References
- 1977 . “ Committee on Concepts and Standards for External Financial Reports ” . In Statement on Accounting Theory and Theory Acceptance , ix American Accounting Association . hereinafter referred to as the ‘committee’ and ‘SOATATA’. Page numbers given without further reference in the main text are from SOATATA.
- Kuhn , T. S. 1970 . The Structure of Scientific Revolutions , 2nd , University of Chicago Press .
- I am indebted to Professor Maurice Moonitz for this useful term to describe SOATATA's attempt to develop a ‘theory of accounting theory development’.
- Op.cit.
- R. R. Sterling, A Statement of Basic Accounting Theory: A Review Article . Journal of Accounting Research , Spring : 100 footnote 5. Sterling was, to my knowledge, the earliest writer to refer to Kuhn's book—although my colleague Professor Edward Stamp has pointed out to me that R. J. Chambers mentions Kuhn in a footnote on page 374 in the ‘Epilogue’ of his book, Accounting, Evaluation and Economic Behavior (Prentice-Hall, 1966), albeit that the reference is to an earlier work of Kuhn's, viz. The Copernican Revolution (Harvard University Press, 1957).
- It should-be pointed out that what the committee means by paradigms is somewhat at variance to Professor Wells' meaning; see M. C. Wells, ‘A Revolution in Accounting Thought?’ . Accounting Review , July The following criticisms are intended to apply only to SOATATA's usage of the term; I find Wells' usage much more satisfactory, with its emphasis on the thought processes of practitioners and teachers rather than academic researchers.
- Kuhn, op.cit., pp. 160–161.
- An interesting parallel to this kind of debate is that over ‘Is internal auditing a profession?’. If the question has to be asked, then it isn't. See D. C. Burns and W. J. Haga, ‘Much Ado About Professionalism: A Second Look at Accounting’, Accounting Review, July 1977.
- Kuhn, op.cit., p. 209.
- Popper , K. R. 1968 . The Logic of Scientific Discovery , 2nd , Hutchinson & Co. .
- “Since this assumption [of Pigou's that rich and poor men have similar tastes] involved inter-personal comparisons of utility, it was argued by Robbins that it was a non- scientific, ethical assumption because inter-personal comparisons of utility could not be made scientifically…. [A]t that time Robbins' arguments gave rise to a great deal of dismay…Economists did not seem to want to admit boldly that no application of economic theory to any practical problem was possible without presupposing some ethical premises or other'. S. K. Nath, A Reappraisal of Welfare Economics (Routledge & Regan Paul, 1969), pp. 94–95.
- In microeconomics, the behavioural and neoclassical theories of the firm can be viewed as complementary, rather than competing, paradigms in that they seem to serve quite different functions in economics, in the sense that an economist is not forced to choose between them; he can make use of one paradigm when dealing with one set of problems, and the other when he is concerned with different matters. See B. J. Loasby, ‘Hypothesis and Paradigm in the Theory of the Firm’, Economic Journal, December 1971.
- See, for example, the proceedings of the conference on accounting research held at the University of Illinois at Urbana-Champaign, April 1971, published in N. Dopuch and L. Revsine, eds., Accounting Research 1960–1970: A Critical Evaluation (Center for International Education and Research in Accounting, University of Illinois, 1973).
- A far more damaging criticism is that all we have are hypotheses. The generation of hypotheses is useful, so the hypothesis-generator is far more productive than the man who merely retails what is provided by others or who serves as a carping critic. Nevertheless, we may ask whether too much energy has not been utilized to generate hypotheses and not enough to test hypotheses' (C. L. Nelson, 'A Prion Research in Accounting’, in Dopuch and Gonedes, ibid., p. 15). Incidentally, Nelson seems to take it for granted that all theorists would accept that decision-usefulness is the appropriate test criterion. But I am sure S,OATATA is correct in implying that not all classical writers would do so; those who do the committee would place in the decision usefulness camp.
- Revsine , L. 1973 . Replacement Cost Accounting , 119 Prentice- Hall .
- “University Press of Kansas, 1970.
- See ‘Editor's Preface’ in Dopuch and Revsine, op. cit., p. iv.
- Sprouse , R. T. and Moonitz , M. 1962 . A Tentative Set of Broad Accounting Principles for Business Enterprises , American Institute of Certified Public Accountants .
- Ijiri , Y. 1975 . Theory of Accounting Measurement , American Accounting Association . Studies in Accounting Research No. 10
- American Institute of Certified Public Accountants . 1973 . Study Group on the Objectives of Financial Statements . Objectives of Financial Statements ,
- Wright , F. K. A Theory of Financial Accounting . Journal of Business Finance , Autumn
- Measuring Asset Services—A Linear Programming Approach . Journal of Accounting Research , Autumn See, for example F. K. Wright and ‘Dual Variables in Inventory Measurement’, Accounting Review, January 1970.
- Depreciating Assets: The Forward-looking Approach to Value . Abacus , December or W. T. Baxter and N. H. Carrier, ‘Depreciation, Replacement Price, and Cost of Capital’, Journal of Accounting Research, Autumn 1971.
- Accounting Standards Steering Committee discussion paper, 1975.
- 1975 . “ Report of the Inflation Accounting Committee ” . In Inflation Accounting , HMSO . Cmnd 6225.
- Basically, a nonzero API can be regarded as evidence against the Capital Asset Pricing Model (CAPM) rather than evidence of ‘market reaction’. See J. A. Ohlson, ‘On the Theory of Residual Analyses and Abnormal Performance Metrics’, unpublished manuscript, School of Business, University of California at Berkeley, March 1977. Note as well that it has recently been demonstrated that the CAPM is untestable; see R. Roll, ‘A Critique of the Asset Pricing Theory's Tests, Part I: On Past and Potential Testability of the Theory’, Journal of Financial Economics, March 1977.
- Cf. note 13.
- Little argues convincingly that any persuasive statement needs to be regarded as a value judgment; see I. M. D. Little, A Critique of Welfare Economics (2nd edn., Oxford University Press, 1957). The same must hold, therefore, for the views expressed in both SOATATA and this review article.