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Theory Essay

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Explain what you understand by “theory”. Would you reject a theory of accounting on the basis that a particular research study found results that failed to support the theory? Explain your answer, with particular reference to Watts and Zimmerman’s Positive Accounting Theory, including a discussion of wether any theory can be proved or rejected. The theory is a set of assumptions, propositions, or attempts to provide a plausible or rational explanation of cause-and-effect relationships among a group of observed phenomenon.

It is not helpful for improving the relationship between theorizing and qualitative empirical research in social science disciplines. It can be said that research study is established on the basic of theory. So the answer is “No”. According to Watts and Zimmerman’s Positive Accounting Theory, positive accounting is the branch of academic research in accounting that seeks to explain and predict actual accounting practices.

It believes that it is just an object statement about what theory is and that contains no indication of approval or disapproval, instead of whether correct or wrong or being couched in terms of what should be or ought.

Therefore, if the result of research failed to support its theory, it does not mean the theory and maybe the process is wrong. And I would not reject this theory. In addition, any others like PAT can also be proved such as agency theory and contracting theory. However, if it is a normative theory which against Watts and Zimmerman’s Theory, it should be rejected.

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