Emphasis on Positive Accounting Research

Question: Discuss about the Emphasis on Positive Accounting Research. Answer: Introduction The topic of the article is Positive Accounting Research. The article has laid down the emphasis on Positive accounting research rather than the Positive Accounting theory as applied by the Watts and Zimmerman in a particular accounting theory. Positive accounting theory has been based on the assumption of having the human rational behavior which includes managers, stakeholders, employees, etc. Positive accounting only helps in providing the explanation and predictions about the event or unobserved phenomena. It does not provide any guiding factor to the humans to act in different manner in different situations (Watts and Zimmerman, 1990). Unlike Watts and Zimmerman, the author has considered the positive accounting research as part of the wider scientific project. It will make the readers understand the cause and effect relationship that will happen in the world that has been defined in the study. The accounting is such that in which the behavior of humans may be studied in details with reference to their working in the complex organizations. The aim of the author is to analyze the cause and effect relationship. The main argument with which the article has dealt with is whether the positive accounting research has made meaningful contribution towards the wider scientific project. The paper has been divided into eight different sections. The paper has started with the introduction and giving details of the scientific project. Thereafter examples have been cited for positive research in accounting succeeded by information about the ontology and epistemology of scientific project. After understanding the aims and other factors, the testing is done by using hypothesis and other models. After having the deficiencies in the research program which has been analyzed through the testing, requisite factors are mentioned for having successful research program. Then the gap has been analyzed as to why the positive accounting research is being applied as it is as against a s envisaged in the beginning. The paper then comes to an end with the concluding paragraph stating the suggestions as to which should be done to have an effective research program so as to overcome the deficiencies. With this considerations and aim the paper has been formed and made available to useful readers. The author has stated that the positive accounting research is different from the positive accounting theory as applied by Watts and Zimmerman. It is because the latter has applied the theory in the field of accounting in understanding the human behavior with the assumption of having self centered behavior whereas the author has considered the positive accounting research as part of the huge scientific project (Watts and Zimmerman, 1990). It considers it as science. The aim of the study is to identify the cause and effect relationships along with the contribution towards the scientific project. At first the author has argued the old philosophies of sophists and vague imaginations thereafter he states the importance of human behavior in the study and elaborates the same on step to step basis. These elaborations have been made with the help of real life examples along with the major valuation models including statistical methods. He has argued at various level of study either on the ol d theories of philosophers or on the different models and has majorly argued that only rational human behavior shall not be considered but also the other factors which are non rational shall be considered including financial parameters. He has laid down emphasis on financial parameters and has suggested having different models for analyzing. Thus, in order to summarize the article, the main focus is on the positive accounting research and its being considered as part of scientific project and analyzing how much contribution is made by the research program to the scientific project. Question of Research As per the paper, the question of research program is distinctive of what the author has suggested in the beginning. In the beginning he has mentioned that positive accounting research is considered as part of the wider scientific project with the aim of analyzing the cause and effect relationships in the world as defined in the study. But later it was established that the major research question is that how much contribution the research program made for the wider scientific project. Through the hypothesis, he checked for null hypothesis at given value and with 5%-10% confidence interval. The paper has gained much weight age with the given results. The results have come up the research question. The research question has flowed from the different theories to the different models of valuation. He has emphasized on financial parameters and for the purpose of illustrating the studies auditing literature has been selected as auditor and auditee relationship gives different ways of understanding the human rational behavior and other non rational factors. Throughout the literature of the paper, the research question and all other matters in its context has been carried from one stage to other stage. His research is further encouraged when the he has got an answer of his earlier claims for science as science will never be able to answer X (Sterling R,1990) . This fact has been negated in short period of time which has further increased the confidence of author. He has further along with defining the research question has laid down the importance of positive research program, not only in economics and accounting but also in other field s of study. Theoretical Framework In order to conduct any research or perform any kind of work or function, framework should be present. Framework may be theoretical, practical or customizable. One shall perform within the framework otherwise the work done or will be done in a haphazard manner. Thus, defining the framework before starting or taking up any work is of utmost important in every spheres of work. In the article, theoretical framework has been formed. Theoretical means the involvement of theories in the construction of framework within which the activity needs to be performed or task needs to be undertaken (Christenon C, 1983). The theoretical framework has been prepared by using various theories. In the beginning the author has used the theory of Kuhn who has suggested matrix which helps in solving the puzzles in very fast manner within the group and further rewarding the persons within that group (Kuhn, 1970). Thereafter theory of Lee has been considered due to which the Kuhn theory has gained advantage. After this, author have developed his own imaginative theory consisting of four facts stating: World exists which is out of our imagination Events occurred have causes which are considered as part of the world People in the world obtain information about events Have an understanding of the World under study. Thereafter, theory of sophists have been mentioned who states that nothing exists, if exists than no one know about it and if someone knows then none of them can communicate the fact. After this, agency hypothesis is mentioned where principal and agent relationship has been detailed. Most importantly Poppers model has been mentioned and discussed in detail stating the four step procedure: Observe and develop ideas Develop predictions Test the predictions so developed Replication of second and third steps. Through poppers model various facts and figures have been identified and analyzed. Thereafter, statistical methods have been used. In this way, the theoretical framework has been strong on which the paper has been build and has come out with relevant figures and facts. The Significance and Limitations The paper has gained significance over the years. In the relevant context the paper has gained not only the importance in the field of accounting, economics, and science but also in other fields. The importance has been gained due to the sequence of events that has been listed in the paper starting from the very fact of importance of positive accounting research and ending with the conclusions stating the various suggestions for having the good research program. There are many reasons for having significance. First is the use of different theoretical concepts and development of sound theoretical framework. Second is putting the emphasis not only on the theories but also on the financial parameters by using the logarithm functions and defining the cause and effect relationship with the use of different variable like audit fee, auditor, auditee and quantum of work, etc. Due to above the article has been very useful for understanding the human behavior in different fields. It contains v arious examples and some are of real life like of Pioneer Spacecraft, Kashmir, etc. At some stages author has acknowledged the limitations. For instance at one stage the author has mentioned that the positive accounting research though very useful has not gained much importance because of the fact that the people does not want to understand the world within the cause and effect relationship can be analyzed. Another acknowledgement he has made at the time of describing the Kuhn model where the puzzles are solved fast in a very short period of time and awards are given to the people within that group. He acknowledged that the awards are given irrespective of the fact that whether it contributes to the wider scientific research project or not. With this deficiencies even then the author has mentioned that its Kuhn model which fits into the positive research program being the part of the wider scientific research project (Millen M, 2001). Yes, the author has draw many theoretical conclu sions out of the theoretical framework within which the positive research program has been evaluated and checked how much contribution it has made to the wider scientific project. The limitations that have been acknowledged by the author and other related limitations have affected the significance of article. But the affect is not much that can negate the value of an article in the eyes of the people and person conducting the research. Adding further, the limitation of Kuhn model and acknowledged limitation has to some extent invalidated the findings and observations of the article made by the author. Thus, in totality the article is of utmost importance and has significance as equal to other relevant articles Conclusion As per the beginning of the article, Positive Accounting theory and positive accounting research are both distinct. Positive accounting theory as used by Watts and Zimmerman has explained the rational human behavior in account settings, whereas positive accounting research is research program which is considered as part of the wider scientific project. The author has not only cited the theories of different authors but have also created or invented theories on the basis of his own imagination citing that different kind of world exists and predictions will be there and so on. Apart from that the author has cited the examples from the auditing literature which has further help the author to explain the human behavior in much more clear context. Its because, the auditor and auditee relationship is something different where neither the employer and employee relationship will as countered in different kinds of organization nor there will be the relationship of agent and principal where th e agent is bound to act on the behalf of the principal as per his directions who in return gets the commission. The auditor auditee relationship has laid down some important facts and figures which otherwise cannot be obtained with any kind of human behavior. Also it helps in explaining the cause and effect relationship in the full. The article has adopted various mathematical and statistical measures. It has used the logarithm table and has defined various dependent and independent variables. Most importantly the author has acknowledged the limitations in the study and long with that he has very categorically defined the factors which are required for having successful positive research program. In the concluding paragraph in the article the author has laid down four major suggestion which acts as an eye opener for the readers of the articles. First is to have better theoretical models, second is to have better measurement, third is to have focus on estimation of parameters and fou rth is that there must be extensive replication of process. Thus in the way to conclude, the article has come up with new facts, figures and provided the best ways to have good research program. References Watts R. and Zimmerman L. (1990), Positive Accounting Theory : A Ten YearPerspective,availableon https://faculty.etsu.edu/pointer/watts%26zimmerman2.pdf accessed on 14/12/2016. Milne M, (2001), Positive Accounting Theory, Political Costs and Social Disclosure Analysis : A Critical Look, available on https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.199.7620rep=rep1type=pdf accessed on 13/12/2016. Outline of Positive Accounting Theory available on www.umanitoba.ca/faculties/management/acctfin/courses/.../group84.doc accessed on 13/12/2016. Sterling R, (1990), Positive Accounting : An Assessment , ABACUS, pages 98-130 Christenson C, (1983), The methodology of positive accounting. The Accounting Review 58 (1), 1-22. Kuhn T. S., (1970), The structure of scientific revolutions, 2nd Edition, University of Chicago Press, Chicago.