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ACCOUNTING THEORY

ACCOUNTING THEORY . Hashemite University Dr Husam Al-Khadash. CHAPTER 1. THE DEVELOPMENT OF ACCOUNTING THEORY. Introduction. What is theory? What is the relationship of accounting research to accounting theory?. Accounting Theory Defined. Structure of Accounting Theory Informal Approach.

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ACCOUNTING THEORY

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  1. ACCOUNTING THEORY Hashemite University Dr Husam Al-Khadash

  2. CHAPTER 1 THE DEVELOPMENT OF ACCOUNTING THEORY

  3. Introduction • What is theory? • What is the relationship of accounting research to accounting theory?

  4. Accounting Theory Defined

  5. Structure of Accounting Theory InformalApproach Accounting Theory Accounting theory is somewhat like a cloud, i.e. not well-defined.

  6. STANDARDS Accounting Theory and the need for accounting framework PRINCIPLES ASSUMPTIONS

  7. Accounting in practice is Recognition

  8. Research Methodology • Deductive approach • Inductive approach • Scientific Method

  9. Deductive Approach • Begins with the establishment of objectives • Next definitions and assumptions are stated • A logical structure for accomplishing the objectives based on the definitions and assumptions is developed • Attempts to “theorize are generally based on the deductive approach

  10. Inductive Approach • Making observations and drawing conclusions • Generalizations are made about the universe based upon limited observations

  11. The Scientific Method • Involves the following steps: • Identify and state the problem to be studied • State the hypotheses to be tested • Collect data necessary to test the hypotheses • Analyze and evaluate data • Draw a tentative conclusion • Most accounting research found in academic journals uses the scientific method

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