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Key words
Accounting theory; Positivistic research; Interpretative research; Critical research;
Decision-usefulness theory; Mainstream accounting research
1 Introduction
Both
the
International
Accounting
Standards Board (IASB) and the Financial
Accounting Standards Board (FASB) are
committed to developing principle-based
accounting standards (IASB 2008: para. P4;
Bullen & Crook 2005:1). A significant
question is whether the underlying
principles of accounting are sufficiently
developed to create appropriate accounting
standards. A related question is whether the
principles of accounting are sufficiently
developed in accounting theory.
Coetsee
Accounting theory may also be used to explain
existing practices to obtain a better
understanding of them. But the most important
goal of accounting theory should be to provide
a coherent set of principles that form the
general frame of reference for the evaluation
and development of sound accounting
practices.
3 Major developments in
accounting theory
Two major developments in accounting
occurred in the 1960s and early 1970s, and
these have had a significant influence on
Through the decision-usefulness orienttation, the focus shifted from the principles
of accounting to the outcome of the
accounting process the information that is
provided. A more detailed discussion of the
possible effects of decision-usefulness
theory is provided in section 5.
Over the last two decades, many scholars
have been calling for accounting to enter
the broader research domain of the social
sciences (Reiter & Williams 2002:602;
Baker & Bettner 1997:294). They argue
that accounting is a human activity that
should include all research approaches
included in the social sciences, such as
interpretative, critical and behaviour
Coetsee
Coetsee
Coetsee
methodological perspective and an emphasis
on quantitative methods, is incapable of
addressing accountings complex social
ramifications.
frameworks.
Laughlin
(2007:278)
summarises the current status of decisionusefulness as follows:
decision usefulness and its interpretation
in relation to one set of stakeholders (financial
providers), has largely persisted. The softer
decision usefulness, stewardship emphasis,
which still privileges finance providers, has
dominated standard setting by the UKs
Accounting Standards Board (ASB), and the
IASB and their respective forbears. However,
a stronger decision usefulness emphasis, with
its continuing emphasis on the information
needs of finance providers, is currently
gaining new ground with the initial chapters in
the conceptual framework that the IASB and
the FASB have recently published (IASB,
2006). Unlike in previous eras, this new
framework seems set to expunge stewardship
reporting and remains largely indifferent to
the information needs of any other
stakeholders apart from finance capitalists).
10
accounting itself.
Inanga
and
Schneiders
(2005)
suggestion that the decision-usefulness
theory is a grounded theory has not been
academically tested. Such a suggestion can
only be upheld if the method or
methodology of grounded theory is applied
to accounting to confirm that such a
grounded theory for accounting exists. Only
when this theory-creation methodology is
applied to the decision-usefulness approach
can the question about whether or not a
grounded theory has been created be
answered. Without such an assessment, it is
doubtful whether the decision-usefulness
approach creates a theory or base for
accounting research. Mattessich (1993:182)
for instance, asked
whether, for the sake of a more practiceorientated theory, it might be worth the while
to revive the more or less abandoned
normative paradigm or research tradition.
Coetsee
11
12
Coetsee
7 Conclusion
This article investigated the potential role
that different types of accounting theory
and research play in developing consistent
accounting
principles.
The
article
acknowledged that no comprehensive
theory of accounting exists, that accounting
principles are not solely the result of
academic research and that current
accounting practice through its standardsetting process has contributed much more
to the development of accounting
principles. It is therefore important to
consider the link, if any, between
accounting theory and research, and the
standard-setting process.
In the process of considering the
perceived role that accounting theory and
research play, the discussion focused on the
normative and descriptive (or the more
modern
positivistic)
approach
to
development of accounting theory, the
positivistic
nature
of
mainstream
accounting research, a possible decisionuseful theory of accounting and the role of
interpretative and critical research.
Traditionally, the view has been
expressed that theory is created through a
normative
or
descriptive
approach;
however, the more modern view is that
accounting theory could be created through
a normative or positivistic approach. In
accounting research the application of the
normative approach was replaced by the
13
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