Accounting Theory Essay

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[. . .] It is also the reason the rich continue being rich while the poor struggle in their poverty. It is the reason there are estates for the rich and those for the middle class, as well as, those for the poor people in the society. Secondly, economic inequality is the reason there exists the various social divisions. These include the classification into either, rich, super wealthy, middle class or poor. These social divisions have created their underlying problems for the society. Additionally, the inequalities in the society cause underachievement. Capital allows people to have access to means of production; hence, enabling them to achieve greater heights of success (Richards, 2009, p. 78). However, due to inequality, those with potential to become successful do not achieve the levels of success desired due to inequality; thus, underachievement in the society. Lastly, the heightened levels of criminal activities are due to inequality within the society. If capitalism ensured equality and people had equal opportunities to advance, it is clear that there would not be the high levels of criminals. Therefore, as it is evident, the increased differences and inequality in the society is a leading cause of distress. Thus, it is essential that society and world economies adopt measures to regulate social inequality.

Various delegation meetings and congregations continue to contemplate and politic on measures to adopt to regulate the subject of capitalism. Nonetheless, it is necessary to note that capitalism is unavoidable. Despite the many challenges and problems associated with social inequality brought by capitalism, it has its positive aspect. It ensures the continuity of success as people strive to achieve higher standards of living. Therefore, eliminating capitalism would simply collapse all the economies of the world. In this case, it is only fair to establish regulatory measures for capitalism (Dorling, 2010, p. 77). To move towards balancing the inequalities within the society, alternative regulations should center on developing the practice of public provision, mutualism and privatization industry. The regulations should focus on curbing the practices of capitalist corporations and shareholders to ensure that there is a just society, which does not exploit others. Therefore, it is true that, to create a just society, free from capitalism, or with limited capitalist activity, there is a need to create regulations, and stringent regulations for that case. Politicking about capitalism and inequality is not the solution to the issue (Scott, 2009, p. 67). The solution is in regulatory measures to facilitate justice in the society and democracy in economic strengthening and growth.

Resort to the types of normative speculation and presumptive methodologies are abrogation of the scientific commitment to understanding real accounting issues.

Accounting constitutes the language of business as it enhances the skills an entrepreneur needs to manage the finances of the venture. Therefore, it is correct to state that accounting is the science in the field of business. Accounting is a science in the sense that, like other sciences, it requires application of a set of principles. These principles are similar to the scientific principles that govern the practices in the subject (Saudagaran, 2009, p. 80). Additionally, accounting is a science as it applies concepts and objectives that are particulate to given set of circumstances. Again, the science of accounting applies two fundamental qualitative characteristics. These fundamentals are consistency and comparability. Therefore, as science is subject to changes depending on the situation in the process of analysis, accounting also varies with the circumstances at hand; thus, necessitating switching between the methods and theories of accounting.

Scientific theory entails a comprehensive explanation of a given aspect of natural occurrence, which comes after a vast indulgence of evidence that supports the idea or conclusion. The conclusion comes after repeated observations by the investigating parties, who then demonstrate the truth in the findings. Therefore, accounting as a subject of understanding, it entails several theories that relate to the observations within the practice (Watts & Zimmerman, 1986, p. 60). These theories in accounting attempt to make predictions within the business environment as observed from the occurrences within the industry. This is a scientific approach that existed before and still exists to date, despite the challenges to the practice. There are new methodologies and practices in accounting as a subject that are abrogating this scientific commitment towards understanding the issues in accounting. These new methodologies include normative speculation and presumptions.

Normative statements entail outlining and stating how things ought to be. They present evidence of what should be and its value should be. Normative speculation is; therefore, an integral part of the life of humans (Richards, 2009, p. 118). It is using normative speculation that humans develop the fundamental aspects of life. For instance, people prioritize goals, organize, and plan their thought, belief action and emotions on various subjects such as politics based on normative speculations. Therefore, as it indicates, normative speculation is a practice that people employ in their daily lives. Additionally, the process of making presumptions is a common practice with humans. It is common for a person to conclude on course of action by presuming what the future holds. These methodologies of the natural life activity are evolving and are creeping into the world of accounting. These methodologies have developed into full concepts that are applicable in accounting practice (Davis & Feng, 2009, p. 26). The application of normative speculation in accounting keeps the predictions of the future in the course before the scientific commitment to understand the issues are complete. The normative speculation practices are taking over the process of making conclusive accounting theory that is reliable and applicable on the long-term. Nonetheless, despite the shortcomings of the normative speculation and presumptive methodologies, they are becoming an abrogation for the scientific commitments in understanding the issues in accounting practice.

Alternative methods, which had underlying ontological and epistemological positions different from those of the positivist program that dominated Western thinking

A positivist thinking borders along the lines of exploring the social reality based on the philosophical ideas of greater philosophers or phenomenon in the environment in question (Nikolai, Bazley & Jones 2010, p. 101). In accounting, it is traditional in the western thinking that the surrounding of the study provides the means of generating knowledge. The framework in positivist thinking entails set principles and assumptions. The assumptions include empiricism, determinism and generality. This means that there is empirical analysis that is quantitative analysis and generalizing of the findings or ideas found correct. In determinism, the events in the study are because of circumstances. Empiricism entails collection and analysis of verifiable evidence in support of hypothesis and generality is making an overall observation. However, in view of these methodologies, the need for alternatives to understand the ontological and epistemological positions became evident.

These alternate methods of understanding these positions were anti-positivist. The anti-positivist alternatives emphasized on the view that social reality is personal, and the conclusions come from the ideological positions of the person. Therefore, from these measures of understanding the subject in study, knowledge generation is from the personal experience rather than that imposed from outside. This ensures the aspect of verification of the data used to make conclusions. This alternative presents the opportunity for accounting theories to explore and understand the subject in question without limitations of errors in the findings. Additionally, another alternative sought to explain the happenings is the critical theory (Nikolai, Bazley & Jones, 2010, p. 121). As the name suggest, this alternative came with the feature of turning the study into investigation format. This method of understanding the positions in accounting, opposed to positivist, adopted three types of knowledge. These include the technical intelligence of the empirical information. Secondly, it involves practical interest to understand the situation and lastly, an emancipating concern to give provision and growth advancement to the other party.

The systematic changes in accounting cannot be explained by regulation or the political process effect

The professionals in accounting, as well as, politicians and SEC often say that the interests of accounting standards should be and must be free from politics (Davis & Feng, 2009, p. 56). However, the political effect is a familiar experience and part of the world people inhabit. This means that it is difficult to establish a distinct boundary between the changes within accounting practice and the politics of the surrounding. The changes caused by various standards enacted in the accounting practice have adverse impacts uncertain identifiable corporate interest. These impacts may negatively inflict ache into the corporate featured in those regulations. However, despite the connection between politics and regulations in place with accounting, they still do not explain the systematic changes accounting practice (Butler & Watt, 2007, p. 111). For instance, it is not evident from the regulations or politics, why the following changes occurred. The changing of the activities involved, including the theories employed to understand and define the market in question (Jiambalvo, 2009, p. 99). In this practice, there are several theories applicable in understanding the contact of the corporations. However, regulations in… [END OF PREVIEW]

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Accounting Theory.  (2013, September 23).  Retrieved February 18, 2019, from

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"Accounting Theory."  23 September 2013.  Web.  18 February 2019. <>.

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"Accounting Theory."  September 23, 2013.  Accessed February 18, 2019.