One of the prominent implementations of accounting theory is in terms of developing normative standards. In these regards, accounting theory functions as a means of legitimizing the discipline of accounting in that articulates standards and regulations that establish public faith in the process (Deegan & Unerman 2011). Specific instances such prescriptive theories are implemented can be witnessed in terms of assets, wherein normative theories explore how these elements should be recorded (Deegan & Unerman 2011). Another such instance is prescriptive standards regarding the amount of accounting information that should be supplied to various stakeholders. In addition to normative accounting theories, there is also predictive or positivist accounting theories. Positivist theory seeks to develop predictive insights based on objective occurrences. There is an array of positivist perspectives. For instance, it’s noted that positivist theory seeks to make predications regarding the nature of managerial compensation and accounting practices (Deegan & Unerman 2011). In these ways positivist accounting theories function both to allow investors or stakeholders increased insight into accounting motivations, as well as a means of gaining a broader understanding of financial markets as a means of contributing to more accurate normative structures. ...Show more
Financial Accounting Theory 1. What is the purpose of financial accounting theory? Are you a positivist? Explain why you agree or disagree with positive accounting theory. The purpose of financial accounting theory is broad and complex, spanning an array of issues…
The society can include institutions, social groups, shareholders of organizations, cultures and the society in general. The role of stakeholders in the society, which involves collective contributions by individuals, is the focal point of financial accounting, social and environmental theory.
A conceptual framework is developed from the existing theories. Based upon this an exploratory research is done and along with the subjective belief on the concerned topic a conceptual framework is made by the researcher. Several theoretical frameworks are made after the financial crisis of 1929 and also after the recent financial crisis.
Corporate governance also describes the manner in which company management, board, stakeholders and shareholders relate to each other so that conflict of interest is mitigated. The developments in the corporate governance of the United Kingdom companies have led to influential changes which have stimulated similar amendments in the corporate governance of the European Union in general and that of the United States.
Accounting practices of the modern times are faced with numerous factors to account for in the contemporary business environment. Social and environmental accounting is a contemporary component of accounting principles and standards. It goes beyond the formal record keeping and financial reporting to encompass internal and external information demands by accounting stakeholders in the economies.
This is necessary to achieve because of the perception that the venture gains legitimacy in the eyes of its external environment thereby ensuring the success and continuity of the endeavor. Oil corporations, for example, continue to enjoy huge profits
ly important that the results of such transactions are recorded regularly so as to provide an account of such happenings, the result thereof and also predict the future visibility. Accounting is one such function which provides the guidelines for reporting for all types of
stakeholders in the society, which involves collective contributions by individuals, is the focal point of financial accounting, social and environmental theory. The primary issue concerning social and environmental theory is the way the society determines developments, goals,