Positive Accounting Research

Question: What is the Positive Accounting ? Answer : Introducation Positive Accounting theory provides the explanation and prediction about the unobserved phenomena (Watts and Zimmerman, 1990). The unobserved phenomenon is not related to future action only but to the events that have taken in the past but has remained unobserved. Watts and Zimmerman has used the Positive Accounting Theory with the assumption of rational human behavior. (Milne M, 2001). On the other side positive accounting research is the program which is part of the wider intellectual scientific project. The title of the article is Positive Accounting Research A wider Scientific Project. The objective of the paper is to understand the cause and effect relationship in the world as defined in the paper. Author has considered the positive accounting as a part of the huge scientific project where the research program is undertaken to analyze the human behavior along with the cause and effect relationships therein and evaluating how much contribution will be made or has been made by th e so adopted research program towards the wider scientific project. The objective has been followed throughout the paper starting from the introduction and closing with the conclusion by providing suggestions in order to have greater contribution towards the scientific project. The structure of the paper has been divided into eight sections and abstract of the study. Each section has its own relevance and is interconnecting. It begins with the introductory paragraph then describes the scientific project. With the proper understanding of the aim, author has detailed few examples for positive research in accounting in the next section and has laid the methods for evaluating and testing the research program using hypothesis testing methods and other statistical measures. At the end conclusion with proper suggestions has been given. In this way and keeping the aim in mind, the paper has been drafted for the benefit of its users and for the awareness of people about the positive accounti ng research program. Summary of the paper The main aim of the article is to understand the cause and effect relationship in the world by treating the positive accounting research program as part of the wider intellectual scientific project. Further, the main argument of the author is to analyze how much contribution the said understanding will made to the wider intellectual scientific project. With the application of various paradigms, author has found the Kuhns model as the best to fit in the positive accounting research program. Though various theoretical models have been detailed and discussed in the paper including regression models, hypothesis testing, poppers model, etc, but the author has considered the Kuhn model as the best one. Secondly he argued that though the positive accounting theory laid down the reasons for particular accounting phenomena but it cannot be applied in the other sectors of the positive accounting research. (Sterling R, 1990) Author then argued some questions which are of the humanities rather t han of science. These questions have been argued out of the theories made in the past. For instance, what is it like to be a human being? This is basically asked by the philosophers and the same has been construed by the author and it indicates that the scientific research has run parallel with the social research. The main contribution that has been made by the author in his paper is that he has created awareness of the users with regard to the positive accounting approach and very intelligently quoted that the users shall have patience for the results as the problems are always bigger in non rational factors and other social factors then in case of physics or chemistry research. And to further reduce the time, testing techniques have been given using poppers model and other statistical measures (Christenson C, 1983 and Popper, 1959). Thus, to summarize the article, new facts and figures have come out for positive accounting research. Positive Accounting Research Question The main argument of the author is the research question that has been raised in the paper. The question is that whether the research program has been successful one which has described the cause and effect relationship in the world and has been able to evaluate the contribution it has made in the wider intellectual scientific project as being a part of it. The hypothesis that has been carried in the paper is that particular theory cannot be falsified because of any observation whereas an observation can easily made a selection between two or more theories. The argument and the hypothesis have been followed throughout the study. It has been more enlisted with the help of real example of Pioneer spacecraft wherein it is argued that its speed is relatively lower than then as assumed by the general relativity concept. The auditing literature has been adopted by the author. He has tested the hypothesis using Poppers model for auditing firm. He has defined dependent variables on the varia bility of which the function will go up and down. It helps in establishing the acceptance of the argument at the end of the study. In the current scenario, the argument that the author has raised and the research question that has been developed in the study is very important. It is because positive research program if adopted will not help the personnel working in complex organization but also help the country to increase its GDP by prioritizing the areas where cause effect relationships are required to be analyzed along with their contribution to the overall project of the organization or country concerned. Theoretical framework Without any kind of infrastructure or framework, any research or any kind of work cannot be carried upon. It is majorly due to the reason that framework provides the platform where the work can be performed or the research can be undertaken with the due care. Framework may be of different kinds, it may be of theories or practical or mental. In the current study, the author has developed wide theoretical framework throughout the study. He has started with the Watts and Zimmermans application of Positive accounting theory in assessing the accounting phenomena which is caused by the rational human behavior who are self interested or self centered. After, quoting the same he has mentioned that the positive accounting theory is a part of positive research program as the latter is the broader concept. Then the theories about scientific research project have been explained. The theory has been created by the author himself and carries the following hypothesis: World exists which is totally independent Events happened in that world are part of it Requires people to carry out the observation very carefully of the events that is being happened and The purpose is to understand the world. The purpose of the said theory is to understand the world which is itself is first part of the argument that author has made which is to understand the cause and effects relationship in the world. After this, author has described the theories of Gorgias who argued that: Nothing exists In case if something exists then no one has knowledge of it In case anyone has knowledge of it then he cannot be able to communicate the same to others. Inclusion of such theory in the research program will make the research even more difficult as it has laid down which is in total contrary to the argument of the author and the research question that has been developed. Similarly, he has quoted the theory of Theologians who have refused to have look in the sky through the Telescope on the false reasons that the telescope will show something else than what we have been taught in the classes and so on. With these kinds of theories research program cannot be initiated in any manner. To carry the basic objective the author has listed some theories of positive accounting research which has again built the theoretical framework of the research program. It includes model of Fukuyama who suggested that the self centered and rational human behavior is correct in eighty percent of the cases, Gibbins and Ittner et. Al. theory who have examined behavior in account settings without assuming that the rational human behavior exists. It includes how auditors charges audit fees, how auditors give their opinions, etc (Gibbins, 1984). Thereafter he has listed theories for scientific ontology and epistemology which has again mentioned difficulties which makes impossible to have an understanding of the cause and effect relationship or understanding the causes of accounting phenomena. One such difficult is human agency hypothesis. If the humans have free will then the causes may easily be motioned for their actions. But in case of agency, the actions are directly controlled so it cannot be predicted easily. But exceptional cases occur in almost all the case from 0% to 20%. After this the author has carried out the hypothesis and falsification testing in regard to auditing literature. He has applied logarithm and other statistical measures. In this way, the author has developed the sound theoretical framework from the beginning till end at each and every stage of the paper. The Significance and limitions Throughout the literature, the theory has limitations. In the beginning of the paper it is worthy mentioned that although the positive research program has been powerful but it has been suffered by following deficiencies: Creation of Vague Theoretical models Blind faith on the testing of hypothesis Zero interest in the financial parameters of testing Improper replication of the procedure defined by theories, thereby having impatient attitude towards the results and Using the theories for qualifying the data rather than testing the explanation and predictions so as to analyze the cause and effect relationship. Author has stated that the Kuhn model fits into our research program as it helps in solving the puzzles in fast manner (Kuhn T, 1970). But on the other hand he has mentioned that Kuhn model ignores the requirement of generating contribution towards the wider intellectual scientific project. Thereafter, he has said that due to this deficiency in Kuhn Model, there is a need to anticipate bad event which may happen in future and therefore new models may be developed. Further while explaining the scientific research project, he has developed the theory on his own imagination and criticized in the manner that if such theory exists then the research program can never be completed with fruitful results. Similar limitation has been acknowledged by him in the theory of Sophists Georgias and Theologians. He has not given much weight age to findings made by Watts and Zimmerman study as Positive Accounting Theory and rather has kept it as tool for denoting the Positive accounting research progr am as bigger concept than positive accounting theory. The main importance of the paper is that the hypothesis and testing have been done by using auditing literature. Auditing is an independent concept and following it as illustration has added competitive advantage to the paper. In this way, the paper is important as it has made contribution towards the scientific project. Conclusion Positive accounting research has been considered as part of the intellectual scientific project. The research program has been conducted in order to understand the cause and effect relationship of the world in the study. The paper has defined various theories for positive research program and has conducted the hypothesis testing. It has also laid down the requirements which help in conducting the successful completion of positive research program. Though the positive accounting research program has gained importance only in the field of accounting phenomena but with the introduction of the paper the research program has gained importance in the every field. To conclude, the paper so defined is useful. References Milne M, (2001), Positive Accounting Theory, Political Costs and Social Disclosure Analysis : A Critical Look, available on https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.199.7620rep=rep1type=pdf accessed on 13/12/2016. Sterling R, (1990), Positive Accounting : An Assessment , ABACUS, pages 98-130 Christenson C, (1983), The methodology of positive accounting. The Accounting Review 58 (1), 1-22. Kuhn T. S., (1970), The structure of scientific revolutions, 2nd Edition, University of Chicago Press, Chicago. Popper, K.R., 1959, The logic of Scientific Discovery, Routledge. Gibbins, M., (1984), Propositions about the psychology of professional judgment in public accounting, Journal of Accounting Research Watts R. and Zimmerman L. (1990), Positive Accounting Theory : A Ten YearPerspective,availableon https://faculty.etsu.edu/pointer/watts%26zimmerman2.pdf accessed on 14/12/2016.