POSITIVE ACCOUNTING THEORY‚ POLITICAL COSTS AND SOCIAL DISCLOSURE ANALYSES: A CRITICAL LOOK* Markus J. Milne Accountancy and Business Law University of Otago Dunedin New Zealand Ph: 64-3-479-8120 Fax: 64-3-479-8450 Email: mmilne@commerce.otago.ac.nz * The author would like to thank Alan MacGregor‚ Carolyn Stringer‚ Gregory Liyanararchchi‚ Ros Whiting and an anonymous conference reviewer for their helpful comments on earlier drafts of this paper. Thanks are also due to seminar participants
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Chapter 7 - Positive Theory Positive Accounting Theory Philosophy of PAT Million Friedman championed positive theories in economics. He stated that: (part 3 Empirical Research in Accounts of Accounting theory from Jayne Godfrey) The ultimate goal of positive science (i.e. INDUCTIVE) is • The development of a ‘theory ‘ or ‘hypothesis’; • that yields valid and meaningful “Predictions’ • about phenomena not yet “observed”. Consistent with Friedman’s view‚ Watts and Zimmerman
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Positive Accounting Theory • Sometimes abbreviated as PAT • Explains and predicts accounting practice • Does not seek to prescribe particular actions • Grounded in economic theory • Focuses on the relationships between various individuals involved in providing resources to an organisation (agency relationship) • Owners and managers • Managers and debt providers Positive Accounting Theory • Assumptions of PAT • All individual action is driven
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How would critical theorists assess research based on the Positive Accounting Theory? Accounting researchers tend to accept current accounting systems. Rather than focusing on why accounting systems favour certain classes of society‚ research is mainly carried out to such things as what accounting methods are most appropriate in certain circumstances‚ what motivates managers to use one accounting method over another and disclosure. By looking at accounting with a critical perspective is to recognise
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and sent to the U.S. Electoral College where the electors select the President and Vice President. These elections are thrilling pieces of American History. They are historical markers for shifts of leadership and thinking in the United States. The 1968 presidential race was no exception because it was most likely one of the most exciting elections to date. It had more controversies and tragic events then ever witnessed before. There was violence‚ death‚ war‚ tension‚ discrimination‚ riots‚ and protests
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Positive Accounting Theory and Science Md Humayun Kabir Senior Lecturer Faculty of Business Auckland University of Technology Auckland‚ New Zealand Phone: 09 921 9999 E-mail: humayun.kabir@aut.ac.nz ------------------------------------------------------------------------------------------Earlier versions of this paper benefited from comments from Lee Parker of the University of South Australia‚ William Maguire of Manukau Business School‚ Keith Hooper of Auckland University of Technology‚ Divesh
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Compare and contrast normative and positive accounting approaches: Definition of PAT: Watts and Zimmerman (1986) defined Pat as a theory that seeks to explain and predicts particular phenomenon. It is concerned with explaining accounting practice. The three basic hypotheses as outlined by Watts and Zimmerman (1978) underlying PAT are: 1. Bonus plan hypothesis: The bonus plan hypothesis is that managers of firms with bonus plans are more likely to use accounting methods that increase current period
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What is Positive Accounting Theory? Positive Accounting Theory is the branch of academic research in accounting that tries to make good predictions of real world events and translate them to accounting transactions. This contrasts with normative accounting theory‚ which that tries to recommend what should be done. Positive Theories try to explain and predicts actions such as which accounting policies firms will choose and how firms will react to newly proposed accounting standards. Positive
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charged year of 1968. The revolution that occurred was not strictly political‚ however‚ and young college students strived to make social statements with “sex‚ drugs‚ and rock and roll”. The assassinations of Rev. Dr. Martin Luther King Jr. and Senator Kennedy also occurred in the same bittersweet year‚ as well as widespread riots leading to violent takeovers of college campuses‚ the 1968 Democratic Convention riot‚ outbursts by the Black Panthers‚ including a black power salute at the 1968 Olympic games
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a) The bank unveiled a plan to tackle community concerns so that it would be seen in a more positive light. Because banks offer services which are so essential (providing an opportunity to exploit customers)‚ they deal with high levels of customers and generally make large profits. Also‚ interest rates naturally fluctuate between high and low levels (controlled by the government to manage inflation - not the individual banks). For these reasons they have developed a generally bad reputation with
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