Positive accounting theory: theoretical and critical perspectives
by Donatien Avelé
International Journal of Critical Accounting (IJCA), Vol. 6, No. 4, 2014

Abstract: This article presents the evolution of positive accounting theory since its founding works by Littleton (1953). From the reasoned practice to Chambers' (1966) normative theory and the PAT initiated by Watts and Zimmerman (1978, 1979), the article discusses the tug of war through multiple reviews of the main approaches that are reported in accounting research in the past few decades. The study then proceeds to a comparative analysis of the two theories (normative and positive) that have been the subject of numerous criticisms. Furthermore, one of the main goals of this study is to examine the possibility of reconciling the PAT and the agency theory in the allocation of indirect manufacturing costs. Overall, this paper shows that the PAT is the one that is the most controversial in the history of accounting theory.

Online publication date: Sat, 14-Feb-2015

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