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Critical Review on The Demand for and Supply of Accounting Theories: The Market for Excuses

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1990 words 10/02/2012 Critical Review on ?The Demand for and Supply of Accounting Theories: The Market for Excuses? [Issues in Accounting Research] Jing Zhou 1103268Z Shining Li 1100658L Moxi Yang 1103927Y Liling Pan 1100618P ________________ Content 1. Introduction 2. Summaryof the Original Paper 3 3. Evaluation 4 3.1 The Criteria Used In Evaluation 4 3.2 The Aspects Which Fail the Criteria 5 3.2.1 The Validity of Framework 5 3.2.2 The Validity of Assumptions 5 3.2.3 The Appropriateness of Evidence 6 3.2.4 The Objectivity of Author?s View 7 3.3 The Aspects Which Reach the Criteria 7 3.3.1 The Degree of Innovation 8 3.3.2 The Degree of Original Contribution 8 4. Conclusion 9 Reference: 10 Critical Review on ?The Demand for and Supply of Accounting Theories: The Market for Excuses? 1. Introduction Ross L. Watts and Jerold L. Zimmerman are two of the most influential and controversial contributors to accounting literature of the past decades based on their substantial individual and cooperative contributions. As pioneers, they devoted themselves to creating a positive accounting theory, and further described accounting theories as supplying excuses in their paper of 1979, which provided a chance to reflect on the significant growth in the accounting research and broadened the view ??towards a more formal and deductive concern with hypothesis testing and quantitative methods?? (Whitley, 1988). The aim of this paper is to critically review the paper by Watts and Zimmerman (1979) ...read more.


As indicated in the paper of Watts and Zimmerman (1979), individuals? self-interest is the driving force of their lobbying actions, and their interests can only be revealed by their lobbying of accounting standards. However, according to Hindess(1982,1986), in such a way, the possibility of any mistaken calculations of interests and unintended results is ignored. 3.2.3 The Appropriateness of Evidence In order to examine and support their study, Watts and Zimmerman selected three types of legislation which they believed impose a remarkable influence on the demand for and supply of accounting theories: the railroads legislation, income tax acts and securities acts. There are at least two problems with their evidence. Firstly, in the three examples, the authors focused their attention on either the U.S or the U.K rather than on a more general basis. Therefore, a suspect reasonably arises that their theory could be held only in a limited domain, not applicable universally. Secondly, in the first piece of evidence-the railroads legislation, Watts and Zimmerman stated that the accounting research articles on the nature of the depreciation started to appear from 1841 in the U.K. and from 1850 in the U.S. at latest. Meanwhile, when the authors elaborated the researchers? relation to the vested interests? demand of accounting theories, they implied that researchers were motivated by the rewarding system of universities to supply theories to meet vested interests? needs. ...read more.


(1982) ?Power, Interests and the Outcome of Struggles?, Sociology, 16/4:498-511 Hindess, B. (1986) ?Interests in Political Analysis? in J. Law (ed.), Power, Action and Belief, London: Routledge and Kegan Paul Lowe, E.A., A.G. Puxty and Laughlin R.C. (1983) ?Simple Theories for Complex Processes: Accounting Policy and the Market for Myopia?, Journal of Accounting and Public Policy, 2/1:19-42 Meyer, J. W. (1986) ?Myths of Socialization and of Personality?, in T. Heller (ed.), Reconstructing Individualism, Princeton: Princeton University Press Robson, K. (1993) ?Accounting Policy Making and "Interests": Accounting for Research and Development?, Critical Perspectives on Accounting, 4/ 1:1?27 Rokeach, M. (1973) ?The Nature of Human Values?. New York: Free Press Sterling, R. (1990) ?Positive Accounting: An Assessment?, Abacus, 26:97-135 Sinha, S.K. (2008) ?ICFAI?, Journal of Accounting Research, 7/ 4:7-16 Tinker, T.A.M., B.D. Merino, and Neimark M.D. (1982) ?The Normative Origins of Positive Theories: Ideology and Accounting Thought?, Accounting, Organizations and Society, 26/2: 167-200 Tinker, T., T. Puxty. and A.G. Puxty. (1995) ?Politicing Accounting Knowledge: the Market for Excuses Affair?. SAGE Publications Watts, R.L. and Zimmerman, J.L. (1979) ?The Demand for and Supply of Accounting Theories: The Market for Excuses?, The Accounting Review, 54/2: 273-305 Watts, R.L. and Zimmerman, J.L. (1990) ?Positive Accounting Theory: A Ten Year Perspective?, The Accounting and Business Research, 65/:131-156 Whittington, G. (1987) ?Positive Accounting: A Review Article?, Accounting and Business Research, 17/68: 327-336 Whitley, R.D. (1988) ?The Possibility and Utility of Positive Accounting Theory?, Accounting, Organisations and Society, 13/6:631-645 Zimmerman, J. (1980) ?Positive Research in Accounting?, in Perspectives in Research, ed. R. Nairand T. Williams, Madison: University of Wisconson ...read more.

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