1. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY SUBMITTED BY HANAN AL-MARHABI Accounting theory (ACC511) Dr.Ahmed Abdelmalik KING SAUD UNIVERSITY

2. Most accounting theories are “ unscientific”(mean: do not confirmed or verified by empirical tests ), but they are “ normative “ (resulted from numerous American and international parties ). (Watts and Zemmirman) THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Discussion will concentrated around three axes:  the criteria of empirical tests to the scientific accounting theory.  Arguments that support empirical tests of theory to be scientific.  Arguments that reject empirical tests as a means to verify theory.

3. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY The empirical tests of theory are criteria for classifying the disciplines into scientific disciplines and non-scientific disciplines. WINCH, KIRZNER AND HAYEK The theories of social sciences must be subject to any empirical tests. The theories of social sciences must be subject to any empirical tests. Some difficulties would arise  The difficulties in establishing well-controlled experiment.  Would result less degree of precision in the social sciences prediction.  The danger of falsifying.

4. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY The empirical tests of theory are criteria for classifying the disciplines into scientific disciplines and non-scientific disciplines. SAMUELSON AND O’SULLIVAN But establishing well-controlled experiments should not be sufficient to establish social science theories. But establishing well-controlled experiments should not be sufficient to establish social science theories.

5. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). MCDONALD Theories must be build on strict positive lines : (1) Encoding of phenomena to symbolic representation. (2) Manipulation or combination according to rules. (3) Translation back to real word.

6. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). MATTESSICH The accounting should ultimately be made up of empirical propositions. The accounting should ultimately be made up of empirical propositions. ARNET The approach would direct attention to the interest of the accounting entity. The approach would direct attention to the interest of the accounting entity. JENSEN The research in accounting hasn’t been (with one or two exceptions ) scientific because it focused on normative view. The research in accounting hasn’t been (with one or two exceptions ) scientific because it focused on normative view.

7. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). First view : supported the empirical tests of theory to be considered as a scientific theory and attacks the normative view that concentrated on ethical positions and normative statements(standards). DOPUCH Refuted the normative theory because it hasn’t led to epistemological progress in accounting it is unlikely to produce any further benefits. Refuted the normative theory because it hasn’t led to epistemological progress in accounting it is unlikely to produce any further benefits. NELSON Called the normative research “semiresearch” because it is concerned with statement of hypotheses on how accounting should be done without the testing of those hypotheses. Called the normative research “semiresearch” because it is concerned with statement of hypotheses on how accounting should be done without the testing of those hypotheses.

8. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. GAFFIKIN States three criticism : First : observations drive their credibility from background assumptions,, how ?? First : observations drive their credibility from background assumptions,, how ?? It is Assumed there is one normal observer and when Many researchers observing the same event this is an inductive statement(hypotheses ) that would be justifying. But inductive can’t be used to justify this statement because it presupposes the reliability when assumed that there is one normal observer. It is Assumed there is one normal observer and when Many researchers observing the same event this is an inductive statement(hypotheses ) that would be justifying. But inductive can’t be used to justify this statement because it presupposes the reliability when assumed that there is one normal observer.

9. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. GAFFIKIN States three criticism : Secondly : observations drive their meaning from background assumptions. Secondly : observations drive their meaning from background assumptions. Terms are theory-laden : their meanings change. Theoretical claims and concepts give meaning to observation. Terms are theory-laden : their meanings change. Theoretical claims and concepts give meaning to observation.

10. THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY Accounting literature contains two views : Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. Second view : reject the empirical tests as a means to verify the theories. It has been criticized on the role observation plays in obtaining knowledge. GAFFIKIN States three criticism : Thirdly : observations are theory-infected. Thirdly : observations are theory-infected. Empiricism rest on the ground assumption that there is an absolutely stable and invariant correspondence between theoretical assumptions and the stimull which produce from them. Empiricism rest on the ground assumption that there is an absolutely stable and invariant correspondence between theoretical assumptions and the stimull which produce from them.

11. Finally, the positive theory is generally differentiated from the normative theory and seems to generate considerable optimism among advocates because its determination of a preferred accounting methods will be after : Finally, the positive theory is generally differentiated from the normative theory and seems to generate considerable optimism among advocates because its determination of a preferred accounting methods will be after : THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY ( 1) The parties impacted by accounting methods have been identified, (2) The nature of the effects has been researched, (3) And the uses of all interested groups have been considered.

12. HANAN Al-MARHABI thanks your attention thanks your attention THE ARGUMENTS CONCERNING THE POSITIVE ACCOUTING THEORY