Chapter 1 Introduction to financial accounting theory Slides written by Craig Deegan ee ua* In this chapter you will be provided with evidence that shows that: there are many theories of financial accounting - knowledge of different accounting theories increases our ability to understand and evaluate various alternative financial accounting practices ~ the different theories of financial accounting are often developed to perform different functions, such as to describe accounting practice or prescribe particular accounting practices erica moa ctare a— theories, including theories of accounting, are developed as a result of applying various value judgements and that acceptance of one theory, in preference to others, will in part be tied to one’s own value judgements — we should critically evaluate theories before accepting them = there is good reason for students of accounting to study theories as part of their broader accounting education $ePL Te eae, Pra accom Ty 36 13