Accounting theory essay

Order Positive accounting theory Positive accounting theory PAT is a general term for any theory that provides descriptive information regarding the behavior of accountants. In looking at the apparent acceptance by politicians, firms and wide publication in academic journals PAT could easily be mistaken as being a success. A deeper analysis of the premises of PAT, its questionable scientific status, and the groups upon whom this theory has appealed to would suggest that it is flawed on many levels and is little more than an argument for deregulation and market capitalism.

Accounting theory essay

About the Author We may not always know it, but we think in metaphor. A large proportion of our most commonplace thoughts make use of an extensive, but unconscious, system of metaphorical concepts, that is, concepts from a typically concrete realm of thought that are used to comprehend Accounting theory essay, completely different domain.

Such concepts are often reflected in everyday language, but their most dramatic effect comes in ordinary reasoning.

Because so much of our social and political reasoning makes use of this system of metaphorical concepts, any adequate appreciation of even the most mundane social and political thought requires an understanding of this system. But unless one knows that the system exists, one may miss it altogether and be mystified by its effects.

For me, one of the most poignant effects of the ignorance of metaphorical thought is the mystification of liberals concerning the recent electoral successes of conservatives. Conservatives regularly chide liberals for not understanding them, and they are right.

Liberals don't understand how anti-abortion "right-to-life" activists can favor the death penalty and oppose reducing infant morality through prenatal care programs. They don't understand why budget-cutting conservatives should spare no public expense to build prison after prison to house even non-violent offenders, or why they are willing to spend extra money to take children away from their mothers and put them in orphanages in the name of family values.

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They don't understand why conservatives attack violence in the media while promoting the right to own machine guns.

Liberals tend not to understand the logic of conservatism; they don't understand what form of morality makes conservative positions moral or what conservative family values have to do with the rest of conservative politics.

The reason at bottom is that liberals do not understand the form of metaphorical thought that unifies and makes sense of the full range of conservative values. To understand what metaphor has to do with conservative politics, we must begin with that part of our metaphor system that is used to conceptualize morality -- a system of roughly two dozen metaphors.

To illustrate how the system works, let us begin with one of the most prominent metaphors in the system -- the metaphor by which morality is conceptualized in terms of accounting.

Keeping the Moral Books We all conceptualize well-being as wealth. We understand an increase in well-being as a "gain" and a decrease of well-being as a "loss" or a "cost.

When two people interact causally with each other, they are commonly conceptualized as engaging in a transaction, each transferring an effect to the other.

An effect that helps is conceptualized as a gain; one that harms, as a loss. Thus moral action is conceptualized in terms of financial transaction.

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Just as literal bookkeeping is vital to economic functioning, so moral bookkeeping is vital to social functioning. And just as it is important that the financial books be balanced, so it is important that the moral books be balanced.

Of course, the "source domain" of the metaphor, the domain of financial transaction, itself has a morality: It is moral to pay your debts and immoral not to.

When moral action is understood metaphorically in terms of financial transaction, financial morality is carried over to morality in general: There is a moral imperative not only to pay one's financial debts, but also one's moral debts.

The Moral Accounting Schemes The general metaphor of Moral Accounting is realized in a small number of basic moral schemes: Reciprocation, Retribution, Restitution, Revenge, Altruism, etc.

Each of these moral schemes is defined using the metaphor of Moral Accounting, but the schemes differ as how they use this metaphor, that is, they differ as to their inherent logics. Here are the basic schemes.

Accounting theory essay

Reciprocation If you do something good for me, then I "owe" you something, I am "in your debt. The books are balanced.

We know there is a metaphor at work here partly because financial reasoning is used to think about morality, and partly because financial words like "owe," "debt," and "repay" are used to speak of morality.

Even in this simple case, there are two principles of moral action. Moral action is giving something of positive value; immoral action is giving something of negative value.

There is a moral imperative to pay one's moral debts; the failure to pay one's moral debts is immoral.

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Thus, when you did something good for me, you engaged in the first form of moral action.Accounting Theory These questions are from the Text Book – Scott, W.R., Financial Accounting Theory – 5th Edition, Person Prentice-Hall, ISBN: Question 1: From Chapter 4 (Efficient Securities Markets) Question Zhang () examined revenue recognition practices in the software industry.

Accounting theory and its application is very fundamental to students and professional in accountancy. It equips people in the accountancy profession with financial accounting theory and associated research.

Relevance of this theory is that it provides accountants with knowledge to critically investigate and analyze contemporary accounting issues. essay is to critically evaluate the usefulness of the accounting theory to practicing accountants today.

It will provide a general assessment of information asymmetry and the fundamental problem of accounting, and it will also briefly discuss the normative and positive accounting theories and their usefulness to practicing accountants.

The Moral Accounting Schemes. The general metaphor of Moral Accounting is realized in a small number of basic moral schemes: Reciprocation, Retribution, Restitution, Revenge, Altruism, etc. Each of these moral schemes is defined using the metaphor of Moral Accounting, but the schemes differ as how they use this metaphor, that is, they differ as to their inherent logics.

Positive accounting theory (PAT) is a general term for any theory that provides descriptive information regarding the behavior of accountants.

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Positive Accounting Theory | Essay Example