Theoretical
ILALA BOMA CPA REVIEW CLASS P.20
ABDULKARIM T.KISUGURU
THEORETICAL FRAMEWORK OF ACCOUNTING THEORIES INTRODUCTION In this topic we consider various theories of financial accounting. Perhaps, therefore, we should start by considering what we mean by a ‘theory’. Theory., which has a Greek root, .Theoria. meaning to .behold or view.. A popular definition given by Kerlinger defines theory as .a set of interrelated constructs (concepts), definitions and propositions that present a systematic view of phenomena by specifying relations among variables, with the purpose of explaining and predicting the phenomena… Arnold Rose.s view is similar to the above statement. He defined theory as an integrated body of definitions, assumptions and general propositions covering a given subject matter from which a comprehensive and consistent set of specific and testable (principles) can be deduced logically… There are other views which state theory as .a set of interrelated concepts at a fairly high level of generality..
There are various perspectives of what constitutes a theory. The Oxford English Dictionary provides various definitions, including: A scheme or system of ideas or statements held as an explanation or account of a group of facts or phenomena. The Macquarie Dictionary provides the following definition of a theory: A coherent group of general propositions used as principles of explanation for a class of phenomena. The accounting researcher Hendriksen (1970, p. 1) defines a theory as: A coherent set of hypothetical, conceptual and pragmatic principles forming the general framework of reference for a field of inquiry. The definition provided by Hendriksen is very similar to the US Financial Accounting Standards Board’s definition of their Conceptual Framework Project (which in itself is deemed to be a normative theory of accounting), which is defined as ‘a coherent system of interrelated objectives and fundamentals that can lead to consistent standards’ (FASB,
ABDULKARIM T.KISUGURU
THEORETICAL FRAMEWORK OF ACCOUNTING THEORIES INTRODUCTION In this topic we consider various theories of financial accounting. Perhaps, therefore, we should start by considering what we mean by a ‘theory’. Theory., which has a Greek root, .Theoria. meaning to .behold or view.. A popular definition given by Kerlinger defines theory as .a set of interrelated constructs (concepts), definitions and propositions that present a systematic view of phenomena by specifying relations among variables, with the purpose of explaining and predicting the phenomena… Arnold Rose.s view is similar to the above statement. He defined theory as an integrated body of definitions, assumptions and general propositions covering a given subject matter from which a comprehensive and consistent set of specific and testable (principles) can be deduced logically… There are other views which state theory as .a set of interrelated concepts at a fairly high level of generality..
There are various perspectives of what constitutes a theory. The Oxford English Dictionary provides various definitions, including: A scheme or system of ideas or statements held as an explanation or account of a group of facts or phenomena. The Macquarie Dictionary provides the following definition of a theory: A coherent group of general propositions used as principles of explanation for a class of phenomena. The accounting researcher Hendriksen (1970, p. 1) defines a theory as: A coherent set of hypothetical, conceptual and pragmatic principles forming the general framework of reference for a field of inquiry. The definition provided by Hendriksen is very similar to the US Financial Accounting Standards Board’s definition of their Conceptual Framework Project (which in itself is deemed to be a normative theory of accounting), which is defined as ‘a coherent system of interrelated objectives and fundamentals that can lead to consistent standards’ (FASB,