Accounting i a subjective subject Essay Example | Topics and Well Written Essays - 1500 words

Accounting i a subjective subject - Essay ExampleA theory ucce a a theory appear on it value to uer in explaining and predicting event.A of now there i not one theory in write up that goat be called The Accounting Theory, a no one theory can currently explain and/or uccefully predict all accounting phenomena. However, the composing doe take into account the potential value of the poitive theory of accounting and it limitation. Finally, the paper attempt to ae the need for an accounting theory and to determine whether we need one.If it i to be comprehenible and reliable, accounting mut be ued in accordance with pecific rule and regulation. It would be chao of Babylonian proportion if each peron ued hi own grammar and vocabulary - nobody would undertand anybody ele. Likewie, it i eential that accounting i ued according to generally accepted rule. (Thoma , 2003, 10)The hitory of accounting i a old a civilization, key to master(prenominal) phae of hitory, among the mot important pr ofeion in economic and buine, and facinating. Accountant participated in the development of citie, trade, and the concept of wealth and number. Accountant invented writing, participated in the development of money and banking, invented double entry bookkeeping that fueled the Italian Renaiance, aved many Indutrial Revolution inventor and entrepreneur from bankruptcy, helped develop the confidence in capital market neceary for wetern capitalim, and be central to the information revolution... Big buine required capital market that depended on accurate and ueful information. Thi wa upplied by the expanding accounting profeion. Today, a global real-time integrated information ytem i a near reality, uggeting new accounting paradigm. Undertanding hitory i needed to develop the linkage to predict thi future.The firt prerequiite i that accounting hould agree or conform with the baic truth according to which our economic ytem function the current economic and buine practice and the applicab le law a incarnate in legilative regulation or common law. Conequently, it i important that uniformity i maintained in accounting practice in other word, a pecific et of circumtance, wherever it may be encountered mut be dealt with by everyone in exactly the ame way within the accounting proce.Accounting theory create a mannequin that enure that accounting practice complie with the requirement of conformity and uniformity. Thi theory i embodied in a et of principle, policie, method, procedure and convention. The continuouly increaing cope and complexity of our economic ytem require a correponding proce of readjustment in accounting in order that the relevant information regarding economic activitie may be recorded. It i eential that everyone involved in accounting hould undertand thi proce of adaptation moreover, a prerequiite for uch undertanding i a grap of not only the theory of accounting, but alo the tructure of that theory. (Thoma , 2003, 10)Accounting theory i baed on a et of baic economic truth that are of a dual nature. Firt, accounting theory i baed on propoition generally accepted in the economic order of a particular ociety. For example, conider the