Positive Accounting Theory Analysis

Question: Discuss about the Positive Accounting Theory Analysis. Answer: Introduction The paper majors on the analysis and critique of the theoretical approach currently stressed in the accounting literature as seen in the article. The theoretical concept presented for analysis is the positive accounting theory (PAT). PAT is based on the theoretical understanding of Ross Watts and Jerold Zimmerman studies published in the 1978 and 1979. This paper, therefore, critiques the possible research methods complications and critiques the philosophy of science issues as applied in the article (Watts and Zimmerman 2010). There are some claims concerning methodology used in the article which has no single influence on accounting research. This paper provides a critical analysis and evaluation of these purported failures through examination of two distinct types of critiques; economically based reviews and various studies involving issues of the philosophy of science. The paper summarizes the content of the article and various aspects of positive accounting theory. It will also critically analyze the whole article including the theoretical framework used in analyzing the theory, limitations of the article and its significance. Moreover, it will analyze how the author of the article explores the literature and methodology to explain the theory of positive accounting (Deegan 2013). The critiques discussed in the content of this paper are inclusive of those presented by Watts and Zimmerman. It also deals with other responses as well as other numerous reviews that were not inclusively examined by either Watts or Zimmerman. It further captures those responses that were not published until after the study by Watts and Zimmerman (1990). Positive accounting theory according to various sources, is revealed as an applied economic positivism (Warfield, Wild and Wild 2005). Looking back into the historical and economic initial sources of positive accounting research, it is clear that the article shows the positivity of the aspect of the Watts and Zimmerman approach rhetorically than the methodology used in the current study. The author has argued that positive accounting theory does represent a problem shift towards a domain of research that is suitable for various economic and accounting schools. The article also aimed at reviewing published critiques of positive accounting theory based on the philosophy of science which has been revealed not to be much effective literature. To achieve economic-based critiques that emphasize on the limitations, a promising path for methodological critiques of positive accounting theory must be developed according to Watts and Zimmerman (2008) study. General findings The author of the article suggests that the research should not be direct, but must employ various social aspects rather than theoretical aspects which require justifications. The main idea discussed in the article is the examination of two concepts that is ontology and the epistemology, and how these concepts are resultants of a positive research. The author argues that in the current world, there are no better accounting practices to help with the development of positive accounting research programs (Scott 2007). It is also evident that the article aimed at suggesting various practices that are suitable for a proper accounting research. For example, a well-developed theoretical model, the creation of better measurement procedures and methods with the appropriate channeling of fundamental research requirements and frameworks. The study revealed several issues as outcomes of the conducted survey as seen in the research findings. Among the findings was the discovery of the vast gap between the application of the positive accounting research in real life and various factors which should be made available for perfect formation of an active intellectual program. The study also came to a finding that is suitable to curb the situation of the existing gap (Healy 2013). The study found out that the appropriate solution is to modify the system. The article also perceive the research as a cultural activity and not scientific in nature which can only be validated by a group of individuals involved in the research program. The article discovers that there are valid hypotheses available for researchers to build their studies. The article speculates that there is an independent work in the cultural world which research should exploit. The accountant researchers should use intellectual observation while conducting research. It is also evident from the research that, application of the human behavior can result in rational practices in the field of accounting including positive accounting research. Contributions The article suggests various ways which can be put into practice to ensure that positive accounting research is achieved to boost the accounting practices. The argument by the author helps various individuals, more particularly writers to develop a more critical positive attitude towards different approaches. Such approaches will be useful in sustaining positive accounting research in the field of accounting. The author has identified such aspects as measurements and quantitative models as well as the use of a mathematical model as essentials in ensuring that positive research achieves its full potential. The article also mounts pressure on various relevant parties involved in accounting and investigation field to adapt accounting models which are suitable and can be justified with concrete evidence. Research Question/ hypotheses What is required for the development of a successful positive accounting research program? The above question is the primary focus of the article even though it is not well derived from the literature review. It is important since all the issues discussed by the author in the article revolve around it as the primary concern. The research question summarizes all the objectives that the article is intended to achieve. The research hypothesis as seen in the article is the pathway through which the author follows to achieve the various aims of the article. Even though the question is not that clear from the literature review, the objectives flow from the beginning to the end of the article thereby enabling the author to achieve the intention of developing the requirements for a positive accounting research models and program. Through the research hypothesis, various models have been suggested to achieve the purpose of the article. The research question is not well tested since the author does not believe in thesis tests as currently constituted (Christenson 2013). The above question has helped in the development of accounting research models and the creation of models that are vulnerable to testing and finally creation of a more mathematical and quantitative method as part of the standards. The hypothesis is important and justifies most of the issues addressed in the literature review. Theoretical Framework The theoretical frame of the article covers various theories as seen in the article. The study explores systematic study as the methodology. There are also some interrelated concepts developed and captured within the content of the article. The theoretical framework used in the study follows a sequence where the author started by reviewing various theories used by other authors such as Watts and Zimmerman in the year 1978, 1986 and finally in the year 1990 whose main discussion focused on positive accounting theory. The article proceeded further with the discussion on various scientific factors such as the ontology and the epistemological theories to support cultural perspective in research. To come up with the justification of investigation as a cultural aspect, the author performed various surveys. The author also conducted research on various philosophies to justify the concept of science and culture in accounting research. The article also employs the use of different aspects such falsification and hypothesis analysis where elements such as proper criterion have been applied together with both quantitative and qualitative aspects being involved. The theoretical perspective of the article is revolving around the justification of research as being philosophically scientific as well as a cultural (Watts and Zimmerman 2008). The Significance and Limitations of the Article Significance of the Article The article is significant in various ways which motivate other authors towards the development of a positive accounting research. The article focuses on the elaboration of the more mathematical and quantitative analysis which can be justified through the application of measurement. This aspect of the discussion encourages other authors towards the development of proper research concerning accounting (Collin et.al 2009). The article is relevant because of the suggested vulnerable models. The author of the article has positively exploited the findings through measurement rather than the test. The author has positively utilized various previous studies to achieve the intended purpose of the research. Through the application of these previous studies, the upcoming authors will have the basis for analyzing other authors work and how they can be incorporated into a current research to meet the objectives of a given research work. Limitations of the article Though the article proves to be significant to some extent, there are several models of research which should be considered as revealed in the report. The authors ideas are regarded as having limitations regarding the content flow in comparison to the new articles. The author of the article applies critiques of the application hypothesis testing and methodology (Basu 2007). The author states that test to some extents as being used in the theory of positive accounting, is only probable incompatible to null hypothesis (Baiman 2010). Another limitation of positive accounting theory is seen through the application of hypothesis test. This kind of testing has been used in positive accounting theory for several times. It is, however, considered to be weak, therefore, a call to action for a better way or alternative development to curb this kind of drawback in the accounting research. The theory is viewed to be providing weak evidence through hypothetical testing which most of the time cannot be justified. The author also supports claims made by various scholars involved in the accounting sector. The author explains that the possible research testing provides information which is not accurate and falls short of how a study should be undertaken. This limitation, therefore, restrict the positivity of the article (Sweeney 2004). The author of the article is not able to justify various claims against the use of positive accounting as a result of the different limitations created by the hypothesis test. This reflects in the findings where most of the results obtained through the application of actual accounting research are considered invalid. Therefore, most of the conclusions from the article cannot be viewed to be authentic. Since the findings cannot be justified, the contributions of the article can also be assumed to be invalid and should be deeply considered before putting them into practice. Conclusions The above critique has reviewed various aspects discussed in the article. It analyzed the aims and goals of the article about different requirement speculated to be useful in the development of a positive accounting research. The paper has discussed the limitation of the article about the positive accounting theory. The paper has dealt with the achievement of the research hypothesis and how it has led to the attainment of the primary objective of the article. The aim of this paper was, therefore, to help various authors and parties involved in research to develop appropriate skills required to achieve sufficient positive accounting research. Another purpose of this article is to justify how the author of the article created the theoretical models and data collection methods required to be used by various accounting laws and strategies. Accountants, authors, and specialists are needed to develop theoretical models appropriate for data collections. The implication of this critique is to help various editors and referees with the development of necessary skills required to achieve a positive accounting research potential. This paper is also to assist with the identification of various alternatives to replace the hypothetical test with appropriate measurement model. Another implication of the paper is the mounted pressure on many accountants and authors to adopt create and adopt new theoretical models and complete data collection methods to exploit best methods of collecting data. This discussion, therefore, suggests the application of quantitative and measurement as the best models for a real research method. References Baiman, S., 2010. Agency research in managerial accounting: A second look. Accounting, Organizations and Society, 15(4), pp.341-371. Basu, S., 2007. The conservatism principle and the asymmetric timeliness of earnings 1. Journal of accounting and economics, 24(1), pp.3-37. Christenson, C., 2013. The methodology of positive accounting. Accounting Review, pp.1-22. Collin, S.O.Y., Tagesson, T., Andersson, A., Cato, J. and Hansson, K., 2009. Explaining the choice of accounting standards in municipal corporations: Positive accounting theory and institutional theory as competitive or concurrent theories. 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