Evaluation of article of Positive Accounting Samples for Students.

Question: What is the applicability of present positive accounting research? Answer : Introduction Positive accounting is a branch of academic accounting research that is contrasted with normative accounting(Bowen, 2008). The article Half a defense of positive Accounting Research by Paul V Dunmore examines the various concepts related to the scope of positive accounting research. The term positive accounting was formed and developed by Watts and Zimmerman who formed the theory. The scope of this paper evaluates a broader framework for understanding and applicability of positive accounting research in accordance to human behavioral setting(Lennox, 2011). Poppers falsification criteria fail to test logic for statistical testing and superficial analogues. Existing models and theoretical frameworks are rather casual in nature that has heavy reliance on testing hypothesis. The scope of this report identifies the framework for positive accounting research by completely reviewing of the article. The pertinent research questions are identified from the same article along with the theoreti cal framework and significance of the article(Malmi, 2009). The article has provided useful information and inputs for formation and growth of the stream of positive accounting framework. Summary of the Article The article evaluates relevant concepts regarding positive accounting in a broader sense with explanations in accordance to human behavior. Positive accounting is an extremely useful concept hence it is examined according to ontology and epistemology of the program(Gaffikin, 2007). While defining positive accounting it has to be accommodated that it incorporates a wider framework of research which is scientific in nature and analyses by means of cause-and effect relationships(Smith, 2014). Accounting in contemporary organizations involves less human interventions and more of interpersonal complex systems that are used for decision making and information processing. Conducting accounting research by way of ontology and epistemology enables overcoming shortfalls and challenges incurred in positive accounting research(Hopwood, 2007). Positive accounting research has been conducted by multiple researchers has been unable to explore and make contribution towards application of projects. Auditing literatures will be able to make positive contribution towards development of positive accounting research. Through well-established social systems positive accounting research will be able to achieve its real purpose. Kuhn (1970) initially suggested a concept for a disciplinary matrix approach which rather appears to be a paradigm for making an intellectual contribution(Dunmore, 2011). Lee (1997) also supported the paradigm proposed by self-replicating such data. The article is based on scientific proceeding by incorporating in random data collection with reliable information. There has been various positive research in accounting undertaken by Watts and Zimmerman. Their contribution is remarkable as they devised a theory for it by expressing an operational phenomenon. However, there are a large number of controversies on this given model as it is a fundamental model which cannot be defended in qualitative terms(Gow, 2010). The ways that managers deploy in for making decisions depict that there might be a number of ways in which accounting information might be presented. The usefulness of this article is in examining the gap that exists among positive accounting research and the applicable research which are practiced. Kuhn proposes a real world view of the aspect of positive accounting unlike Popper, who had proposed hypotheses for testing and applicability. Popper believes that testing of hypotheses and analyzing their results can yield valuable insights into accounting practices. The scope of this research proposes a puzzle that can be solved and applied by researchers in the field. Positive accounting research can be viewed as a nexus of contractual view of the company by providing an accounting tool for facilitation and performance. The publication made is complaint paradigm that established high rejection rates. Thus, from the findings of the research it can be established that Type I error is new and unexpected in nature thus, can make significant contribution. Many researchers who view positive accounting to be deficient can make use of this journal and extend the work. Poppers criteria is focused on falsification and hypothesis testing through collected data. There are many researchers who rely on statistical procedures for testing their claims and in building of theories. But there are several potential weaknesses associated with the statistical procedure itself. Hypothesis testing fails due to technical issues multiple number of times. Comparison with Pioneer anomaly further reveals the weakness associated with the results. However, as accounting data is subject to a series of measurement error and noise there remains role for statistics in positive accounting research. but the central theme of utilization of statistics should be to apply it in making of estimation rather than incorporating in for hypothesis testing procedures. Positive accounting research provides a wider endeavor that is scientific in nature, for incorporating in human behavior and in understanding complex behaviors of organizations. In practice world decisions are influenced by way of control systems and specialized information, thus it cannot have weak methods for drawing inferences. Positive accounting research needs more of theoretical models that can have applicability, they need to also provide scope for improvement. Further these models needs to be as accurate as possible in nature, either horizontal or linear in approach. Theoretical models needs to be tested and developed with experimental capabilities hence have to have an analytical approach. But the scope of positive accounting research has remained aloof from empirical tests. Models proposed by Feltham and Ohlson (1995) offer some path for testing their propositions. Focus of positive research needs to be on measurement which offers shift from testing. Choi et al. (2009) offe rs audit complexity and strength from legal regime which are related to each other. Hence, while testing and measuring concepts needs to be detailed and cleared for understanding. Thus, all the studies conducted are more replication after replication rather than proposing something new. The objective behind replication is to explore the limits of previously suggested models and reflect on the sampling errors of them. Thus, extending the approach of earlier research work done and providing applicability for the same. Research The scope of this study and article has evaluated various pertinent research questions that have been evaluated throughout the scope of the research(Kabir, 2011). Some pertinent theoretical questions are as follows; Theoretical Framework The thesis statement proposed in contemporary accounting research evaluates mechanisms that shape financial statement information making approaches(Ahmed, 2007). The first approach discussed here is focused on investors while the second one is focused on managers. Hence, the first approach proposes that financial statements are for investors, this is the main approach identified by primary accounting research. This views has also gained support from financial reporting standards setting boards and key textbooks for accounts. Thus, the primary focus of the theory remains that investors are the audience for financial statement information. Therefore, it draws from this that financial statements need to be regulated that can protect investors from frauds and conspicuous reporting(Larcker, 2010). But then also investors do not base their decisions solely on financial reporting and capital markets functions as avenues that help mitigate financial risks. While investors avert opportunists views of managers the sole reliability of the theory is to protect the status of investors. Thus, arises scope for providing an alternate way whereby a separate point of view can be established. Fundamental requirement for critical qualitative research for theoretical models has to provide applicable limits. Hence, studies needs to valuated competing theories while treating a theory that can examine wider data sets(Kothari, 2010). Through positive accounting human behavior or approaches to accounting can be established. There are theories present which cannot be challenged and applicability is assumed compared to evidencing them. The outputs from these various theories consists of uninterruptable coefficients that might or might not be consistent across samples. Hence the need for a theory was released and positive accounting theory was established(Bisman, 2010). Significance and Limitations of the Article The significance of this article is in approaching positive accounting research by way of ontology and epistemology which had not been attempted earlier(Oler, 2010). The new line of research was extremely powerful in determining ways and means that accounting can progress. The research done within the article has made several serious contributions as mentioned below; It has been identified that there is a need for development of a theoretical model that can be highly specific and vulnerable(Barth, 2008). There was a need of a model that can be applied and be used for further research of scholars. The need of a model which can easily be tested and structured was high as it was insufficiently developed. The model has provided means for measurement that can be operationalized. While selecting a model for application functional attributes of the same needs to be formed and linear relationship with other concepts needs to be made(Melis, 2007). The reliable measure can act in favor of audit as well by depiction of correct parameters. While most models deals with testing of hypothesis, this model proposes parameters for measurements. Measurement with significant skill and results was estimated by use of this model(Tjosvold, 2008). Finally the article provides validation of conclusion from testing of hypothesis for confirmation of accuracy for extending limits of research. Conclusion The area of positive accounting research has made tremendous contributions to wider number of projects due to its applicability. The key objective of the paper is to identify the various forces that help shape financial statement information. There are two viewpoints that have been analyzed in the study. While predominant research in the field suggests investors viewpoint being the key driving force, the scope of this paper examines epistemology and ontology of positive research. The paper addresses the key gap areas which current researches in accounting does not account for a successful research program. Though there remain several suggestions for quantitative positive research, yet there remains to be a need for theoretical models that are specific and vulnerable for detailed testing purpose. As several models in is positive accounting research have failed to make serious impacts, accounting relationships are merely expressed in terms of signs that can link two variables. There is immense number of elaborate models for the purpose of analytical research but they are not structured well such that they can be implemented or can be operational in nature. Hence, the paper draws on a stable model that can function well and be applied in the aspects of positive accounting research. The scope of this paper might not be provide much enhancement to the human knowledge but will be useful for researchers who are willing to make positive contribution in the field. Reference Ahmed, A. S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. . Journal of accounting and economics, 411-437. Barth, M. E. (2008). International accounting standards and accounting quality. Journal of accounting research, 467-498. Bisman, J. (2010). 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