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The Development of Accounting Theory: Understanding its Structure and Methodologies

Explore the relationship between accounting research and theory, the informal approach to accounting theory, and the scientific methods used for research. Delve into deductive and inductive approaches, principles, and assumptions in accounting theory. Gain insights into the essential standards and frameworks in the accounting field.

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The Development of Accounting Theory: Understanding its Structure and Methodologies

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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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