Discuss about the Positive Accounting Research for Accounting Process.
In this report a complete study has been prepared on positive research accounting. This research shows how companies have been facing several problems and hurdles in their accounting process and preparing financial statements. In this report various theories and methodologies have been discussed which provides a critical understanding about how corporation could develop an effective positive accounting. The main critical view has been developed over ontology and epistemology of positive accounting which provides effective evaluation of human behavior in their accounting practice. It is evaluated that positive accounting research is part of wider intellectual project of scientific research which is used to understand the cause and effect relations of the humans in determined approach. This report will start with divulging all the required details of Positive accounting research article which will showcase the present drawbacks of current positive accounting methods. In addition to this, summery of this article will give simple short idea about how all the present and future factors disclosing overall finding and theoretical arguments given in this article. Afterward, research questions have been prepared to reflect the main problems of the given positive accounting article and provide clear hurdles which are faced by humans in their accounting practice. Theoretical concepts have also been discussed which depicts human behaviors, their cause and effect relation with accounting practice. Afterward, this report provides and all the pros and cons and possible limitations which are keeping this positive accounting research article less effective. At last, this report provides the complete conclusion of this article which is accompanied with all the suggestions about how humans could make their accounting practice better and effective as per the auditor’s reviews and disclaimers (Brown, Preiato, and Tarca, 2014).
This article provides adamantine study over the positive accounting practice and humans reciprocal behavior in determined approach. This article provides that there are several independent and dependent factors which influence human behavior. Positive accounting practice allows humans to mitigate possible hurdles in their decision and developed reciprocal behavior. The intellectual program used in this article for making positive accounting practice better and effective is mainstream accounting research program. Positive accounting research theorize accounting phenomena caused by operational of self-interest of humans who interact with each other through implied and expressed contract (Klemstine and Maher, 2014). There are several arguments on positive accounting research that it is based on the human behavior and their reciprocal behavior after evaluating cause and effect relation (Waymire, 2014). Some researchers have divulged that positive accounting practice should not merely base on rational behaviors of humans but it should be based on personal judgment as well. Auditors use their own due diligence to make effectively evaluate accounting practice of corporations. It is further evaluated that when auditors are working under pressure then they would tend to complete their work quickly and there will be more chance of mistakes and errors in their accounting auditing report. In addition to this, another theory focused on the free will of humans in positive accounting (Brown, et al. 2014). It divulges that if humans are free of control and they are allowed to take their decisions based on their own diligence then the decisions made by them would be restricted with their mind capacity and small view points. Behavior of free will provides that if the researchers have taken free will decision then it would invalidate other person’s assumption with the research program. Certainly, in this positive accounting research program, there is no comprehensive and casual theory and statements which reflects certain human behavior and applicability of other theories with the implication of human behavior. It is also depicted that positive ontology and epistemology may provide misleading results to readers in human behavior. This uncertainty have aroused due to anomaly exists in positive accounting research theories. However, the main problem in positive accounting research has aroused due to researchers understanding over positive and quantitative researches are same. It leads to considerable confusion in considering research which provides positive results but qualitative as well. This qualitative research have been used in positive accounting research as there is need to collect data from other sources to develop preliminary understanding of some phenomenon. However, researchers need to evaluate auditor’s disclaimer and their view points to make their research better and presentable to readers. It is further described with the help of using hypothesis testing for quantitative positive accounting practice. In this hypothetical test some null and void hypothesis have been used to evaluate all possible internal and external factors of accounting research (Ahmed, Neel and Wang, 2013).
Further in this article, it is observed that positive accounting contributes to a wider scientific endeavor for understanding human behavior and cause and effect relation in complex working of organization. Therefore, in order to avoid this type of problems in the business functioning auditors and accountant should endeavor toward introducing hypothetical test in its accounting process. This test has been suggested in this article to evaluate all the possible human behaviors actions and reactions in organizations (Everett, Neu, Rahaman and Maharaj, 2015).
Which are the possible hurdles in positive accounting practice?
What is required for successful positive research program?
How positive accounting practice is different from intellectual program?
What are the possible factors which forced to examine ontology and epistemology in current accounting practice?
In this research program there are various theoretical frameworks have been used to evaluate the drawbacks of current positive accounting research program. It is further observed that theoretical models and frameworks divulge how users could increase the effectiveness of positive accounting research in organizations (Engle and Hunton, 2015).
The recent article (Choi et. al, 2009) elaborate that authors have provided that there is concept of audit of accounting which increases the accurateness of accounting. This model put emphasis upon how audit on accounts of organizations provides effective legal regime of accounts. This form of theoretical frameworks suggests that there are several interesting test which could be applied on positive accounting research. This provides that accounting data of organizations are accompanied with several problems and accounting errors which could gradually results into misleading result for humans to take decisions (Fang, et al, 2014). Vulnerability of research program provides that audit fees and managers competency is major factors in positive accounting research. In accounting it is normally that the author provides theoretical model which could be used by accountant in their practical work. In addition to this, these theoretical models assist auditors to develop a clear understanding with its auditing functioning. It is evaluated that if auditors will determine the hypothetical test of account in their auditing functions then it will help them to implement their auditing functioning of positive accounting practice. Another theoretical concept which has been used in this article is related with qualitative positive research. These positive researches have been provided by Darwin’s theory of evaluation. In this theoretical model it has been suggested that there are mainly two purposes to use qualitative measurement in positive accounting research (Dyckman and Zeff, 2014). First is relate with gathering data from the public and second is to implement regression analysis on the collected data to measure its variances in accounting practice. However, this theoretical approach provides auditors behaviors in gauging accounting and auditing data provided by organizations (Li, 2015). This helps in identifying the accountant behaviors and their choice of actions in preparing accounts of company. Afterward, auditors use these human behaviors to detect and rectify the possible errors and mistakes in certain accounting data of organizations. It is hard to see how realistic model of process can be constructed or relevant variables could be measured for qualitative research. In addition to this, if auditors would not take this realistic model approach in their auditing functioning then it would increase the possibilities of type- 1 errors. These would be result of model Mis- specifications. Critical research provides that these theories provides clear view point of world and human behavior which is helpful in gauging humans’ decision and where they could make mistakes in data accounting (Deegan, 2017). The null hypothesis adopted in positive accounting practice also reflects the basis to determine possible factors of human behaviors in accounting data and recording financial transactions in organizations. In addition to this, test statistic under the null hypothesis depends crucially on the auxiliary assumptions. There are several papers either in Americana or international which provides models and measurement issues more seriously to solve mistakes and errors in positive accounting research (Slater, et al. 2014).
The main significance of this research program is to develop an understanding of human behavior of accounting practice. There are several models and research program which provides the human behavior in positive accounting research and cause and effect relation. In addition to this, it is also observed quantitative approach has helped to gather all the required data from the accountant to gauge their reciprocal behavior with the accounting of financial transactions. This positive accounting research provides an effective measurement to analysis the human behavior and their actions. Audit procedure is developed with a view to identify the errors and common mistake sin accounts of company. Hypothesis of data provides all the possible outcomes and decisions of human as per different human behavior. The purpose of this system may not actually be to add to our knowledge of human behavior in accounting- related contexts but to provide readymade answers to accountant which could be solved with high manner. There are several intellectual support system and academics which support to evaluate human behavior and their reciprocal behavior in determined approach (Guan, 2014).
All the research and data collection in this article is completely based on the primary and secondary data. This data may fail to evaluate human behavior and how they reciprocate with particular circumstances. It is further observed that auditors may fail to evaluate all the errors and mistakes in positive accounting practice (Smith, 2014). In addition to this, research prepared on ontology and epistemology is also not effective. It provides less amount of certainty with the collected data. Hypothetical test used in this research is also provides uncertain data based on certain assumptions which varied with the changes in time and factors of economics. Parameters set up in this positive accounting research are limited to the extent of understanding of accountant and auditors fails to gauge the mind set of accountant before reviewing accounts of corporations (Bertomeu, Darrough and Xue, 2017).
Conclusion
In this report various facts and theories have been gauged to provide effectiveness and limitation of positive accounting practice. In positive accounting research there is need for data archives of measurement of important concepts which could be used by auditors to check accounting practice of organizations. The main critique in this positive accounting research is related with use of hypothesis of data and use of qualitative approach in data collection and data analysis of financial transactions. It is evaluated that auditors need to effectively gauge the accountant behavior and their accounting technique while booking financial transactions. This would help auditors to evaluate all the possible errors and mistakes in accounting practice of humans. The main problem which could be identified in this positive accounting research is to establish cause and effect relation of humans. There are several theories and framework models which have been discussed in this article which put emphasis upon how humans takes their decisions and how auditors could pass qualified audit report after determining accountant’s behavior with positive accounting practice. Now in the end, it would be inferred that positive accounting research provides that if auditor works as per the required criteria then there would be less chances of mistakes occurring in auditing and accounting data of organizations. These types of assumptions are based on several theories and models given in this positive accounting research.
References
Ahmed, A.S., Neel, M. and Wang, D., 2013. Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence. Contemporary Accounting Research, 30(4), pp.1344-1372.
Bertomeu, J., Darrough, M. and Xue, W., 2017. Optimal conservatism with earnings manipulation. Contemporary Accounting Research, 34(1), pp.252-284.
Brown, P., Preiato, J. and Tarca, A., 2014. Measuring country differences in enforcement of accounting standards: An audit and enforcement proxy. Journal of Business Finance & Accounting, 41(1-2), pp.1-52.
Deegan, C., 2017. Twenty five years of social and environmental accounting research within Critical Perspectives of Accounting: Hits, misses and ways forward. Critical Perspectives on Accounting, 43, pp.65-87.
Dyckman, T.R. and Zeff, S.A., 2014. Some methodological deficiencies in empirical research articles in accounting. Accounting Horizons, 28(3), pp.695-712.
Engle, T.J. and Hunton, J.E., 2015. Retraction: The Effects of Small Monetary Incentives on Response Quality and Rates in the Positive Confirmation of Account Receivable Balances. AUDITING: A Journal of Practice & Theory, 34(3), pp.201-201.
Everett, J., Neu, D., Rahaman, A.S. and Maharaj, G., 2015. Praxis, Doxa and research methods: Reconsidering critical accounting. Critical Perspectives on Accounting, 32, pp.37-44.
Fang, J., Haw, I.M., Yu, V. and Zhang, X., 2014. Positive externality of analyst coverage upon audit services: Evidence from China. Asia-Pacific Journal of Accounting & Economics, 21(2), pp.186-206.
Guan, K., 2014. Corporate Growth, Audit Quality and Accounting Conservatism: Empirical Evidence from Public Companies in China. Journal of Accounting and Economics, 5(005).
Klemstine, C.F. and Maher, M.W., 2014. Management Accounting Research (RLE Accounting): A Review and Annotated Bibliography. Routledge.
Li, X., 2015. Accounting conservatism and the cost of capital: An international analysis. Journal of Business Finance & Accounting, 42(5-6), pp.555-582.
Slater, R.A., Koren, S., Ramot, Y., Buchs, A. and Rapoport, M.J., 2014. Interpreting the results of the Semmes?Weinstein monofilament test: accounting for false?positive answers in the international consensus on the diabetic foot protocol by a new model. Diabetes/metabolism research and reviews, 30(1), pp.77-80.
Smith, M., 2014. Research methods in accounting. Sage.
Waymire, G.B., 2014. Neuroscience and ultimate causation in accounting research. The Accounting Review, 89(6), pp.2011-2019.
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