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Posted: December 18th, 2019

Accounting Theory and Development Essay

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The methodology is often be “going from the general to the specific” as the research must develop a logical structure for accomplishing the objective then, which based on the definition and assumptions. The validity of any theory developed through this process is highly dependent upon the ability of the researcher to correctly identify and relate the various components of the accounting process in a logical manner. Induction is a method of reasoning by which a general law or principle is inferred from observed particular instances.

Inductive approach emphasis making observations and drawing conclusions from it and is often be “ going from specific to general, because the research generalizes about the universe on the basis of limited observations of specific situations. The inductivist is to draw theoretical and abstract conclusion from rationalizations of accounting practice. Applied to the accounting, the inductive approach begins with observations about the financial information of business enterprises and proceeds to construct generalizations and principles of accounting from those observations on the basis of recurring relationship.

Reading 1. 2 – Accounting theory and development Accounting Theory Construction with Inductive and deductive approach Normative theory vs. Positive theory Normative theory attempts to justify what ought to be, rather than what is. The major criticism of normative theories is that they are based on value judgments. Positive (Descriptive) theories attempt to find relationships that actually exist. Deductive systems are normative and inductive systems attempt to be descriptive. The deductive method is basically a closed, non-empirical system. Theory verification

Theory verification or validation is an integral part of theory construction. According to Popper, the testing of deductive theories could be carried out along four lines. There is the testing of the theory by way of empirical applications of conclusion, which can be derived from. This step is necessary to determine how the theory stands up to the demand of practice. If its predictions are acceptable, the theory is said to be verified otherwise, the theory is said to be falsified. Aspects of theories, their construction and verification Figure 2 Distinguishing features

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