Contrast normative theories with positive accounting

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Assignment

Part A (1000 words)

Watts and Zimmerman's ‘The Demand and Supply of Accounting Theories: The Market for Excuses' suggested the ‘normative' project of accounting academics and other social critics of corporate accounting practice to be invalid; that there are no objective grounds in accounting theory for judging accounting practice as ‘good' or ‘bad'; all such judgements are mere excuses or apologies for advancing the interests of particular social constituencies, couched in a language of academic impartiality and objectivity.

Tony Tinker [Policing Accounting Knowledge: the market for excuses affair] has suggested that the positive accounting theory proposed by Watts and Zimmerman is being replaced by a new paradigm: one that emphasises usefulness, vocational training and practical application.

Contrast ‘normative' theories with ‘positive accounting' theory. Have we moved to a new paradigm and if so what is it.

Part B (1000)

Consider the concept of historic cost and discuss the following questions

- The historical cost model and its application
- The reasons for the dominance of the historical cost model, and the arguments against the model
- Historical cost valuation issues, and the equity perspective adopted
- Criticisms of historical cost accounting.

Reference no: EM131500019

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