Muhammad Faizal

1201103040015

Critical Perspectives of Accounting Theory

Theory according Tuanakotta (1984: 1) is a set of principles
hypothesis, conceptual and pragmatic interwoven with one another,
which form a frame of reference to a field of knowledge. The theory is
a process that is designed to be a set of principles hypothesis,
conceptual and pragmatic interconnected into a sense that serves as
the basis for assessing practices and explain the phenomenon that is
happening or will happen phenomenon.
Tuanakotta further define accounting theory as a logical
reasoning in the form of a set of principles or principles that (1) the
reference framework for assessing the accounting practices and (2)
guidelines for the development of practices and new procedures.
Suwardjono (2005: 2) states the same thing, accounting theory
became the foundation for solving the problems of accounting
reasonably or reasoning ethically and scientifically justifiable.
Accounting theory as explained above no normative (prescription) and
positive (description).
The main purpose of accounting theory is to provide a basic
prediction and explanation of behavior and accounting events.
Normative theory (normative theory) using the judgment value (value
judgment) whereas theory positive (descriptive theory) seeks to
discover relationships actually happened.
Normative theory seeks to provide guidelines for what should be
done based on consideration of the value (value judgment) used in
formulating the theory. Normative theory is often called the theory of a
priori (that is cause to effect, or deductive). The reason, normative
theory is not generated from empirical research, but resulted from the
"semi-research". Normative theory just mentioned hypotheses about
how things should be put into practice, without testing the hypothesis.
Positive accounting theory seeks to explain the observed
phenomenon of accounting based on the reasons that led to the
occurrence of an event. In other words, positive accounting theory
intended to explain and predict the consequences that occur when the
manager determines the particular option. Explanations and
predictions in positive accounting theory is based on the contractual or
agency relationship. The positive accounting theory, as developed by
Watts and Zimmerman and others, based on the assumption-based
economy central, all controlled by the actions of individual self-interest
and that people will act in an opportunistic manner at the level where
action will improve their welfare.
A few critics on accounting income in the traditional form are
accounting income concept not yet formulated clearly, no theoretical

long-term base to calculate and provide accounting income. General

accepted accounting practices may be done inconsistency by the firm
to measure periodic income in difference years. For the price level
difference, it will have changed mean of historic money value, and the
other information able very useful for investor in decision making.
By using an approach derived from positivism, accounting
empirical studies developed to support and justify a variety of
accounting methods or practices in the real world. Then the results of
the empirical research is in the form of a statement or proposition that
will be a positive accounting theory. Positive accounting theory does
not provide prescriptions and therefore does not provide a means to
improve accounting practices. Howieson in Deegan gives a view that
by failing to provide recipes, positive accounting theoreticians can
separate themselves from the practice of accounting.
Positive accounting theory not value free, as asserted. If we look
at a variety of studies using PAT, we will see the absence of
formulation, namely the lack of guidelines as to what to do. This is
justified by the positive accounting theoreticians to say they do not
want to impose their views on others but prefer to provide information
on the expected implications of certain actions and allow people to
decide for themselves what they should do. For example, they may
provide evidence to support a prediction that the organization is
approaching the accounting-based debt deal will use accounting
methods that increase their profits and assets are reported. Based on
the above explanation it is clear that the theory of positive not free
value (value free) otherwise loaded with value (value laden). The claim
that the positive accounting theory is a form of value-free ideology to
cover up reality.
Positive accounting theory has a basic assumption that all
actions are controlled by the desire to maximize the welfare of a
person. For many researchers as it shows assumptions are too
negative perspective of the human being. Opinions about loyalty,
morality and the like are not included in the theory (because they do
not include other accounting in economic theory). Individual human
beings are essentially social beings as well. This is a basic view that
explains human addition will pay attention to the interests of
individuals, also have a responsibility to consider the interests of the
people.
Ritzer and Goodman (2007) explains that Auguste Comte as the
father of positivism, developed the theory of evolution or the law of
three tiers. The theory says that not only the world, society, science,
people, and even ideas will evolve beyond the stage of theological and
metaphysical stages and reach the top of the positivistic stage
characterized by confidence in science (science). Humans began to
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stop an investigation into the cause of the absolute (God or nature)

and focus research on the observation of the physical nature and social
world to know the laws that govern them.
From some of the criticisms raised against the positive
accounting theory, then there are some things to overcome the
weaknesses of positive accounting theory. First, the integrated utility.
Contributions utility of knowledge of accounting research by Watts and
Zimmerman needs to be expanded into an integrated utility, the
contribution in the form of a multidimensional and multidirectional. Not
only is linear and always dependencies and one direction or multiple
directions that form a partial utility. Second, value free to value laden.
Science including accounting, it is not value-free, but is loaded with
values that may affect the accounting. There will be the influence that
arises when the value of the sociological-psychological contact with the
results obtained by the accountant in the form of financial statements.
Chua (1986) said that accounting is not only seen as a rational
technique alone, a service activity that is separate from public
relations.
The rationale for analyzing accounting theory in a normative
approach is too simple and does not provide a strong theoretical basis.
The inability normative approach in testing the theory empirically,
because it is based 'on premise or assumption is wrong so that its
validity cannot be tested empirically. Normative approach more
focused on the prosperity of individual investors rather than the
prosperity of the wider community. Normative approach does not
encourage or allow the allocation of economic resources optimally in
the capital market. It is given that the economic system based on
market mechanisms, accounting information can be a control device
for the community in allocating economic resources efficiently.