Accounting theory and its application is very fundamental to students and professional in accountancy. It equips people in the accountancy profession with financial accounting theory and associated research. Relevance of this theory is that it provides accountants with knowledge to critically investigate and analyze contemporary accounting issues. Research enables students to have broad thinking of current accounting issues such as environmental aspects and social responsibility aspects. The study of popular culture lead to research concerning all the emerging issues in the Accounting profession.
It brought about the question as to whether students or other stakeholders in the profession should engage the attention of people in the field of research. Deegan,C. (2009) in his book stated that there is little attention given to issues that impact to aspects of the accounting profession. Relevant issues for study in accounting and auditing concern accounting principles and standards, auditing ,professional behavior and general professional matters, such as scope of services, maintenance of quality control and strategies.
Study of popular culture has provided researchers with the following arguments to justify implication of the Accounting profession. a. Accounting is a dynamic line of specialization where participants/accountants should be in a position to respond to changes in the business society and come up with revised accounting principles and standards. This will enhance understanding of the financial statements to stakeholders and society in general. b. Public accounting like other profession in United States should provide high level of motivation for evaluating what the actual events.
It further anticipates any additional changes in future to improve and provide information on value creation by entity from different dimensions from profit. From research this has lead development international public sector accounting standards The study of popular culture will enable researchers to determine emerging issues such as, unexpected business failure, legal liability of an independent auditor and effectiveness and appropriateness of audit evidence gathered from the society.
Besides, it will factor the complex nature of business transactions which normally affect the position of an independent auditor. Studying the popular culture also provides researchers with knowledge to evaluate the value added to the financial statements by various entities. This helps to determine effects of social and environmental accounting; highlights the role of culture in explaining international differences and disclosures in accounting. Popular culture enables society in understanding the reaction of capital markets to financial reporting.
By understanding popular culture, it lead to research on fundamental issues such as corporate governance, social and environmental reporting which enables companies in their Annual Operating Plan set aside some amount to used in promoting things like sporting activities. Culture has exceptionally attracted voluntary reporting by allowing research on institutional theory, legitimacy theory, stakeholder’s theory and positive accounting theory. Nevertheless the study popular culture has significantly analyzed normative theories of accounting as well as development of accounting for price level changes.
It involves critical appraisal of Historical cost accounting approach, general purchasing power approach and current cost accounting approach. Culture study highlights efforts towards international harmonization of accounting in terms of disclosure and reporting. Application of accounting research has influenced extension of financial reports such employment statements which analyzes the benefits which employees get from employment which in turn its cost to the employer. Earnings per share analyze both basic earnings per share and diluted earnings per share in determining worthiness of company.
Research of popular culture is very significance in understanding economic actions to a particular interest of groups within society and to the entire society; it involves extending the accountability of organization beyond the Traditional role providing financial account to the owners of the capital, in particular, the shareholders. Such an extension is predicated upon the assumption that companies do have wider responsibilities than simply to make money for their respective shareholders.