Accounting

Theory
Construction
Table of contents

- Pragmatic theories. - Syntactic& Semantic theories.

- Normative theories. - Positive theories.

- Different perspectives. - Scientific approach applied to accounting.
- Issues for auditing theory construction. - Questions.
 Pragmatic
• Descriptive pragmatic approach
theories
• Psychological pragmatic approach
 Syntactic and semantic theories

Semantic theory: ability to relate to the real world.

Syntactic theory: must be logical.
2013Adrian Paschke, Pragmatic Web 4.0
Normative theories
1950s and 1960 this period was called the ‘ golden age’ .

Why they called it the golden age?

 Normative theory
Concentrate on deriving :
• True income :
- Single measure for assets
- A unique and correct profit figure

• Decision usefulness
- Example
The decision process in normative theory:
Positive Theories

• What is the positive theory?

• What is the difference between normative
and positive theories?
Different perspectives

Naturalistic approach Criticism of the Scientific approach

:scientific method

implies that there are large-scale statistical has an inherent

no preconceived research tends to lump assumption that the
assumptions or everything together world to be researched
theories is an objective reality
Six basic ontological assumptions sets
REALITY AS A CONCRETE
STRUCTURE
Reality as a concrete process
Reality as a contextual field of information
Reality as symbolic discourse
Reality as social construction
Reality as projection of human imagination
 category 1 assumes that the world is
1 concrete and stable, category 6 views
the world as unstable and human-
specific. In category 6, humans are not
expected to behave according to a set of
2 behavioural rules that apply to everyone
equally. Complex interrelationships and
individualistic decision models are
3
assumed.
 For categories 1- 3, it is more appropriate
4 to use the scientific approach. By
appropriate observation and
measurement.
5
 For categories 4-6, is more naturalistic or
exploratory research is more appropriate.
6 These three categories are generally
labelled as 'symbolic
comparison of the scientific and naturalistic approaches

Naturalistic research Scientific research

Accounting is Accounting is Ontological assumptions

constructed reality objective reality.

Irreducible laws Laws caaable of Epistemological approaches

generalisation

Unstructured Structured Methodology

Case studies Syntactic model Methods

formulation
Scientific approach applied to accounting
Misunderstanding of purpose :

First:
• Make scientists out of accounting practitioners
• It’s not correct to separate

Second:
• The desire for absolute truth
• The scientific method attempts to persuasive evidence to explain ,
it does not provide ‘ truth’
Issues For Auditing Theory Construction

• What is auditing?
• Mautz and Sharaf comprehensive
theory.
Questions

• Did the positive theory researchers and normative theory researchers

accept each other’s viewpoints?
• Does the positive theory exist till now?
• What is auditing?
• In which period they called the normative theory the golden age? And
why?
• Psychological pragmatic approach requires to observe users response to
accountants output?
THANKS!