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The article has carried out the critical analysis of the article ‘Half a Defence of positive Accounting Research’ for developing an understanding of the main accounting concepts illustrated in the paper. This article presents the evolution of positive accounting theory since its development in 1970’s. The article examines and analyses the recently emphasised theoretical approach in accounting literature of positive accounting theory. The major weaknesses that limit the application of positive approach in accounting researches are demonstrated by the author in the present research article. The examples of other theoretical approaches that can be used in accounting researches beside positive theory are also discussed in the present research paper. The article has presented the significance and criticism of positive accounting theory from various perspectives. The research article have presented that although positive accounting theory is believed to be based on natural science phenomena it has not proved to be useful in conducting successfully practice-oriented accounting researches (Dunmore, 2009). The essay has conducted critical analysis of the article through summarising its main points, identifying the research question, discussing its theoretical frameworks and illustrating the significance and limitations of the article.
The main points demonstrated through the overall research study has been summarised in the present section. The article has depicted that positive accounting theory is largely used by mangers in large and complex business organisations to forecast accounting procedures. Watts and Zimmerman have developed the theory of positive accounting that is based mainly on the principle of natural sciences. Hence, the theory was believed by business managers to be largely effective in achieving the scientific objectives of accounting researches. The theories used in accounting researches before the development of positive accounting was based on theoretical principles and thus does not prove to be useful in carrying out scientifically based accounting researches (West, 2003). The emergence of the theory of positive accounting based on scientific principles provided a platform to the researchers to carry out broader accounting research programs. This is responsible for the larger use of positive approach in accounting researches presently (Chatfield and Vangermeersch, 2014). However, various authors as depicted in the research article have highlighted about the weakness of the theory. The theory of positive accounting is believed to be incapable in achieving completely the scientific objectives of accounting research (Dunmore, 2009).
The overall research article is based on the argument of effectiveness of positive approach n accounting research in achieving its scientific objectives. In this context, the article has very well-presented the significance and deficiencies of the theory so that the future scope of accounting research can be improved. The author in the article has also proposed the use of better theoretical models by emphasising on the weakness of positive theory in accounting research. The use of positive theory in combination with other theoretical models in conducting accounting researches is also proposed by the author through the research study. This is recommended as it will help in successfully achieving the scientific objectives of accounting research. The evolution of better theoretical models in accounting research than positive accounting theory is essential for resolving accurately complex accounting issues (Dunmore, 2009).
The overall research study aims to develop an answer for the following research question ‘Does positive accounting theory successfully attain the scientific outcomes of accounting research? In the context of this main research question, the research study also seeks to address following sub-research questions:
The identified research questions are based on the overall literature review section of the research article. The critical analysis of the literature review has helped in developing insight into the main aim of the research study and thus identifying its research questions (Dunmore, 2009).
The theoretical framework of the research study is developed on the basis of its literature review section. The theoretical framework comprises of the theoretical views and opinions of different authors on the research topic. The contribution of positive theory in accounting researches has been analysed from the perspectives of various theoretical findings proposed by different authors. The theoretical framework of the research article has illustrated that positive accounting theory is one of the most controversial theory in history of accounting field. The theory of positive accounting was developed in order to explain and predict the accounting events and practices. It was claimed to be based on philosophy of science and thus effective in demonstrating empirical evidences against an observed phenomena (Ghnabari et al., 2016). This was due to this fact that the theory was believed to be extremely useful in explaining the accounting predictions by demonstrating empirical evidences against them. However, the theory was later criticised by various accounting researchers as it does not prove to be useful in explaining the reality of accounting practices. The theory as cited by various authors is based on rhetorical approaches rather than having an empirical base. Thus, it does not seem to be truly effective in achieving the practical outcomes of accounting research (Dunmore, 2009).
Accounting researches needs demonstrating empirical evidences against an observed accounting prediction. However, the positive accounting theory does not succeeded in presenting practical evidences against accounting predictions (Wickramasinghe and Alawattage, 2012). The empirical testing of observed accounting predictions was not possible with the theory of positive approach in accounting. The acceptance of the theory on scientific basis is thus criticised by various accounting researchers as it does not provide a valid explanation of accounting phenomena in reality (Burns and Needles, 2014). The falsification criterion posed by Popper’s has emphasised on the testing of positive accounting theory for its acceptance on scientific basis. The research article has incorporated the use of falsification criterion for demonstrating the demarcation between the theories that are scientific and non-scientific. Popper has demonstrated that the theories based on social sciences are generally not scientific theory as they are not subjected to falsification. The theories of social sciences are not based in quantitative predictions and thus cannot be tested in the parameters of falsification. The theory of positive accounting theory is also based on the phenomena of natural sciences and therefore its acceptance as scientific theory is questionable (Gaffikin and Aitken, 2014). The incapability of the theoretical model of positive accounting to provide practical outcomes further put the theory to be under debate to be used in accounting researches (Dunmore, 2009).
The author in the research article after examining the views and opinion of different authors on positive accounting theory has provided certain recommendations for improving the future scope of accounting research. The author has proposed that better theoretical model should be developed in accounting domain that is effective in explaining accounting practices in reality. The theoretical models developed should be able to demonstrate empirical evidences against observed accounting predictions (Dunmore, 2009). This is highly essential for proving an accurate solution for the accounting issues faced by large and complex business organisations. The theory of positive accounting should be used in combination with other theoretical approaches for attaining scientific objectives of accounting research. The theory of positive accounting itself is not capable in achieving the empirical outcomes of accounting research. The theory is based mainly on value judgment and therefore does not seem to be capable in carrying out empirical accounting researches (Kabir, 2007).
The research study is highly significant as it draws the attention of accountants to develop better theoretical models for examining accounting practices. The influence of positive theory in accounting research has limited the usefulness of accounting research program. The theory mainly based on value judgments is not successful in carrying out empirical accounting researches. In this context, the present research study proved to be of extreme importance as it has emphasised on the development of better and improved theoretical approaches that are capable of carrying out empirical accounting researches. The accounting researches nowadays largely involve the use of positive approach and thus the outcome achieved from them does not prove to be reliable in absence of empirical evidences. This can impact the performance of business organisations by selection of inaccurate accounting method proposed by accounting researches carried with the adoption of positive accounting theory. As such, the research study is highly significant as it helps in improving the scope of accounting field and provides recommendations for improving the outcomes achieved from accounting researches. It has emphasised that the theory of positive accounting theory though largely used in accounting researches is not capable for attaining its scientific objectives. The different perspectives demonstrated on the theory of positive accounting through the research article have highlighted its importance and limitation in order to be used in future accounting researches (Dunmore, 2009).
The article though has effectively presented various theoretical arguments in context of positive accounting research but lacks in demonstrating a comprehensive quantitative analysis son the research topic. The various perspectives demonstrated in the research article are not synchronised adequately and thus the research study lacks a proper flow of theoretical data on the research topic. The qualitative analysis carried out in the research paper is ambiguous and does not seem to be attractive for drawing the attention of the readers. The language of the research article is also not easy to be understood by the readers. The theoretical findings obtained from the research study have largely been impacted by the research methodology used. The resrch methodology used in the present research is quantitative in nature and therefore lacks credibility and reliability (Dunmore, 2009).
The theoretical findings proposed by the authors are mainly on the basis of the varying perspectives proposed by previous researches on the research topic. The author has not presented his own opinion on the research topic through depicting quantitative analysis in support of the theoretical findings proposed. The research methodology has caused the lack of objectivity in research and has made it purely subjective in nature. The theoretical findings need to be empirically tested and evaluated by the future researches before their incorporating in the research studies that will be held in this context in future scenario. The argument proposed by the author in the research study is only examined and analysed with the use of quantitative data. The adoption of quantitative analysis in support of theoretical findings framed from the qualitative analyses would have further enhanced the credibility and reliability of the research study (Dunmore, 2009).
The main aim of the research study was to analyse and examine the deficiencies in positive accounting theory. The author has succeeded in achieving the aims and objectives of the research study through carrying out a detailed qualitative analysis on the research topic. The author has recommended the development of improved theoretical models that can be used in accounting research for achieving successfully its scientific objectives. The scientific nature of positive accounting theory has been evaluated by the author in the overall research study through the help of qualitative analysis. The research study proved to be highly significant in illustrating the shortcomings of positive accounting theory. Thus, the theoretical findings developed from the research study will help to improve the nature of future accounting researches. The main limitation of the research study is lack of quantitative analysis in support of theoretical findings. Also, the qualitative analysis carried out is very wide and does not seem to be attractive in engaging the readers.
Burns, J. O. and Needles, B.E. 2014. Accounting Education for the 21st Century: The Global Challenges. Elsevier.
Chatfield, M. and Vangermeersch, R. 2014. The History of Accounting (RLE Accounting): An International Encylopedia. Routledge.
Dunmore, P.V. 2009. Half a Defence of Positive Accounting Research.
Gaffikin, M. and Aitken, M. 2014. The Development of Accounting Theory (RLE Accounting): Significant Contributors to Accounting Thought in the 20th Century. Routledge.
Ghnabari, M. et al. 2016. PAT (Positive Accounting Theory) and Natural Science. International Research Journal of Applied and Basic Sciences 10(2), pp. 177-182.
Kabir, H. 2007. Positive Accounting Theory and Science. Journal of CENTRUM, pp. 136-149.
West, B.P. 2003. Professionalism and Accounting Rules. Routledge.
Wickramasinghe, D. and Alawattage, C. 2012. Management Accounting Change: Approaches and Perspectives. Routledge.
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