Accounting Theory & Issues Natural Sciences

Question: Write about theAccounting Theory Issuesfor Natural Sciences. Answer: Introduction This paper has examined the positive and negative aspects of positive accounting theory through analyzing the research article Half a Defense of Positive Accounting Research. The paper carry out a critical analysis of the given research article for gaining an in-depth understanding of its major arguments presented in context of positive accounting theory. This paper evaluates the argument presented in research article in relation to the positive accounting theory effectiveness in accounting researches. The overall research paper is about discussing the significance and importance of positive researches to accounting field (Dunmore, 2009). The paper is divided into various sections for covering the major points illustrated in the research article, that are, summary of article, research questions, theoretical framework, significance and limitations of article and at last presenting a conclusion for summarizing the key arguments of the research article. Summary of Article The given research study emphasizes and focuses on the use of positive theory in accounting researches. As per the article, the theory was developed by Watts and Zimmerman based on the principles of natural sciences. The theory thus gained dominance in accounting settings as it incorporate the principle of sciences and thus helpful in explaining the cause and effect relationships of accounting. The theory since its development was used on a large scale by the accountants in developing an understanding of the rational human behavior in accounting. The theory is not based on accounting standards but instead try to explain the actual reality of the accounting conventions. The accounting researches also incorporate the use of natural science problems in resolving the accounting issues (Chambers and Dean, 2013). Therefore, the theory finds extensive application in positive accounting researches for maintaining the scientific nature of these researches. The author in this context in the re search article has emphasized on explaining the use of positive theory in accounting researches through demonstrating several examples. The author has stated through citing various examples of positive research in accounting that the concept of positive accounting research is much broader than the positive theory (Dunmore, 2009). Thus, the positive accounting researches need the implementation of other theoretical models too for successfully resolving the scientific nature of accounting problems (Chatfield and Vangermeersch, 2014). The research article has argued that though theory is being widely used in accounting researches it is not able to successfully their scientific aims and objectives. The major problems faced by the researchers through the use of PAT (Positive Accounting Theory) model are analyzed and presented by the author in the research article. As per the author, the method of positive accounting was used initially to gain a better knowledge of the use of accounting practices in reality but it is proving to be quite insufficient in meeting all the needs of a broad positivist research program. The theory aims to provide an understanding of a particular accounting practice by observing empirical evidences related to it and thus making predictions about the future events based on the empirical results (Ghnabari et al., 2016). PAT. It is used mainly to develop an understanding of the selection of a particular accounting method by business firms. Thus, it tends to explain the reason behind the use of an accounting method over others by businesses worldwide. The theory as based on economic principles uses statistics data for deriving conclusions based on such data (Mattessich, 2013). However, as pointed by the author in the research article, the main weakness of positivist theory using PAT model is that largely relies on use of statistical hypothesis testing for deriving results. The theory thus largely ignores the concept of measurement and is only based on predictions rather than estimation (Dunmore, 2009). The accounting data is subject to various errors and thus should incorporate the concept of measurement for ascertaining the errors in advance (Kabir, 2008). The author thus argues in the research article that accounting researches need the implementation of theoretical models that is based on estimation and not predictions. The quantitative nature of scientific researches is also explained in the research article through the use of Poppers falsification criterion. The author has used the criterion for testing the scientific nature of positive accounting researches and pointing the deficiencies present in the current accounting researches. The theory of positive accounting was regarded to be more scientific than normative accounting theories. The theory of normative accounting is based on value judgment and provides explanation to the accounting phenomena on the basis of subjective morality and accounting standards (Deegan, 2014). The theory of positive accounting though regarded better than normative accounting theories has certain drawbacks that impedes its successful adoption in accounting settings (Abdel-Kader, 2011). At last, the aut hor in the research article has proposed the development of better theoretical models that can be used in accounting researches. The theoretical models used should be based on testable predictions and more analytic research so they prove to be successful in achieving the scientific aims of quantitative positive accounting researches (Dunmore, 2009). Research Question The given research article is based on providing answer to the following research question Does positive researches is able to maintain the scientific nature of accounting researches?. Also, there are few sub-research questions that the research study intends to provide answer in addition with the above mentioned main research questions. These are as follows: Why positivist theory finds extensive application in scientific researches? What are the challenges present before the accounting researchers in using the model of PAT in accounting researches? Does a better theoretical model need to be developed based ion testable predictions for achieving the quantitative objectives of accounting researches? The above mentioned research questions are developed on the basis of theoretical arguments illustrated in the literature review section of the research article. The theoretical arguments presented are based on the views and opinions of previous researchers that are being analyzed in the present research study (Dunmore, 2009). Theoretical Framework The theoretical framework of the research study is developed on the basis of theoretical data collected from the work of the previous researchers in relation to the research topic. The author has collected the views and opinions of previous researchers for providing an understanding of the contribution and criticism of positivist theory in accounting researches. The theoretical framework of the research article has pointed that the concept of positive accounting research is much wider than the positivist theory. The positivist theory only provides an explanation of the rational human behavior in accounting field while positive accounting research demands an appropriate understanding of both rational as well as non-rational human behavior. Thus, as such the theory of positive accounting is largely claimed to be incapable in maintaining the scientific basis of accounting researches (Wolk et al., 2012). Also, the theory of positive accounting can be used only in quantitative positive re searches as it is based mainly on the logic of hypothesis statistical testing. However, researchers have claimed that scientific theories are not always quantitative but can be also qualitative such as Darwin theory of evolution. Thus, the positivist theory of accounting can only be used in conducting quantitative accounting researches and not suitable for qualitative researches (Dunmore, 2009). The theoretical framework of the article has illustrated the use of Poppers falsification criterion for developing an understanding of the quantitative nature of positive accounting theories. As per the criterion, a quantitative scientific theory provides testable predictions that are susceptible to falsification. Thus, testable predictions obtained from a scientific theory are analyzed and evaluated by comparing them to the prediction of a standard theory. The theory is falsified on scientific basis if its predictions turn out to false during testing. The poppers criterion is used by the au thor for explaining the scientific nature of positive accounting researches. The author has stated that the common problems associated with the use of positive theory in accounting researches is that only incorporates the use of hypothesis testing through the collection of statistical data. The theory does not incorporate the use of measurement for identifying the errors in accounting data. Thus, in absence of adequate measurement the rewards obtained from hypothesis testing can be untrue and thus positive accounting researchers lacks credibility and reliability (Gaffikin, 2008). The author has proposed that accounting researches should also adopt the concept of measurement for providing a reliable outcome from the accounting researches. The theoretical framework of the article has thus demonstrated a large gap present in the current theoretical model used in accounting researches for maintaining their scientific nature. The author has also pointed that positive accounting researche s only used ad-hoc quantitative models for explaining the relationship between tow variables. Thus, the theory lacks analytic researches and there is high need for development of better theoretical models that can help in providing an understanding of the analytical relationship between the tested accounting variables (Dunmore, 2009). Significance and Limitations of Article The research article is highly significant in gaining an understanding of the effectiveness of positive theory in maintaining the practical nature of accounting researches. The research study has provided an understanding of the current gap in positive accounting researches in providing a reliable outcome. The study has urged for the need of developing better theoretical models that can be used in accounting researches so that it is able to provide an explanation of the accounting practices used by business firms. The main limitation of the research study is that it relies only on subjective data for analyzing the shortcomings of the positive accounting theory model. The research study is mainly based on the adoption of quantitative research methodology as it has analyzed the theoretical arguments presented by previous researchers in context of the research topic. Thus, the research study lacks objectivity and does not explore any new perspective in context of the positive accounting researches. This has impacted the credibility of the research study as there is no incorporation of primary data for developing an accurate answer for the research problem. This will also impact the significance of the research study to be used in future context by accounting researchers. The research is purely qualitative in nature and therefore the outcome achieved from it lacks reliability in absence of support of any practical evidences. The author also need to demonstrate empirical data in support of theoretical conclusions provided for enhancing the validity and credibility of the research to be used in future accounting context (Dunmore, 2009). This is necessary for enhancing the significance and importance of the research article (Bovens et al., 2014). Conclusion The research article has provided an in-depth understanding of the positive accounting theory and its contribution in scientific researches. The major problems as stated in the research article regarding the use of positive theory in accounting researches are that is only based on analyzing the statistics data and logic of hypotheses testing. Thus, as such the result obtained is not error-free in absence of measuring and assessing the accounting data. Also, the theory is not able to provide an appropriate explanation of the cause of non-rational human behavior in accounting field. These problems need to be overcome by the accounting researchers for gaining successful outcome from the accounting researchers. The author, in the context, has recommended the adoption of better theoretical model based on analytic researches that are able to provide testable predictions for developing an understanding of the accounting practices. The theory developed by Watts and Zimmerman of positive acco unting as such needs modification to be used successfully in contemporary accounting researches. Therefore, it can be summarized form the research article that positive accounting theory is used in academic researches in accounting for gaining an understanding of the reality of accounting practices. However, there exist wide gaps in the usefulness of this theory in achieving the scientific objectives of accounting researches. References Abdel-Kader, M. G. 2011. Review of Management Accounting Research. Springer. Bovens, M., Goodin, R. E., and Schillemans, T. 2014. The Oxford Handbook of Public Accountability. OUP Oxford. Chambers, R. J., and Dean, G. W. 2013. Chambers on Accounting: Logic, Law and Ethics. Routledge. Chatfield, M. and Vangermeersch, R. 2014. The History of Accounting (RLE Accounting): An International Encylopedia. Routledge. Deegan, C. 2014. Financial Accounting Theory. McGraw-Hill Education Australia. Dunmore, P.V. 2009. Half a Defence of Positive Accounting Research. Gaffikin, M. 2008. Accounting Theory: Research, Regulation and Accounting Practice. Pearson Education. Ghnabari, M. et al. 2016. PAT (Positive Accounting Theory) and Natural Science. International Research Journal of Applied and Basic Sciences 10(2), pp. 177-182. Kabir, M. H. 2008. Positive Accounting Theory and Science. Positive Accounting Theory and Science, pp. 134-148. Mattessich, R. 2013. Reality and Accounting: Ontological Explorations in the Economic and Social Sciences. Routledge. Wolk, H. I., et al. 2012. Accounting Theory: Conceptual Issues in a Political and Economic Environment. SAGE.