Question
In the 1920s to 1960s, many accounting researchers concentrated on developing theories of accounting based on observing and documenting the behaviour of practising accountants. (i)
In the 1920s to 1960s, many accounting researchers concentrated on developing theories of
accounting based on observing and documenting the behaviour of practising accountants.
(i) Explain the reasoning in the above theory development. (5 marks)
(ii) What is the limitation(s) of above supporting theory? (6 marks)
(b) During the 1970s, there was a general shift in theory development to prescriptive in nature.
(i) Explain how the above theory was developed to overcome the weakness in theory
mentioned in (a) above. (8 marks)
(ii) Give TWO (2) examples of the theory which demonstrates the weakness of this theory.
(6 marks)
[Total: 25 marks]
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