Accounting as a discipline has no theory Essay

report is concerned with the collection, abridgment and communication of economic instruction, which screwing be apply to make decisions and plans just about production line by various users. The Committee On Terminology of the American Institute of certified Pubic Accountants delimit immatures report as follows invoice is the art of recording, classifying, and summarizing in a significant manner and in equipment casualty of m maviny, transactions and events which argon, in ag one at least, of a fiscal character and reading the results in that locationof. (Ahmeo Riahi-Belkaou, sc anyywag 32) accounting is tell to be a language used to communicate information to battalion. Accounting is in addition an intellectual rectify and a profession. Moreover, write up is soci entirelyy readyed and practiced by wad for people, which influence workings and relationships in society. contract upon more than The stages of consumer buying decision work at essayThe history of accountancy stretches second to when the first ancient news report musical ar regularisement began, which was origin totallyy found on measuring and recording activities, and then the significant matter of double-entry bookkeeping around the 15th century, as a basis for further business relationship breeding that consequently resulted in novel Ango-American explanation in the 20th century. Whereas business relationship was mainly an internal matter where the proprietors were block to the business, the growth of companies led to the fate of stewardship business relationship. As a result of further industrial increase, ever-changing social environment and formation of professional bill corpse bodies, the chronicle possibleness should systematically develop in unison with importance of score in advanced(a) society. In recent years, more and more theorists start to assess the disposition of history possible action as well as argue whether thither is an story possibleness or non.In this essay, I am going to exam the definition of news report surmisal and result evidence to master the existence of a unload score system opening.A speculation is defined as a readiness of be redos (concepts), definitions and propositions that beat a systematic emplacement of phenomena by specifying relations among variables with the purpose of apologiseing and announceing the phenomena.(Kerlinger, 1964, page 11) gibe to this definition, the pedagogy explanation as a discipline has no possible action impliesthat as a plain, explanation has no a crystalline primp of concepts and definitions to explain and predict the phenomena. Obviously, the subject of accounting broadly covers all the phenomena in the scope of accounting. In this sense, the accounting supposition refers to a world-wide perform accounting scheme which is a transpargonnt couch of principles and concepts to explain and predict all the phenomena.Before ex amine the character of accounting scheme, I need to hunch where the theory come from. A fundamental bearment of a theory structure is that it must come to basis with the conditions of knowledge. (Mathews & Perera, 1996,page 52) Simply, the theory is from knowledge, the big question, how do we know what we know? such(prenominal) as, the principles of logic. Correspondingly, one of main characteristics of a theory is a body of knowledge. The reputation of knowledge is the domain of epistemology, which is concerned with the nature and derivation of knowledge, the scope of knowledge and the reliableness of claims to knowledge. Accounting is social constructed and practiced by people and people in terms of its roles. Consequently, Knowledge comes from people. In accounting, we want to sacrifice knowledge and theories of accounting help us to understand accounting better. But there was a big problem arose in accounting in relate to the wishing of a knowledge base.In position to s olve this problem, SSAP 2 as a first step to provide a knowledge base for accounting was introduced in1971, which defines accounting bases, accounting policies and fundamental accounting concepts such as, going concern, prudence. Afterwards, more accounting standards were developed. Particularly, collective report was introduced in 1975 which identified a number of user groups. But disparate users normally require dissimilar information. The conflicts of interests of information and the in concordant of accounting standards resulted in the development of a conceptual manakin.Some people argue that a comprehensive accounting theory has not existed at the bewilder time. First of all, I will instance a conceptual example to disclose this argument according to the following report In recent years both(prenominal)(prenominal) effort has been directed towards ontogeny a general theory for the pleader of practice. such(prenominal) a general theory has come to be known as a conc eptual cloth (Underdown & Taylor, 1985, page 1) A conceptual manikin that attempts to offer the theories and explanations was significantly produced and developed in order to construct a single ordered set of accounting principles and concepts which could explain accounting practice. FASB defined a conceptual framework as a uniform system of interrelated objectives and fundamentals that can lead to consistent standards and that prescribes the nature, function and limits of financial accounting and financial tales. (FASB, 1976, page2)A conceptual framework is tend to provide a more rigorous stylus of setting standards, eliminate the inconsistence between statutory and professional provisions and provide a frame of reference for accountants to address detail issues in the absence of specific standards, for example.An ASB statement of principles issued the qualitative characteristics of financial information. Specifically, comparability assists the development of a conceptual f ramework which tries to measure up the alternatives available to reporting bodies. But the alternatives whitethorn not be absolutely reduce unless a conceptual framework produces the accounting standards on a apprehendly dogged basis. (Mathews & Perera,, 1996, page 109)However, the limitation of a conceptual framework includes the time and greet of prepa balancen. Clearly, it is time consuming and expensive to operate. Particularly, more or less countries with limited economies cannot afford it. Furthermore, a conceptual framework provides too much guidance to accounting and encourages rigidity so that new ideas cannot be easily introduced.If the conceptual framework is poorly designed, it whitethorn only when r individually some of user groups. For example, the currentblood and SFAC 1 Reports go through inadequate recognition to the needs of user groups other than investors and creditors. In addition, the conflict of principles legato exists in the conceptual framework. The illustrative principles ar relevance and reliability in the Statements of Principles. relevance was preferred at the beginning as opposed to prevalence of reliability later. Therefore, a uniform conceptual framework may be unenviable to compass on the basis of inconsistent developments so lede to the impossibility of a general ordered accounting theory.On the other hand, Hendriken and avant-garde Breda argue that an general accountingtheory as to a perspicuous set of principles is possible at present. They define accounting theory as a coherent set of hypothetical, conceptual, and pragmatic principles forming a general frame of reference for inquiring into the nature of accounting. (Hendriksen, E.S., 1977, page 1) The main objective of accounting theory is to provide a coherent set of logically derived principles that serve as a frame of reference for evaluating and developing accounting practice.I strongly do not agree with this statement, because there be some evide nces could prove that there is no such an accounting theory involving a coherent set of principles and concepts. First of all, the to begin with given example, conceptual framework, proved that it is difficult to hit it on the nably coherent basis at present. For example, economic ratio analysis predicts the future information ar made base on past information. SSAP2 introduced the principles of accrual and prudence which conflict with each other. Specifically, the accruals concept may suggest query and development be carried forward only the prudent concept may require the expenditure to written off in the present period. Moreover, true and fair cyclorama hasnt been defined, but accountants are mandatory to produce the accounts with true and fair determine which depends on their constructed reality, so it is problematical that it business leader be fair to you, but not fair to somebody else.Furthermore, Image that molded accounting theory tries to offer suggestions as to wh at accounting is all about or should be about. In Davis, Menon &Morgans article, quartet different photos were created to influence the accounting theory in the various scopes in repartee to changing social environment. Specifically, accounting was fictional to be objective, as suggested by the count on of historical record. But in recent years, new images have been created for accounting theory, which are current economic reality, the information system and commodity. Accountants now believe that accounting is subjective. Hence, the subject and object conflict with each other. We in addition have to chit-chat in what context each image is presented other than see it on its own. For example, the public commodity image has emerged in the context of a regulate environment. Therefore, no one image can fullycapture the essential aspects payable to subjectivity and new images are being created to add new dimensions to future accounting theories.Moreover, other images which Sol omon and Tinker debate about were created for domination of theory and practice of accounting. Solomon, a traditionalist, advocates neutrality or objective as opposed to the deal of Tony tinker, a grouping thinker. In addition, image that influences accounting theory could be partial or one-side results from view of reality can be produced partly and rather one-sidedly. In other words, accounting theorists created the various images by justifying their views of reality based on observation of social phenomena. Accounting as a discipline has no a complete theory cod to the lack of a coherent set of principles and concepts in the scope of accounting and the changing social environment.According to American Accounting Associations Committee on concepts and standards, they concluded that no single politics theory of financial accounting is moneyed enough to encompass the full range of user-environment specifications effectively, hence, there exists in the financial accounting lite rature not a theory of financial accounting but a collection of theories which can be set out over the differences in user-environment specifications. (American Accounting Association, 1977, page 1-2) It is indicated that no one single accounting theory applies to all the user-environments but a collection of theories could. For example, different users need different information. Investors need profit information and creditors are satisfied with cash flow information.abdominal aortic aneurysms conclusion proved once again that there is no a complete general accounting theory. In fact, at present no single accounting theory can affect all the user-environments because different users demand different information. We in any case live in a labyrinthine and changing society so that accounting theory only can achieve its compliant objective in one particular time, such as, image. No one accounting theory can as well as explain and predict all the phenomena. True and fair view is st ill a myth, how can accountants practice with such a view? A conceptual framework is still developing for trying to achieve a complete general accounting theory.On balance, I agree with this statement accounting as a discipline has no theory. I am of the popular opinion that in the subject of accounting, there is no a general complete accounting theory which is a coherent set of principles and concepts to explain and predict all the phenomena. I have proved with some examples that some of principles and concepts are inconsistent, such as, relevance and reliability, and as well it is noticeable that accounting theory is partial and one-side, such as, image, because images that shaped accounting theory were captured through theorists different view which could be partial. Changing social environments also influence images.Clearly, each image only emerges in a particular context and period, as suggested by Davids. In addition, the sketchy of a conceptual framework which tries to con struct a coherent set of principles to explain the practice proved the absence of a general accounting theory. The entire cigarette strongly against the Hendriken and Van Bredas opinion which a general accounting theory have emerged. However, a conceptual framework is still improving so I personally believe that a complete general accounting theory could be achieved in the future in accordance with the complete of a conceptual framework due to the development of accounting in response with the development of modern society.BIBLIOGRAPHYAhmed Riahi-Belkaoui(2000) Accounting surmise, 4th Edition, Thomson Learning.Mathews & Perera (1996) Accounting theory & development, 3rd Edition, Nelson.Underdown & Taylor (1985) Accounting Theory & Policy Making, Heinemann.