Mautz
NATURE OF POSTULATES (from
Mautz & Sharif, Philosophy of
Auditing.)
Five general characteristics of postulates
which are helpful to our understanding of
them and their function. Postulates are:
(1) Essential to development of any
intellectual discipline.
(2) Assumptions that do not lend
themselves to direct verification.
(3) A basis for inference.
(4) A foundation for erection of any
theoretical structure.
(5) Susceptible to challenge in the light
of later advancement of knowledge.
--We cannot start reasoning or thinking without a starting point.
--We can prove nothing to the man who will accept nothing as a basis for
discussion.
--Postulates necessarily occupy the cornerstone position in any edifice of
theory.
The first difficulty of directly verifying postulates is that they are at
bedrock. Since they are the fundamentals in our structure of theory, there is
nothing beneath them on which they rest and by which they can be
demonstrated.
Postulates must be consistent with one another; we cannot have postulates
that are in conflict, for we can build no sound structure upon contradictions.
Theories founded upon inappropriate postulates will son be discovered to be
inconsistent, both with one another and with the facts of the real world.
Once we accept the postulates we can draw propositions from them. They
provide a basis for thinking about problems and for arriving at solutions. We
now have a starting point.
ACCOUNTING POSTULATES
A COMPARATIVE ANALYSIS
Paton
Paton &
Littleton
1. Business entity
Environmental
Postulates
1. Business entity
2. Continuity
3. Balance sheet
equation
2. Continuity
3. Measured
consideration
4. The statement
of assets and
4. Costs attach
liabilities is a
5. Effort and
complete
representation of accomplishment
financial position
6. Verifiable
5. The value of the objective evidence
measuring unit is
the same
6. Cost= initial
value
7. Costs attach to
the product
8. Costs accruerevenues do not
9. Sequence of
data exist
1. Quantification
2. Exchange
3. Entities
4. Time period
5. Unit of measure
Supplementary
Postulates
1. Financial
Statements
2. Market prices
3. Entities
4. Unit of measure
5. Tentativeness
Imperative
Postulates
1. Continuity
2. Objectivity
Fairness
3. Consistency
4. Stable units
5. Disclosure
return to topical outline
return to contemporary accounting issues