and proposals to change accounting standards for pension costs, leading to a flurry of effort to defend traditional actuarial approaches, or argue for alternative approaches. Another example cited by Thomas and Smith (1997) is that normative accounting theory are stimulated by the emergence of "orphan estates," as a political and media issue, leading to efforts to justify distributions more favorable to shareholders. A second consequence of normative theories' role as excises is that whether a theory proves true or false in the long-term may not be a particularly relevant factor in whether its originators prosper or not (Thomas & Smith, 1997).
Positive accounting theory appears to have the better position in the debate. This is because the first step in economics involves identifying the qualitative nature of….

Fraud
Positive Accounting Theory

The positive theory of accounting is contrasted with the normative theory of accounting -- it predicts what accounting practices actually happen, as opposed to stating prescriptivist optimal accounting practices. The positive theory of accounting contains three major hypotheses within the opportunistic perspective, that is, the idea that managers act in their own self-interests.

First, the "management compensation hypothesis" predicts that managers whose pay is tied up with their firm's performance will tend to manipulate the accounting method so that their performance will seem better than it actually was. In other words, they will move profits from future periods into the current period.

Second, the "debt hypothesis" predicts that managers will attempt to pay the interest and principal of the debt they have accumulated in the business, so tying the bonus to debt makes the firm manager more likely to select accounting procedures that shift reported earnings from future periods to….

Integrated Reporting & Positive accounting theory
Integrated reporting

According to IIRC 1.18-1.20, there is an ideal of seamless integration between all competing perspectives that is honored by the integrated reporting perspective. However, despite the strengths of this concept, the notion of a truly seamless presentation of competing data remains elusive. It is true that for a long time, the profession of accounting has been criticized for placing undue emphasis on short-term financial data when evaluating the performance of an organization. This can make it difficult for investors to comprehend the state of health of an organization and make wise decisions with their money. The integrated reporting framework was designed to address this and "is organized around the concept of reporting on 'capitals,' including financial, manufactured, intellectual, human, social and relationship, and natural capital. Under each of these headings are a series of disclosures that a company might make" (Cohn 2013). The presumption….

In aaccounting research, the model used would be called analytical modeling, which consists of sstudies that use models with no specific underlying economic theory but use mathematical techniques. The mathematical formulas are applied to test and establish laws and accounting practices. Simulation, or the practice where the analysis is so complex that it requires a computer, is also an example of an inductive accounting practice research methodology.
Finally, pragmatic research utilizes pragmatic validity, which views research from a prescriptive-driven perspective. For example, solutions to problems that actually occur in the complex and high field of practice are developed in a way that, while valid for a specific situation, need to be adjusted according to the context in which they are to be applied. In the accounting area, general empirical research is a catchall that includes primarily descriptive empirical work. Another example of an accounting research methodology that consists of pragmatic….

ystems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of….

This model could then be customized for the needs of the different companies.
Sankaran and AlHashim (2006) make a compelling case regarding the need for harmonized accounting standards and practices. In addition to the globalized economy, they also rightly point to the benefits of such harmonization for corporations - including a greater ability to keep track of expenses and a better way of reconciling different accounting practices in its branches worldwide. Furthermore, Sankaran and AlHashim (2006) also allay fears that harmonization is equivalent to imposing only one accounting system around the world. Instead, they highlight the need for commonality, for a web-based accounting system that lends itself to different accounting practices.

The paper makes a strong argument, and the data regarding the need for a harmonized accounting system is compelling. hile this article may present a challenge for readers unfamiliar with basic programming language, the inclusion of a generic algorithm for….

Accounting
Journal Entries

A/P

A/R

Cash

Liabilities

AP

AR

Cash

Liabilities

Cash

Cash

Liabilities

Reserve

Theory

Alan Moser and Stephanie Philips operate a successful software business in Brisbane. Alan and Stephanie are existing clients of your accounting firm CPT Accountants. Their business currently operates as a partnership but due to expansion plans they are considering incorporating the business (ie becoming a company). They wish to clarify the following points before making a decision and have asked CPT accountants to write a report answering the following:

What is the difference between forming a proprietary (private) company and public company?

There is substantial difference in the reporting requirements and tax basis for private and public companies. However, the biggest difference is how the legal entities deal with liability. Under a sole proprietorship and a partnership the owner can be held liable for many different problems that the business incurs while under a public model the company's owners have a limited liability. This offers the investors in a public company….

Accounting
America was not founded as a Democracy or as a Monarchy, for the educated and landed founding fathers felt assured that neither would provide the nation with rights for all and privilege for the few. America was founded as a Republic, and one might add as an ogliarchic republic at that. Those with the right gender, race, and wealth were represented through their while others were represented through the votes of their betters. Today, nearly-universal sufferage (age and past misbehavior are both barriers) assures that these factors do not determine whether a person can vote -- but an argument can still be made that the majority of the political process is determined by wealth. "The creators of America's constitution and government were among the wealthy aristocrats of their day. When they created their new government, the founders excluded democracy to the extent politically possible at the time. ..The great failure….

Education should come from non-profit international scientific, health and environmental organizations. They would be most widely respected and would have more access to both the TNCs and the host and origin country governmental bodies. They can educate the corporations on the practicality of policing their own people and actions. They can educate government bodies on how to include these considerations in political decisions. They can be resources for The United Nations and the TO to help them decide on their programs. Finally they can help the educate the global populace via global media, especially independent educational media.

The last suggestion is one way to approach using public relations. Another is to incite the press and various other media to report the good and the bad actions of TNCs. His makes for interesting news for their audiences, and good public service for the media. In essence, Fowler has said much of this….

This role is in response to clients' demands for a single trustworthy individual or firm to meet all of their financial needs. However, accountants are restricted from providing these services to clients whose financial statements they also prepare." (U.S. Department of Labor, ureau of Labor Statistics, 2009)
1. Public Accounting

The work entitled: "The Reality of the CPA's Role" states that modern CPAs work "behind the scenes as trusted advisors in nearly all significant business decisions. Successful accountants display the ability to think strategically and creatively and to be problem solvers and business advisors." (Douglass, 2006) Douglass states that the views of the CPA are widely varied "...whether from the viewpoint of the investing public or from the perspective of the companies that engage CPAs to audit their financial statements or perform other functions. In fact, many people not involved in the business management or accounting profession may perceive CPAs as….

The reality was that a company which aspired to be "the No. 1 stock on all Street" was instead steadily bleeding money while claim growth in the billions.
The pressure placed upon accountants at ordCom was reflective of the pressure facing accountants throughout the economy during this period of widely absence securities oversight. Indeed, the relationship between regulation and accounting is essential, and this diminished link would have catastrophic implications for the profession as a whole. Such is shown by the Scott text, which tells that "efficient securities market theory has major implications for financial accounting. One of these is that supplementary information in financial statement notes or elsewhere is just as useful as information in the financial statements proper. Another is that efficiency is defined relative to a stock of publicly known information. Financial reporting has a role to play in improving the amount, timing, and accuracy of this….

Reflective Essay: Accounting Theory

Accounting theory is an essential part of the accounting profession as it provides a framework for understanding and interpreting financial information. Throughout my studies in accounting, I have learned about various accounting theories that have significantly influenced the way financial transactions are recorded and reported. In this reflective essay, I will discuss my thoughts and insights on accounting theory and its relevance in the field of accounting.

One of the accounting theories that I found most intriguing is the Positive Accounting Theory. This theory suggests that accounting practices are developed based on the self-interest of individuals or organizations.....

Accounting Theory: A Reflective Essay

Introduction

Accounting theory serves as the foundation for the principles and practices that guide financial reporting. It aims to establish a common framework for understanding and interpreting accounting information. As a student of accounting, I have delved into various accounting theories, each offering unique insights and perspectives. This reflective essay explores my reflections on accounting theory, its significance, and its implications for the accounting profession.

The Role of Accounting Theory

Accounting theory provides a conceptual framework that underpins accounting practices. It establishes the principles and standards that govern the recording, classification, and reporting of financial information. By providing a....