(c) What are the disadvantages of this approach! (d) Do you believe that this is a good approach to developing a theory of accounting! Why or why not! 3. Describe the semantic approach to theory construction. (a) should the outputs of accounting systems be verified? (b) If so, how can this be achieved? If not, why not? 4. In the 1970s there was much debate about how to account for inflation. (a) Did this debate involve positive theory or normative theory! (b) is it important to account for the effects of inflation! Why or why not? 5. Researchers who develop positive theories and researchers who develop normative theories often do not share the same views about the roles of their respective approaches to theory construction (a) How do positive and normative theories differ? (b) Can positive theories assist nominative theories, or vice versa? If yes, give an example. If not, why not? 6. Can accounting theury be constructed as a purely syntactical exercise? Why or why not? 7. Classify the following hypotheses according to whether they are the conclusions of positive or normative theories. Explain your answers. (a) Historical cost accounting should be replaced by a market value system. (1) Historical cost accounting provides information used by creditors (c) Historical cost accounting is used by many managers to allocate costs in determining divisional performance. 8. Give an example of the types of issues that might be resolved by accounting theories developed using the following methods of theory construction. (a) psychological pragmatic approach (b) scientific approach (c) naturalistic approach (d) normative approach (c) positive approach 9. Explain the naturalistic and syntactic approaches to theory construction. Are these approaches mutually exciusive? Why or why not? 10. The decision-usefulness approach to theory development can be used to develop theories of accounting (a) Explain what is meant by the decision-usefulness approach to theory development. (b) How can the decision-usefulness approach relate to accounting theory formulation? (C) Give two examples of decisions that require data obtained from accounting reports. 11. What type of a theory is historical cost? How has it been derived? Do you have any criticisms of historical cost accounting? 12. Explain the psychological pragmatic approach to accounting theory. Give an example of how it can be applied 13. Give an example of an accounting convention usually adopted in historical cost accounting, Conventions govern the way accounting is practised, and conventions are by definition, known from practice. (a) What theoretical approach is used to derive conventions? (b) What does your answer to (a) imply about the potential for accounting theories based on conventions to be innovative in providing useful information? PART 1 Accounting theory 14. How do you think the massive amounts of data now available from information technologies will affect (a) the development of accounting theories? (b) the testing of accounting theories? 15. What are some common criticisms of a scientific approach to professions such as accounting and law? Are they valid? Why or why not? 10. Early auditing theories were constructed by observing the practices of auditors. What type of theory construction is this? What are the advantages and disadvantages of this approach? *. How would you design an experiment to provide evidence on how auditors make judgements? What competing issues would arise! (c) What are the disadvantages of this approach! (d) Do you believe that this is a good approach to developing a theory of accounting! Why or why not! 3. Describe the semantic approach to theory construction. (a) should the outputs of accounting systems be verified? (b) If so, how can this be achieved? If not, why not? 4. In the 1970s there was much debate about how to account for inflation. (a) Did this debate involve positive theory or normative theory! (b) is it important to account for the effects of inflation! Why or why not? 5. Researchers who develop positive theories and researchers who develop normative theories often do not share the same views about the roles of their respective approaches to theory construction (a) How do positive and normative theories differ? (b) Can positive theories assist nominative theories, or vice versa? If yes, give an example. If not, why not? 6. Can accounting theury be constructed as a purely syntactical exercise? Why or why not? 7. Classify the following hypotheses according to whether they are the conclusions of positive or normative theories. Explain your answers. (a) Historical cost accounting should be replaced by a market value system. (1) Historical cost accounting provides information used by creditors (c) Historical cost accounting is used by many managers to allocate costs in determining divisional performance. 8. Give an example of the types of issues that might be resolved by accounting theories developed using the following methods of theory construction. (a) psychological pragmatic approach (b) scientific approach (c) naturalistic approach (d) normative approach (c) positive approach 9. Explain the naturalistic and syntactic approaches to theory construction. Are these approaches mutually exciusive? Why or why not? 10. The decision-usefulness approach to theory development can be used to develop theories of accounting (a) Explain what is meant by the decision-usefulness approach to theory development. (b) How can the decision-usefulness approach relate to accounting theory formulation? (C) Give two examples of decisions that require data obtained from accounting reports. 11. What type of a theory is historical cost? How has it been derived? Do you have any criticisms of historical cost accounting? 12. Explain the psychological pragmatic approach to accounting theory. Give an example of how it can be applied 13. Give an example of an accounting convention usually adopted in historical cost accounting, Conventions govern the way accounting is practised, and conventions are by definition, known from practice. (a) What theoretical approach is used to derive conventions? (b) What does your answer to (a) imply about the potential for accounting theories based on conventions to be innovative in providing useful information? PART 1 Accounting theory 14. How do you think the massive amounts of data now available from information technologies will affect (a) the development of accounting theories? (b) the testing of accounting theories? 15. What are some common criticisms of a scientific approach to professions such as accounting and law? Are they valid? Why or why not? 10. Early auditing theories were constructed by observing the practices of auditors. What type of theory construction is this? What are the advantages and disadvantages of this approach? *. How would you design an experiment to provide evidence on how auditors make judgements? What competing issues would arise