. = .
hh | aoe theory Oh
eleeostintins oelltay Ail
clisellestlge
LEARNING
‘OBJECTIVES
Dipindai dengan CamScanner 360
Earlier chapters distinguished between two main classifications of accounting theories:
ormmative and positive, Normative theories are prescriptive in nature and are based on
value judgements about what is an appropriate course of action (e.g the IASB suppons
tlecision usefulness as the primary objective of accounting information). Capital
‘narker research beeame more dominant after the 1970s largely because it became clear
that until researchers knew whether, and how, investors use financial statements, it was
unreasonable to expect them to develop theories prescribing how accountants should
prepare financial statements. However, capital market research has not provided all the
insights accounting researchers, practitioners and regulators need. For example, it was
difficult to predict how the market would react to accounting information when the
reasons managers adopted particular accounting practices were not known. Also, capital
market research did not specifically deal with other important stakeholder issues such
as the impact of accounting regulation on lenders or other non-shareholder users of
accounting reports. As such, whereas capital market research constituted the first wave
of positive accounting theory, the second wave tackled the following issues:
* Why do managers prepare accounting reports if there is no regulation requiring them?
+ Why do managers make systematic accounting decisions and lobby standard setters
to try to influence which accounting practices are permitted under standards?
* What motivates managers’ accounting decisions?
« If firms are required to change their accounting practicés, what actions might manages
take that will affect the reactions of capital market investors and other parties?
This chapter examines the second wave of positive theory. In doing so, it focuses
on contracting theory, political cost theory, signalling, and information perspective
explanations of accounting determinants and consequences. It examines both the
determinants and the consequences of managers’ accounting decisions. In particulay, it
focuses on accounting policy choice and the management of accruals.
BACKGROUND
Early demand for theory
ean eae darn te 1970s provided a major step forward in explainins
plete 5 1 tment in share capital, in particular the effects
ne — ing on share prices and share sale/purchase volumes. However, it W%
oe "ezing the mechanistic and no-effects hypotheses and gave inconssett
t for pr investors used accounting i i atic
in making decisions about whether to buy or sell share, This ered recat ©
Fer cot fcaltes of predicting, market reactions to accounting releases WHE
in he Bee ae a nrene theory to explain why managers prepared accounting repo
avGraee cayenne y fi ‘ey chose to apply particular accounting principles.
undesea (e linderstand the significance of accounting choice, it is neces ©
‘The literate inven neatah economic principles and premises on which itis based.
the efficient aes anne the capital market information content of profits acc"
the world uraicge gt uDatnesis (EMH) asa descriptive reality, or at least accepted
om pose wat ay it described reality" Like classical price theory, EME reli’
Costs, no taxes and mo eons such as freely available information, zero transicle’
these assumptions: pees moose contol (all panicipants are price take) unit
information. Hage es ate immediately and costlessly adjusted to reflect accounts
‘er although these conditions might ‘ be destin
here are other circums sree not
of the stock market?
ket?
approximate realty Thais, there are aberrations, ee these conditions ‘
PART 3. Accounting and research
Dipindai dengan CamScanner erin ee issunpions of early posiive accounting research meant that
iminediney archers could not always explain why share prices did not respond
prices continued sae 1g information in the manner predicted. Similarly, when share
Eee 'ed to reflect accounting information days after its release, the assumption
a \ctions costs and free information clearly did not hold. One question asked
z her accounting reports were primarily aimed at supporting decision making in
Anda mungkin juga menyukai
- Tabungan Onkos HajiDokumen1 halamanTabungan Onkos HajiNining Herawati PutriBelum ada peringkat
- SWD - Bab 8Dokumen46 halamanSWD - Bab 8Nining Herawati PutriBelum ada peringkat
- Swd-Bab 9Dokumen57 halamanSwd-Bab 9Nining Herawati PutriBelum ada peringkat
- Temu IV Penilaian Surat BerhargaDokumen38 halamanTemu IV Penilaian Surat BerhargaNining Herawati PutriBelum ada peringkat
- Diagram LingkaranDokumen1 halamanDiagram LingkaranNining Herawati PutriBelum ada peringkat
