Accounting Theory and Current Issue PAT

Question: Discuss about the Accounting Theory and Current Issuefor PAT. Answer: Introduction The main topic of this paper is to analyze positive approach in the field of accounting research. The critique is mainly intended to critically analyze the selected article namely Half a Defence of Positive Accounting Research in systematically for exploring areas of strengths and limitations. The key arguments of this paper are related to the way of conducting accounting research by using the positive approach. In this critique paper, the arguments are presented for the practice of Positive accounting theory (PAT) in the systematic manner. The paper includes article summary, research question, framework based on theories, articles importance and limitations and summary to examine the arguments of the selected article effectively. Summary of the Article In the selected article, researcher examined the positive approach to conduct accounting research. In this, positive accounting research is explained as one of the key academic branch of a scientific research in which explanation over the cause and effect relationships is significant. The researcher seeks to determine the importance and limitations of PAT based on the conducted academic projects. Ontology and epistemology perspectives of the accounting research programs including positive approach is also analyzed in this paper to access the deficiencies of accounting research practice in against to the actual accounting needs. In this, positive accounting research programs are considered as way to explain and causes of particular human behavior in the real-world accounting settings (Dunmore, 2010). For example: firms reactions towards newly proposed accounting standards and law and the basis of selecting accosting policies. A range of accounting and auditing literature is reviewed in this article to understand key problems with the ways and methods of performing accounting research actually. Its consequences in terms of developing wide and accurate research project are also determined. This article includes analysis over some aspects of positive amounting research including the model of developing theoretical models and the logic of hypothesis testing for critically analyzing the difference between the predictable and actual performance of positive approach in the accounting field (Dunmore, 2010). Kuhn view of normal science is advocated to improve positive accounting research due its ability to allow researcher to make scientific study. The current positive approach is indicated ineffective in terms of examining a perspective on scientific basis. Normal science defines standards to find solution of a problem, which focuses on collecting detail regarding a theory without creating questions for the previous assumptions. By considering the perspective of normal science, positive accounting research can be performed more effectively (Bar-Am, 2014). Research Questions or hypotheses In the selected article, there are no clearly defined hypotheses, but at the same time, it is indicated that overall discussion is based on the four hypothesis of scientific research project. The first hypotheses of scientific research program are existence of world beyond the imagination and control in which events cannot be controlled by the human. The causes of such events are the part of this world and it is because, it is not a creation of the outer world. The causes of events can be understood by human by making careful examination (Dunmore, 2010). Due to this, complete disconnection to the world is critical to make right observation for an event. The main intention of using observation is to understand world and the causes of its events to conduct intellectual enquiry with the application of mental models. The researcher in this article seeks only to determine the willingness of suspending ones critical aspect and to sacrifice logic. In scientific enquiry, it is generally assu med that events in this world are caused by the non-worldly things. But, there is still a disagreement regarding the role of human in the events. Human behavior is critically explained in accounting setting is discussed in this research. The main question of this research is to determine the way scientific research program or positive approach is applied in the field of accounting for determining insufficiencies, which are responsible for limiting the ability to conduct a highly scientific enquiry (Dunmore, 2010). The reasons of ineffectiveness of positive research in accounting field are determined. The above questions and perspectives of the selected article are critical to examine the process of knowledge development in the scientific enquiry of accounting field. This would be useful to determine the deficiencies of positive accosting research and to bring improved changes. It may help to improve the quality of conclusions are made in the research regarding different accounting standards and principles (Fink, 2013). The results of this research are likely to increase reliability and relevancy of the accounting research. The value of the developed research questions is flowed from the included literature reviews as in this range of accounting and auditing literature is used to quote different examples of scientific ontology and epistemology in positive accounting research. The literature of this article is effective to provide sufficient evidences of testing theories, models and conceptual framework of accounting research based on the positive approach. The literature also provides theoretical bases to explain the existing processes and methods in the positive research accounting to consider the inclusion of scientific approach (Cottrell McKenzie, 2011). Thus, the literature firstly analyzes the application of positive research in accounting field and then provides suggestions to conduct more scientific study in accounting field with the use of positive approach. Theoretical Framework The theoretical viewpoints of past studies are included in this article to develop a theoretical framework to analyze the implementation of positive approach in the field of accounting. The key theoretical perspective of this research is PAT, which seeks to predict the choices and reactions of accountants for the accounting principles and standards across differing firms. It mainly concerned with the accountants behavior in the accounting settings of a firm. This theory argues that firms organize and present them efficiently through the use of accounting principles and standards (Van Mourik Walton, 2013). It is indicated that accounting phenomena is a result of rational self-interest of the parties, which are interacted in the organizations through express or implied contracts. PAT theory includes the analysis of real events of accounting field to develop predictions regarding the thinking process behind the dveloplement of financial reporting for accounting transactions. The adoption of PAT in real organization mainly requires elimination of self-interested human behavior as it could lead to the more reliability, relevancy, understandability and comparability in the financial reporting of an organization (Chambers Dean, 2013). Karl Poppers theory of falsifiability is also a key element of the theoretical framework of the selected article. On the basis of this theory, scientific evaluation positive approach of accounting is performed. The criterion of falsifiability is applied in this article to examine whether it is possible to establish the falsifiability in principle within the positive accounting research. In accordance to falsifiability criterion, a theory can only be scientific if its falsifiability can be established in terms of principles (Kaldis, 2013). By using this theoretical perspective, the scientific nature of the positive accounting research is examined. The explanation of a theory in the measurable manner is critical to make it scientific as outer and inner aspects have potential to influence the observation and knowledge on which basis scientific principles and standards are developed. This indicates that personal experiences and biasness can influence the prediction and examination of fir ms choices for accounting standards and reactions over the newly proposed accounting standards. The influence of experiences on the personality and behavior is also indicated through the inclusion of causal theory of human behavior (Duncan, 2011). Learning plays a mediating role in developing behavior and personality on the basis of experiences. Apart from this, the concept of audit-fee is also used to develop theoretical perspective in this article in which it is indicated that fee of auditors is closely related with complexity and quality of auditing (Jalilvand Malliaris, 2013). Kuhns normal science theory is also a key theoretical element of this article. By including principles and assumptions, this theory is explained and discussed. This theory indicates the importance of common paradigm to ensure the presence of scientific nature in a theory. The theory of normal science considers the problem-solving nature of science and thus the success of each theory is not critical (Bar-Am, 2014). Normal science theory encourages researcher to conduct in-depth study and to adopt puzzle-solving approach to conduct a scientific enquiry. Due to this, theory of normal science is regarded as an important way to determine limitations of positive accounting research. On the basis of Kuhns normal science theory, the researcher has detaile d the insufficiencies in the implementation of positive approach in the accounting research and practice (Kuhn, 2012). The Significance and Limitations of the Article By reviewing the selected article, some significances and limitations of the article are also identified. Data collection method of this article is the key strength of this article as due to this range of diverse opinions and views regarding the application of positive accounting research is included in the article. This allowed researcher to justify the favorable and unfavorable arguments for the application of positive approach in the accounting research, which contributes in increasing the significance of this articles content and knowledge. The inclusion of existing literature from the accounting and auditing discipline enabled researcher to develop relevant theoretical framework for the study by considering different concepts and theories (Cottrell McKenzie, 2011). This method of data collection facilitated a good approach to answer the research question properly and carefully. The framework of this study is also one of the key strengths of this article as it provided a way to answer the developed research question in the systematic manner and to generate the relevant findings. The structures feature of gradual assessment of the relevant theories and arguments related to the research question enabled researchers to understand the limitations of positive approach in the particle accounting research. The assessment of different theories and identified limitations of positive accounting research is followed by informed recommendations and conclusion, which also enhances value of this articles content to improve the application of positive approach in the accounting field. Ontology and epistemology perspectives of positive research is also examined the on the basis of theoretical framework. However, the more emphasis on the theories makes this researchs outcomes less practical. The practicability aspect of this article is less strong, which may affect its significance. Apart from this, there are several theories are used in this article to justify and present the arguments regarding the positive accounting research (Dunmore, 2010). This article lacks consideration over the limitations of theories, which may affect the relevancy and reliability of the presented arguments regarding positive accounting research. At the end of the research, some recommendations are provided to apply the positive approach in accounting research effectively. The suggestions also emphasizes on theories rather than practicability. The included theories are discussed effectively to indicate the areas of weaknesses and required improvements in the current approach of implementing positive approach in the accounting field. This article does not highlight the ways to which suggested methods can be applied in positive accounting research (Dunmore, 2010). It makes the results of this study less useful for the users, which limits value of this article for addressing the limitations of positive accounting research. Conclusions On the basis of above discussed article, it can be stated that developed and presented critiques in this article is quite useful to understand the positive accounting research in context of the real settings. This article includes meaningful discussion over the related concepts and theories. Several theories such as PAT, Poppers falsification, normal science and causal human behavior theories are presented and discussed in this to analyze positive research in the accounting field. The deficiencies in the construction of theoretical models, hypothesiss testing models, inclusion of quantitative aspects and analysis of qualitative data is determined in this article, which affect application of PAT in practical research. However, lack of viability is determined in the methodology that has potential to affect the researchs outcomes. References Bar-Am, N. (2014). The Structure of Scientific Revolutions, 50th. Philosophy of the Social Sciences, 44(5), 688-701. Chambers, R. J., Dean, G. W. (2013). Chambers on Accounting: Logic, Law and Ethics (Vol. 6). UK: Routledge. Cottrell, R. R., McKenzie, J. F. (2011). Health promotion and education research methods: Using the five-chapter thesis/dissertation model. USA: Jones Bartlett Publishers. Duncan, S. M. (2011). How Free Will Works: A Dualist Theory of Human Action. USA: Wipf and Stock Publishers. Dunmore, P.V. (2010). Half a Defence of Positive Accounting Research. Retrieved From: https://www.massey.ac.nz/~pvdunmor/HalfaDefence.pdf Fink, A. (2013). Conducting research literature reviews: From the Internet to paper. USA: Sage Publications. Jalilvand, A., Malliaris, T. (Eds.). (2013). Risk management and corporate governance. UK: Routledge. Kaldis, B. (2013). Encyclopedia of philosophy and the social sciences (Vol. 1). USA: SAGE. Kuhn, T.S. (2012). The Structure of Scientific Revolutions: 50th Anniversary Edition. UK: University of Chicago Press. Van Mourik, C., Walton, P. (2013). The Routledge Companion to Accounting, Reporting and Regulation. UK: Routledge.