Chapter 6 SATTA and Positive Accounting Examine the uniqueness of SATTA Appreciate the timing of SATTA Define positive accounting and the positive approach

Theory IV Statement on Accounting Theory and Theory Acceptance-SATTA AAA-Back to theory –1973 Timing?

Producing SATTA Process? Committee charge? Title significance? Theory benchmarking! Not “son of ASOBAT.”

SATTA Report issued 1977 Conclusions: no single theory Acceptance is key ala Kuhn… who?

SATTA Kuhn “The Structure of Scientific Revolutions” 1962. How do we progress? Kuhn’s pattern: Exhibit 6.2. Key concepts: Implications for accounting…

SATTA Three implications of SATTA

SATTA Evaluation “Son or daughter of ASOBAT” would have been nice. Concerns about theory. Timing.

Positive Accounting New approach late 1970s thru 1980s Positive? Positive view of purpose of theory: explain reasons for current observed practice predict unobserved practice Founders:

Positive Accounting Focus Focus and contribution of PA Explain current practice Determine why groups lobby to influence accounting practice Determine impact of current practice on groups

Discussion Questions Is accounting more of an art or science? Based on your answer, how well does Kuhn’s pattern apply to accounting? What was the overall tone of SATTA: positive or negative? If negative, how could the authors of SATTA been more positive?