Accounting Theory and Practice Reflection Essay

If some research is undertaken that provides evidence that capital markets do not always behave in accordance with the Efficient Market Hypothesis, does this invalidate research that adopts an assumption that capital markets are efficient?

At the end of 2011, retained earnings for the Bisk Company was $1,750. Revenue earned by the company in 2011 was $2,000, expenses paid during the period were $1,100, and dividends paid during the period were $500. Based on this information alone, retained earnings at the beginning of 2011 was

Firstly, it is crucial to acknowledge of the Positive Accounting Theory. According to Deegan & Samkin (n.d.), Positive Accounting Theory explains and predicts accounting practice and does not seek to determine particular actions. For instance, which accounting policies will be choosen by firms and how newly proposed accounting standard will be reacted to by firms (Deegan & Samkin n.d.). In the same report, the author claims the first aspect of Positive Accounting Theory, which is “Explanation” means providing reasons for observed practice. For example, positive accounting theory pursues to explain why historical cost accounting continues being used by firms and why convinced firms switch between a numbers of accounting techniques. The second factor, which is “Prediction” indicates that the theory predicts “unobserved phenomena” (Deegan & Samkin n.d.). The author clarifies that this phenomena is not necessarily a future phenomena, they

B) that is created when fair value accounting is adopted but is not subsequently adjusted.

III. From a perspective accounting, what are the “rules of game” that businesses must follow?.........................................

Financial accounting is a subjective area that strives to provide complete and accurate information for the end user. Before the class discussion, I felt accounting was more of a science than an art – if you tested items and they fell into a certain parameter, it was an accurate representation of the facts and figures under review. The class discussion and another person’s experience has caused me to rethink this perspective because when one considers the variables incorporated into financial accounting, it is not as simple and clear cut as some would like to think. Hines (1988, p. 252-253) states “having the full picture – a true, a fair view of something – depends on people deciding that they have the full picture. Sometimes, they later decide they did not have the

CF is the new controller for the consumer division of ABC company. In the past five years, ABC’s earnings have grown by at least 15% annually, with the consumer division’s earnings growing by over 20% annually over the same time-period. In the 4th quarter of the current year, however, it is projected that consumer’s income will grow by 8% and ABC’s will grow by 10%. ML, consumer division’s president, wants CF to take some of the following “end of the year” actions in order to improve consumer’s reported earnings. Under the previous controller, these types of actions were more or less taken as acceptable practices.

ABSTRACT The theorising in accounting prior to 1970 was rejected as not providing sufficiently general theories. Informed by theories in economics and finance (and other disciplines such as psychology) and with the aid of computers, attempts to theorise accounting took a new direction. Large data collection and analysis emphasized a purportedly more systematic empirical approach to developing theory. Key words: accounting; neo-empiricism;

Accounting is the social science that studies, measures, analyzes and records the heritage of organizations, businesses and individuals, in order to serve in decision-making and control, presenting the information previously recorded, systematically and useful for different stakeholders. It also has a technique that produces structured and systematic quantitative and valuable information, expressed in monetary units on transactions made by economic entities and certain identifiable and quantifiable economic events that affect it, for the purpose of providing it to the various public stakeholders.

Accounting’s Positivistic Tendencies: Overlaying a Social Science with Pure Scientific Rationale
Tutorial 5 - Week 6

Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate social and environmental performance or are they merely a public relations vehicle? Answer this question by reference to a variety of accounting theories.

Accounting is one of the most important business resources. It helps to organise, gather and manage numerical data of a business. Most businesses are interested in making a profit, therefore, it is vital for a business to control its costs by setting budgets so that this helps to ensure there is a sufficient of cash flow within the business. The role of accounting does not necessary be dealing with money, it could help and produce statistical data to assist decisions making of a business.

Accounting, a practice which goes back many millennia, arises from the concept which Britton and Waterston (2005, p. 03) believe came about when managers (known then as stewards) had to “account for their stewardship of the owners’ money”. Fundamentally, this idea brought forward by Britton and Waterston, is possibly a leading factor when trying to understand what accounting is which is defined by the Institute of Chartered Accountants in England and Wales

The aim of this essay is to discuss the main rationales for the existence of financial accounting. In order to discuss in perspective the main rationales for the existence of financial accounting, the rationales will be looked at separately. When it comes to positive rationales it will be focused on its assistance in decision-making, its international recognition and usefulness for external stakeholders, while for negative rationales it will be focused on the fact it relates to the past, the quality of the financial documents and legal tax evasion using financial accounting.

Following correct Accounting procedure is an important factor for the success of an organization, specially in today’s competitive business environment the theoretical part of Accounting was taught elaborately by the instructor. The practical implementation of theory is also important. Alltex Industries Limited has expanded in last few years. To acquire particular knowledge and to supplement our theoretical study, this was included in course curriculum to orient with the present business world. It was an opportunity for us to compare the theory in the context of practical business environment.