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Introduction Accounting Theory: An Effective Tool for Managing Changes

   

Added on  2020-02-03

9 Pages2426 Words373 Views

TABLE OF CONTENTSIntroduction......................................................................................................................................3Aim and Objectives..........................................................................................................................3Research question............................................................................................................................3Theoretical Frame work...................................................................................................................4Significance and limitation of the Article........................................................................................4Conclusion ......................................................................................................................................7References........................................................................................................................................82

INTRODUCTIONPositive accounting theory is the effective tool that provides detail information related toreal world events and translate all these predictions into accounting transaction (Williams, 2014).It stats that firm has to be prepared for the changes and managers have to choose such accountingmethods through which they can present the firm's performance significantly. This concept hassome positive and negative aspects. Report will critically discuss about positive accountingtheory. In addition, assignment will discuss the hypotheses and its values in order to find out theeffectiveness of the model (Martínez‐Ferrero, Gallego‐Álvarez and García‐Sánchez, 2015).At the end of the study, significance and limitation of the article will be described in this report.AIM AND OBJECTIVESThe main aim of the study is to identify the effectiveness of PAT accounting theory. ObjectiveTo understand the conceptual framework of positive accounting theoryTo identify the significance and limitation of the article based on positive accountingtheory.To investigate effectiveness of the PAT concept.To recommend accounting methods that can support in preparing the good accountingreports.RESEARCH QUESTIONIn the present study researcher has used the statistical hypothesis testing which has beenconsidered as effective tool. With the help- of this, actual objective of the research can beaccomplished. It is commonly used in the quantitative positive accounting research (Nassar,Uwuigbe and Uwuigbe, 2014). In the null hypothesis test is being done in computerized manner.In the present report hypotheses used by the scholar are appropriate and able to understand theeffectiveness of the PAT theory. It has discussed that facts are based on the imagination and noone can control over the wishes. That shows that facts and figures of accounting transactions canbe changed any time so managers have to be prepared for the modification and they have to beprepared accordingly (Djatej and et.al, 2015). This hypothesis are able to draw a literaturereview. In the study investigator has used both methods qualitative and quantitative. So it can be3

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