Theoretical concepts of accounting - Essay Example

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Theoretical concepts of accounting

Proponents of free market approach have also supported a wait and see approach in relation to economic and financial changes taking place all over the world. In fact, the free market proponents reject the idea of intervention by governments for the sake of adjusting the distracted economy, and have based their arguments on the claim that demand and supply forces interact to ultimately bring stability in the distracted economic conditions (Deegan and Unerman; Rankin, Stanton and McGowan). However, malpractices of those charged with the governance and misuse of authority often overrun the expected balances to be attained in a free market model through demand and supply interaction (Deegan and Unerman; Rankin, Stanton and McGowan). One of the most relevant and quotable example in this regard can be of the Enron Scandal, which obviously had nothing to do with the free market model and demand and supply forces, but government intervention to safeguard the interests of general public through Sarbanes Oxley Act (SOX) was deemed appropriate (Deegan and Unerman; Rankin, Stanton and McGowan). ...Show more

Summary

This report presents a review and discussion related to the different theoretical concepts of accounting.The areas discussed in the report include arguments related to the free market perspective with respect to the regulation of accounting…
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