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Among these are the ground concepts that may be used in the formulation of accounting theories among other aspects of accounting theories. Some contend that in the beginning many primitive societies, those that were in existent in the earliest days, developed the art of counting before developing the art of naming (Brown, 2006, 3). These primitive forms of accounting for the number of items provide the basis by which early societies may be said to have been practicing accounting. Such groups are likes of the Egyptian with the need to account for grain harvested and stored. Examples of other such systems may be found in other early civilizations such as the Greeks and the Tibetans. Over time these systems of accounting for various items moved into the business world. This was in earlier European and Asian countries that mostly participated in trade with one another and within their countries. One will find evidence of the differences in practices among the various countries to indicate differentiation in as far as the earlier practice of accounting is concerned. There is also need to mention the contribution of the likes of Luca Pacioli who made contributions to the earlier forms of accounting (Riahi-Belkaoui, 2005, 3). He is credited with developing the double entry system of bookkeeping that is still widely taught and practiced in accounting spheres to date. It is though that over time this Italian system of accounting was adopted in most parts of the world. In the United States various forms of accounting methodologies were also being applied. These methods may not have been allowed for uniformity, due to the differences in the underlying guidelines. These theories were to be streamlined with the development of bodies such as the SEC which became the ultimate authority as far as providing guidance on accounting related matters (Previtis, Walton & Wolnizer, 2011, 121). Accounting theory development The development of accounting theory on the other hand may be said to have progressed with the developments that were being experienced in the accounting field. Their development was also being fueled by the changes that were occurring in corporate world. A good example may be the case with the development of the railway that led to the growth of the stock market for the purposes of raising needed financing. This growth in a whole industry catapulted the need to develop theories to be used in corporate financing deals (Schroeder, Clark & Cathey, 2011, 4). The current environment The recent financial crisis affected the world in a way that most did not see coming. This crisis also exposed a lot of the misdeeds that have been happening in the financial world. The effect is that there has been an increase in the oversight that is being paid to these sectors of the economy. Accountants and the accounting theories that they choose to use are being placed under greater scrutiny by various bodies. This is in a bid to try and prevent the recurrence of another crisis. The major concern being caused by the derivatives that have come to play a major part in corporate entities and that may have carried some blame when it comes to the causal effect of the crisis. Accounting for these derivatives requires additional accounting regulations as compared to other marketable securities (Stickney, 2010, 579). Accounting theory definition Before an in depth analysis and look at the various theories and how they affect the accounting world, one needs to be aware of the definition or the basic characteristics of an accounting theory. Dictionaries place the definition as, well organized knowledge that can be applied in a wide variety of situations. These are principles and assumptions that can be used to predict how a given ...Show more


To better understand accounting theories there is need to develop an understanding of what accounting is in the first place.This picture is best painted by looking at the history of accounting that will also provide insight into the various accounting theories…
Author : oconnellkacey
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