Contemporary Accounting Theory: Kuhn's Paradigm Shift Analysis

This report delves into the application of Thomas Kuhn's theory of scientific revolutions and paradigm shifts within the context of contemporary accounting theory. It begins by outlining Kuhn's framework, explaining how accounting principles can be viewed as paradigms and how changes within the f...Read More

Running head: CONTEMPORARY ACCOUNTING THEORY
Contemporary Accounting Theory
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Contemporary accounting theory
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

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Contemporary accounting theory
Executive system
The purpose of the report is to offer an aspect of the khun’s theory and the usage of
Kuhn’s description of the alteration as an device to understand the effect of the financial
atmosphere on accounting and the succeeding change that has give the idea in the accounting
system. The model of Kuhn has been castoff to intricate the scientific base of the
investigation on accounting principles. The clarification from the investigation can help in
developing an impression about the differences in the bookkeeping strategies and might lead
to alteration and broader response of the revolution that is happening. Additionally, the
description covers a aspect of the model of chamber on accountancy and its condemnation.

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Contemporary accounting theory
Introduction
The concept of financial accounting has been altering from the very commencement
of the notion of accounting had been presented by the father of accountancy Lucca Pacioli.
The persistence of the statement is to concept an edifice that will recompense to the treatise
that in line to these developments. The enflamed standing on the fair value writing, the re-
assessment of the theoretical agenda the improvement of the uncomplicated financial
statement, and the plummet near the philosophies in the direction of methodology-based
accounting provide the proof of the continuous advancement of the accounting system.
Discussion
Literature review of Kuhn’s explanation on paradigm shift and framework of scientific
revolution.
The renowned investigator Thomas Kuhn in his book the edifice of scientific
revolution describes the substance that sources a setting of associate to change paradigms,
what occurred through the procedure of alteration and the influence on repetition as the
variations happen. The exploration of Kuhn however emphases on the patterns and uprising
in the background of the solid sciences, though, the process that he describes provides a
profound information regarding the variations in the community science also (Smith 2017).
The residue of this report will increase our conceptualisation of paradigm and the
shifts that is happening in the concept of Kuhn’s framework. This report first exploits Kuhn’s
theory to clarify how accounting fundamentals can be pronounced as a paradigm and why the
change in focus is a revolutionary movement (Sengupta & Shanahan 2017).
Implication of paradigm shift in nursing

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Contemporary accounting theory
By searching replies to ontological and epistemological queries, nursing scholars
exposed the foundation of nursing and uttered the implication of nursing science from
abundant theoretical lookouts. This ongoing exploration for development and growth of
nursing bring into line with the idea of usual discipline by Thomas Kuhn. (Younas & Parsons
2019).
Historical progress and pattern shift in public health nutrition science, guidance and
policy actions.
The scientific substance has well-versed nutrition direction and strategy. By means of
an account combination technique and absorbed by Kuhn’s theory on the association of a
scientific uprisings, this paper appraisals the historical growths of the public health nutrition
pointing to comprehend the appearance of main scientific paradigms, paradigm vicissitudes
and sign well-versed way and policy (Ridgway, et al 2019).
Gap in literature review
Inference of paradigm shift in nursing
This article speaks a diminutive about the consequence of Kuhn theory on nursing
only but the Kuhn theory also conceal many other ideas like finance, science, management
and so on.
Expansion and paradigm shift in public health nutrition science, direction and strategy
actions
This web article considers only about the paradigm shift in public health and nutrition
science but Kuhn covers the complete field of discipline so there is a little evidence in the
article regarding the theory of Kuhn.
Change in the problems to be solved

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Contemporary accounting theory
The second features of a revolution are an change in the aberrant that are to be
elucidated. Problems underneath the industrial model frequently interchanged round the
measurement and acknowledgement of the price and returns. One significant substance in the
evidence paradigm is in what way the fair value will be assessed. In a fortitude to solve the
substance, the FASB distributed concept, by means of cash flow evidence and present value
in accounting dimension (Blum, et al 2017).
Another key problem to be solved in the in the information paradigm is how to
identify the revenues in the in the income statement. Particularly in the industrial economy,
revenue was included on the income statement when it is actually realised and earned. This
definition presented several anomalies in the industrial paradigm resulting in the issue being
addressed for several times. One specific important issue will be how changes in the fair
value will be recognised on the income statement. In the industrial paradigm some fair value
changes are recognised on the income statement. Finding a solution top, the issues related to
revenue recognition is critical to successfully move to the information paradigm (Schmelzer
2015).
In short it can be said that the types of estimates and judgements used in determining
fair value are much different than those used in the allocation of cost. It has been observed by
many accounting practitioners is that find it difficult to estimate the fair value, using
consistent approaches to make estimates to represent substantial improvement from the
historical costs. In order to make the estimates and judgements associated with valuation,
accounting professional has to find out new set of skills to solve that problem (Harrison
2017).
The contribution of chamber in the accounting theory.

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Contemporary accounting theory
In the pre 1956 period of the twentieth century, academic accounting was mostly
communicative of the practice of accounting. this fundamentally descriptive method was
undisturbed to question its own procedure for rigour and consistency. This issue is referred to
by chamber’s who regretted the lack of thoughtful, methodical intellectual fundamental
accounting theory as the enunciation of the practice. If it is virtuously practical in design,
then no obvious law can strengthen it. Practice does, however, assume inherent hypothesizes.
simply only some indefensibly unclear hypothesize, such as the disagreement from
traditionalism could be inaugurated as a hypothetical promise (Thomas Nelson & Silverman
2015). This is nearly implicit pragmatism. It could be expressed in the following points:
 Current practices have endured and changed over a long period of time.
 Permanency necessitates the expediency and achievement of the enduring technology.
 The permanency principles get more assessment in the accounting practices.
 The sole reasonable area of theoretical question in accounting is to explain current
practices.
This general approach is overdetermined in a number of characters. It is not clear that
permanency involves the optimality of present practice. It is not clear how a decently
historical method to theory could address embryonic problems in a lively environment.
Myriad sources, may apprise existing accounting, thus we cannot know whether its
practicality and accomplishment are the products of capture, or some other factor perplexing
its unbiased dominance. From this it is required to discard the misperception of the point 4.
However, as eminent before it was, this method that triumphed in the first half of the
twentieth century (Kaya 2017).
There are clarifications to disbelief the excellence of this initial method to accounting
question. It is only conceivable to very insecurely conclude the hypothetical basis to such a

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Contemporary accounting theory
method. More than this it is not vibrant that the supposed hypothetical base, the dispute from
conservatism, is chiefly intelligible as a relative to accounting theory (Leech 2016).
.
The upsurge of the normative theories
During the period of customary inductive imperial accounting theory, and
following to it, academic accounting revolved to emphasis on the normative accounting
theory from around the mid 1950’s. Almost from 1956 to 1970 normative accounting
theorists come to the front, trying to advance a common theory of accounting. The method
functioned in a commonly logical mode and hesitated among the true income method and the
user needs method. Among academics contributing to the logical/ normative approach to
accounting theory was framed by chambers. As a standard example of the inner consistency
gaining from such a theory and the imaginable limits of it, the conversation goes to reflect
chambers theory (Hassan & Mingers 2018).
Positive accounting
The concept that chamber contribute for the contribution of the positive accounting
theory was by the innovation of the continuously contemporary accounting. The main issue
that inspires continuously contemporary accounting was that investors need to identify the
exit value of the company at any point. Underlying the view was chambers preference for
information on firm flexibility relative to a dynamic business environment. Where the present
discussion differs is in the referent basis to reporting as an issue tied to investor interest in the
firm as a dynamic element of its environment. Fundamental to this position is that investors
specifically exchange the adaptability of cash for the expectation to superior returns particular
to the going concern assumption of specific firms (Merkl-Davies & Brennan 2017).

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Contemporary accounting theory
Chamber introduced the concept of continuously contemporary accounting concept.
The characteristics of the of cocoa lies in its approach to the subsequent measurement of
assets. He claimed that the value of assets can not be measured on monetary value only but
also on the useful life value of the asset. The concept states that the going concern basis of
the accounting can not be ceased only on the basis of the value of the assets. The
measurement of the vale of the asset s and liabilities are the most essential part of accounting
and thus these can not be neglected. According to him the deficiencies in accounting concepts
are related with the improper valuation of the assets and liabilities. There fore the dealing of
the calculation of the value of the assets and liabilities become the most essential part
chambers theory (Khorasani & Almasifard 2017).
In his theory he made important distinction between the measurement and valuation.
according to him measurement is a function of accounting and accountants are to relate with
facts and communicate them to users. On the other hand, valuation is related more with the
expectation of the future benefits that an organisation can get from the underlying assets. (van
Steenbergen et al 2017)
Criticism and acceptance of chamber’s theory.
The continuously contemporary approach of chamber has been extremely
disapproved. The chief motive to discard chambers concept of CoCoA is that the theory aims
at the accounting valuation constancy and standardisation though it is unsuccessful to do that.
Chamber claim that the mixed characteristic dimension (net present value, value in use,
realizable value and replacement cost, or historical cost) are substituted by a remarkable
method (Becker Wiedemann & Kühn b2018).
The 2nd reason of the condemnation is that the financial reports are
continuously, and essentially flawed depictions of a company’s process. They should not be

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Contemporary accounting theory
be comprehensive descriptions. It is the role of a normative accounting theory to start
restriction to sustenance the maximum conceivable accuracy of these summaries (Kelly
2018).
Some different critics of chamber contended that the notion of chamber is irreverent
to the notion of going concern and that the assessment procedure used by chamber is not
correct from any argument. They specified that the cocoa notion is incorrect as it does not
reflect any methodical technique of assessment. The criticizers demanded that the procedure
of assessment of the properties are not specified obviously and that as per the technique of
chamber the properties will be underrated and that will not benefit to provide a fair and
translucent interpretation of the financial statements. The chamber’s theory is not satisfactory
as the theory provide importance only in the assessment of the asset and not the liability side
of the balance sheet.
Conferring to chamber the going concern concept is based on the organisation’s
ability to adapt with the altered atmosphere and to withstand in long-term. The upcoming of
the organisation is not reliant on the lifespan of properties of the company but with the
utilisation of the properties that are acquired by the organisation.
Functioning the cocoa model in a situation of unavailability of market selling price is
another area of condemnation of chamber’s opinion. Chamber want to demonstrate that the
market values of the assets are available. Nevertheless, in the real-world world few prices
might be easily obtainable than one more, he argued that the firms are always been successful
in finding their prices when they are persisted. But this concept is not right and cannot be
applied in the practical world. The idea of COCOA had failed to demonstrate itself
effectively is in the ability to make operational sufficient sources of the market value
information to readily and inexpensively facilitate accession of withdrawal worth across a

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Contemporary accounting theory
broad spectrum of asset classes other than the traded securities. Despite of the existing
expansion in the information technology it is not probable to instantly gain market values of
exclusively built assets (Orman 2016).
Moreover, chamber does not give emphasis standing on the financial values of assets
and liabilities. When such values are not readily available, they are estimated on the by their
money equivalent values. Liabilities already have contractually stated monetary worth and
the sum of the firm that it is obligated to its wholesalers or financier are directly resolute.
Assumed that liabilities almost always have explicit contractual monetary values, the
explanation of their treatment did not exhaust as much effort as the behaviour of the non
financial assets needs.
On the other hand few distinctive critics of the cocoa concept suspects that chamber’s
theory is immaterial as most of the model specified by him are not applied in the practical
world and that his philosophies are more complex. It is supposed that chamber has try to
convey some new concept in the accounting system but this can not be appropriate since
there are several faults in the philosophies that are agreed by chamber. Chamber’s theory has
mostly assumed importance only on the idea of cocoa and ignored many other parts of
accounting which needs equal position to provide a precise and fair view of the financial
statements. Chamber mostly give stress on the historical values of any assets and not the
current values for that reason the assessment model of chamber become immaterial. Chamber
get popularity as a historian other than a theorist.
Conclusion
In conclusion it can be stated that the application of the Kuhn theory enables us to
gain knowledge about the changes in the accounting policies in the modern era. The
paradigm of changes has been explained in the theory of Kuhn from which it is possible to

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Contemporary accounting theory
get an idea about the fact that accounting principles will follow a sequence of recognizable
steps. In addition to this chamber’s positive and negative approach to the accounting policies
has shown us the methods that ensure more accountability in the preparation of the financial
statements.
Reference
Becker, M., Wiedemann, G., & Kühn, S. (2018). Quantifying insightful problem solving:
Blum, A. S., Gavroglu, K., Joas, C., & Renn, J. (2016). Shifting paradigms:
Cartmill, M. (2018). A sort of revolution:.
Chia, R. (2019). Before and beyond paradigms in organization studies:
Hassan, N., & Mingers, J. (2018).
Kaya, İ. (2017). Accounting Choices in Corporate Financial Reporting:
Kelly, L. J. (2018). Giving Responses Dimension:
Khorasani, S. T., & Almasifard, M. (2017). Evolution of management theory within 20
century:
Leech, G. N. (2016). Principles of pragmatics. Routledge.
Merkl-Davies, D. M., & Brennan, N. M. (2017). A theoretical framework of external
accounting communication:

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Moldoveanu, M. (2019). ‘Organizing’,‘Innovating’and ‘Managing’in Complexity
Space (Doctoral dissertation, Harvard University).
Orman, T. F. (2016). Paradigm” as a Central Concept in Thomas Kuhn’s
Ridgway, E., Baker, P., Woods, J., & Lawrence, M. (2019).
Schmelzer, M. (2015).
Sengupta, P., & Shanahan, M. C. (2017). Open Science,
Smith, J. (2017). Scientific Revolutions as Events: A Kuhnian Critique of Badiou.
Sunder, S. (2015). Risk in accounting. Abacus, 51(4), 536-548.
Thomas, J. R., Nelson, J. K., & Silverman, S. J. (2015).
van Steenbergen, H., Warren, C. M., Kühn, S., de Wit, S., Wiers, R. W., & Hommel, B.
(2017).
Younas, A., & Parsons, K. (2019). Implications for Paradigm Shift in Nursing:
Zalaghi, H., & Khazaei, M. (2016).