Analyzing Effects of Positive Accounting Theory & Current Issue in an Organization

Accounting Theory & Current Issue

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TABLE OF CONTENTS Table of Contents.........................................................................2 INTRODUCTION............................................................................3 Aim and Objectives......................................................................3 Research question.......................................................................3 Theoretical Framework................................................................4 SIGNIFICANCE AND LIMITATIONS OF THE ARTICLE.......................6 Limitations of theory.................................................................6 Methodology used in the article...............................................7 Limitations................................................................................8 CONCLUSION................................................................................8 REFERENCES................................................................................10

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INTRODUCTION Positive accounting theory is the effective tool which provides detail information related to real world events and helps to translate all this predication into accounting transaction.

Positive accounting research is part of the wider intellectual project of scientific research which helps to understand cause and effects relationship (Williams, 2014). As according to the concept, of positive accounting to the manager and firm need to choose such accounting methods through these concepts firm can represent their won performance significantly but these concepts has some positive and negative impacts. Report will critically discuss about positive accounting theory. In addition, assignments will discuss the hypotheses and its values in order to find out the effectiveness of the model (Nassar, Uwuigbe and Uwuigbe, 2014). At last the study, make significance and limitation of the article will be described in this report.

AIM AND OBJECTIVES The main aim of the study is to identify the effectiveness of positive accounting theory.

Objective ⚫

To understand the concepts of positive accounting theory

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To identify importance and limit positive accounting theory based on the article

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To determining effectiveness of positive accounting theory

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To make recommendation on accounting methods which assists in preparing useful accounting reports

RESEARCH QUESTION In this present report researcher used the statistical hypothesis which is considered as the effective tool for conducting research on positive accounting theory. Through this tool, actual objectives of the research can be achieved (Kim and Shin, 2015). Positive accounting theory is Grab the flash offer up-to 50% discount on Accounting Essay Writing Service at Instant Essay Writing.

the effective tool which provides detail information related to real world events. It is commonly used in the quantitative positive accounting research and null hypothesis is done in computerized manner. In this present report researcher use hypotheses which is appropriate and make able to understand the usefulness of the positive accounting theory. As per the discussion, in this present report facts are totally based on imagination and no one has control on the imagination. This show that accounting figures can changes any time so mangers need to be prepared have to be prepared for the modification and modifications should be made accordingly hypothesis. With the help of this hypothesis scholar draw literature review (Branlard, Gaunaa and Machefaux, 2014) For conducting research both qualitative and quantitative both the methods has been used.

So it can be evaluated that with the help of this methods able to develop the hypothesis and by this accurate results can be achieved by the researcher. On the other hand scholar make some arguments that nothing is exists and even if it exits then people does not have any knowledge about it.

However, in some research it is found that if organization uses PAT then no

consistence and actual results in can be equal.

THEORETICAL FRAMEWORK Positive accounting theory is great concepts that defines wide aspects of accounting. It concepts includes different concepts innumerable computations, problem solving, give in depth information in specific format

(Gunderson, and et.al., 2013). So can be analyzed and interpreted by people. It helps to them in decision making process. To apply this concept on organization is choice of the manger but apply this concept does not affect pricing and standards which is related to accounting decisions.

In order to make implication of the PAT concepts regulations is the biggest factor which can influences the overall transaction and financial reports. PAT is effective financial tool that assists to organization to predicts the accounting practices. It is based on three main hypotheses which give in depth information about the accounting standards. PAT is that concepts which practice concept on the basis of current situations (Madrid, and et.al., 2014). On the other hand predication would always be right is not possible. So on the basis of this it can be say that this Grab the flash offer up-to 50% discount on Accounting Essay Writing Service at Instant Essay Writing.

model is not good all the time because of the company can not make good records. The positive approach to the development accounting relies on the basic assumption that helps to policy makers to make effective decision. It assumes that all the decisions that are being made would be a result of rationally where accountants can follow the best options.

This research shows that predication can give accurate outcome. In this report it critically evaluation can be on the basis of prices investors which make their decisions on the basis on this theory (Williams, 2014). On the other hand there are some other accounting theory which give completely different types of direction to the researcher. There are two types of accounting concepts which can be used by normative or positive approach. The normative frameworks is conceptual frameworks which is used by organization. This theory explains how and when different entries of the financial statements should be entered or modified. Despite of all the criticisms, the approach has still not lost its efficiency which is extremely

helpful when applied under different circumstances. This concept which concentrates on more on the theoretical area and economic concepts (Nassar, Uwuigbe and Uwuigbe, 2014). Sot is can be said that PAT does not focus perception and does not focus on improvement of accounting practices. The positive approach does not alternatives in the existing approaches or principles in case they are considered as irreverent. PAT make analysis only existing principles and make no recommendation for the principles that need to be used.

In research found that PAT is not value free but it has some assumption. It described that all actions are driven by the self interest, along with these there are no other facts which can be mold. Critical researcher believe that testing the figures are not necessary that they give feasible outcome. Some theorists believe that normative approach is the most logical way because it is not based on current situation but provide clear picture on the ways to improve accounting practices should be (Kim and Shin, 2015). Thus, it is clear that normative approach presents extremely practical way methodologies for development and formulation of accounting theories.

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On the other hand positive approaches only helps in analyzing and assessment the nature of the methodologies adopted.

SIGNIFICANCE AND LIMITATIONS OF THE ARTICLE Limitations of theory Positive Accounting Theory is considered as the concept that possess various limitations because of this accurate report could not be prepared by the firm. One of the main limitation of PAT theory is that lack of prescription influences the implementation of the theory. However, particular research assesses that it helps scholars to practice positive accounting within firm and attain desired objectives (Beattie, 2014). Positive Accounting Theory helps in predicting so that no prescription is provided by this model and thus it creates issues related to reality of the facts and figures. Further. It also evaluates that such theory do not give any detailed information regarding improvement within the accounting practice and thus helps firm to improve their performance in market. Thus, through adopting such accounting practice it helps in implementing theoretical framework so that deficiencies could be identified. Therefore, iti s essential for businesses implementing PAT theory needs to bring improvement so that desired objectives could be attained. Thus, proper strategy need to be implemented in regard to adopt effective accounting theory and thus provide proper solution so that managers of firm could overcome the same (Bublitz, Philipich & Blatz, 2015). However, if the managers does not possess effective knowledge regarding PAT than it impacts upon the final report prepared by the firm. Therefore, positive accounting required to be effectively practices so that lack of interest in the numerical values impacts upon the implementation of accounting report.

Furthermore, another limitation faced by positive accounting theory is that it is not value free while it requires certain cost for implementing it within business as it helps in identifying self interest so that managers of firm faces problem in regard to carry out good accounting practices. Through the given article on positive accounting theory it helps in developing fundamental assumption that it does not help firm in accomplishing the study in an effective way (Glover, 2014). However, it criticizes the researchers view point upon good accounting system Grab the flash offer up-to 50% discount on Accounting Essay Writing Service at Instant Essay Writing.

which results in developing self interest so that issues faced could be overcome. There is another crucial limitation of PAT that it is stagnant and thus it creates issues for business that needs to be overcome by adopting effective theory so that business could enhance their operations in an effective way. However, such issues has been prevailing since 1970 but in current time businesses have been added certain effective accounting system that results in overcoming the major problems so that best results could be attained. Positive Accounting Theory helps managers of firm to identify that implementing positive accounting pattern results in overcoming the issues faced by firm and thus develop appropriate measures and improve accounting practices (Wang, Che, Fan & Gu, 2014).

Methodology used in the article

Researcher uses several methodologies in regard to carry out study upon positive accounting pattern and thus selects one methodology from qualitative and quantitative method.

Here, researcher uses qualitative method has been adopted that result in implementing PAT theory within study. Further, exploratory research design helps researcher to carry out the study in regard to implement the PAT theory. All such method results in collecting data and thus obtains desired outcomes (Dufour, Teller & Luu, 2014). In the present research, descriptive research deign has been used which results in providing accurate outcomes and helps researcher to improve the PAT in order to implement good accounting system. Researcher also helps in supporting the positive accounting theory through using qualitative research method and thus helps manager in regard to implement positive accounting system and achieves desired results.

However, the main benefit of implementing qualitative tools results in providing accurate results so that PAT could be effectively implemented. While, implementing such method helps researcher to support the observation and thus collect the information through looking upon effective accounting practices implemented within firm. Such research method is considered as implementing results in obtaining positive outcomes regarding PAT theory and improving

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accounting system within firm (Fernando & Lawrence, 2014). Through implementing such theory it helps in obtaining effective subject and thus obtains knowledge about PAT.

Limitations

There are various limitations faced by researcher at the time of conducting the study upon positive accounting theory. However, the main issue faced by researcher at the time of implementing PAT is lack of time. Thus, it is one of the effective issue faced by researcher as they need to review various articles based upon positive accounting theory (Beattie, 2014).

However, researcher faces issues related to time duration in regard to implement mathematical formulas. Hence, they are not able to provide accurate results so that possible outcomes could be attained. Moreover, another limitation faced by scholar is regarding lack of funds. Thus, it is another major issue that restricts researcher to use the data for using PAT. Hence, these are major limitations faced by researcher in regard to implement positive accounting theory.

Hence, all the limitation faced by researcher and thus it affects the study. However, it is essential for scholar to obtain effective results and thus implementing appropriate objectives and thus PAT could be implemented in an efficient manner. Also, it could be evaluated that implementing theoretical framework helps in adopting effective approach and thus improve the PAT within firm in regard to obtain positive accounting (Bublitz, Philipich & Blatz, 2015).

Further, implementing methodologies helps in selecting qualitative research and thus affects the actual objectives of study so that desired targets could be attained.

CONCLUSION It can be concluded from the study that through implementing positive accounting theory that helps in preparing the accounting report and make crucial decision within firm. Also, it has been identified that PAT theory possess certain importance as well as limitations. Therefore, it is essential for researcher to overcome the identified problems and thus improve the performance of firm. Researcher selects qualitative data in regard to explain the information and test the same.

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REFERENCES Books and journals ⚫

Beattie, V. (2014). Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework.The British Accounting Review. 46(2). pp. 111-134.

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Branlard, E., Gaunaa, M. and Machefaux, E., 2014. Investigation of a new model accounting for rotors of finite tip-speed ratio in yaw or tilt. In Journal of Physics: Conference Series (Vol. 524, No. 1, p. 012124). IOP Publishing.

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Bublitz, B., Philipich, K., & Blatz, R. (2015). An Example of the Use of Research Methods and Findings as an Experiential Learning Exercise in an Accounting Theory Course. Journal of Instructional Pedagogies. 16.

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Dufour, D., Teller, P., & Luu, P. (2014). A neo-institutionalist model of the diffusion of IFRS accounting standards. Computational Economics. 44(1). pp. 27-44.

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