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Accounting Theory:British Petroleum Oil Split in Mexican Gulf 2010 - Essay Example
Author : nolanelta
Finance & Accounting
Pages 5 (1255 words)
With the intention to decode the operations of businesses and their consequences, various accounting theories have been brought into use.For instance, the positive accounting theory emphasises the Ex Enteagreement between the two parties…
For instance, the positive accounting theory, also known as agency theory, emphasises the Ex Ente (before the event) agreement between the two parties, i.e. an agency and the agent. Notably, this particular theory accounts for the costs to be incurred by the agency, as a consequence to the failure of the agent to perform the delegated authority efficiently (Watts & Zimmerman, 1990). Correspondingly, the behavioural accounting theory argues that key decision makers of an organisation can add value to the company. Delivering the key decision makers of the company with such significance, the assumptions taken in the behavioural accounting theory intends to make the behavioural effects of the decision makers within an organisation, substantially transparent to the company stakeholders (Gillenkirch & Arnold, n.d.). Again, the Critical Accounting Theory (CAT) is concerned with the social customs and practices, which tend to ignite a change within conceptual, institutional and practical dimensions of accounting theories. Thus, arguing on the basis of the change drivers, the theory aims to justify the strategies needed to be taken by a business so as to avoid strategic failure (Tilling & Tilt, 2002). Emphasising these theories of accounting, the study aims at evaluating the incident of BP oil spill in the Mexican Gulf in the year 2010. ...