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A critical evaluation of the usefulness of financial accounting theory to practicing accountants

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Freelance Psychology Writer
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Paul B.
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documents in English
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9 pages
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  1. Executive summary
  2. Introduction
  3. Behavioral accounting research
  4. Importance of behavioral accounting research
  5. The Limitations of behavioral accounting research
  6. Ethics Consideration in behavioural research in accounting
  7. Lessons learnt
  8. Conclusion
  9. Bibliography

When I started this course, I was told by a very competent person that Financial Accounting Theory or ACC3116/5216 is about theories which relate to financial accounting practice to help students develop skills as accountants for doing bookkeeping, applying accounting standards, and exercising judgment and making decisions. From this alone, I say that the course, Financial Accounting Theory, is useful for practicing accountants today. Furthermore, although the course was designed for students, specifically to introduce students to popular accounting theories, to help the students explore the incentives or motivations that exist when making financial reporting decisions or evaluating the decisions of others, and to improve students' written communication skills and critical thinking skills; practicing accountants are not perfect. They still need to be continually updated on the changes in the accounting field specially changes in accounting theories. They still need to improve their decision making, analytical, and communication skills. And what better to do these than the Financial Accounting Theory course? Sometimes a practicing accountant, whether he or she is an auditor, manager or company accountant, needs to touch base with the profession. Through the course's introduction, a practicing accountant can do this. The course's introduction talked about what is meant by accounting theory, how theories developed over time, and how theories are actually formulated and tested

[...] After all it is these financial accounting theories that practicing accountants evaluate and quantify business transactions, and they need to be aware of the limitations of these theories which reflect on the limitations of the number or numbers that they communicate to the users of the financial information they create. Now, the third module of the course is as equally important as the first two, or even the rest of the course's modules. This module is about the conceptual framework of accounting which every would-be and practicing accountant need to go over and over again so as not to lose sight of the importance of the information they convey to the users of the financial information they communicate. [...]


[...] This research helps us to understand better the judgements and decisions made by both accountants and auditors and, in turn, how these judgements and decisions affect the end users of accounting information. In turn, this increased understanding will help us to improve our ability to exercise judgement and make financial reporting decisions. Behavioral research in Accounting was established as an experiment by the Accounting, Behavior and Organizations (ABO) Section of the American Accounting Association (AAA) in 1989, based upon the perceived need for a quality research journal dedicated solely to behavioral accounting (Meyer & Rigsby 2001). [...]


[...] & Holder-Webb, L ?Rethinking the influence of agency theory in the accounting academy', Issues in Accounting Education, vol no pp. 17-30. Den Uyl, D. J new crusaders: the corporate social responsibility debate', Studies in social philosophy and policy, no Social Philosophy & Policy Center, Bowling Green State University, Ohio.Easton, P. & Eddey, P relevance of asset revaluations over an economic cycle', Australian Accounting Review, vol no Donaldson, T Corporations and morality, Prentice-Hall, Englewood Cliffs. Dowling, J. & Pfeffer, J ?Organizational legitimacy: social values and organizational behavior', Pacific Sociological Review, vol no pp. [...]

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