THE DEFINITION OF ACCOUNTING THEORY AND

THE MODIFIED OF FINANCIAL STATEMENT

SULTHAN HAKIM/ 145020308121003
PREAMBLE

The exposure of accounting theory is based on the orientation of the

positive accounting development and accounting normative. Positive
accounting theory is described more detail in William R. Scott, while
the normative accounting can be learned in Suwardjono. Positive
accounting theory is closely related to the definition of accounting as
a science. Thus accounting as a science is interpreted on the basis of
empirical observation. Positive accounting more emphasis on getting
the truth about a phenomenon by applying scientific methods, without
the use of a judgmental value.
 Aims PROBLEMS FORMULATION
1. What is accounting theory and the target(s) of accounting theory itself?
The main purpose of accounting 2. What is the structural elements of accounting theory?

theory is to present a basis for 3. What is the modified financial statements?

4. Who are the users of financial statements?
predicting and explaining behavioral
and accounting events. The theory is
defined as concepts, definitions and
propositions that presents a
systematic view of phenomena by
explaining the relationship between
variables that aims to explain and
predict the phenomenon.
1. ACCOUNTING THEORY

Accounting theory is a branch of accounting which consists of a systematic statement

of principles and methodologies that differentiate the practice. Vernon kam (1986) considers
that the theory of accounting is a comprehensive system which includes postulates and
theories related to it. He divides elements in multiple element theory: postulates and basic
assumptions, definitions, accounting purposes, principles or standards, and procedures or
methods.
THE NATURE OF THE STRUCTURE OF ACCOUNTING
THEORY

Any approach and methodology used in the preparation of accounting theory (deductive or
inductive, normative or descriptive), the reference frame is generated based on a series of
elements and relationships that govern the development of accounting techniques
The structure of accounting theory consists of several elements following:
1. Statement of financial reporting purposes.
2. Statement of accounting postulates and theoretical concepts associated with
environmental assumptions and the nature of the accounting unit. Postulate and
theoretical concepts derived from the statement of purpose.
3. A statement on the basic principles are based on the postulate and theoretical concepts.
4. The body of accounting techniques derived from accounting principles
Three elements of the existing accounting theory, namely:

1. Postulate accounting;
2. theoretical concepts of accounting;
3. Accounting principles.
THE ACCOUNTING POSTULATE

1. Entitiy Postulate
2. Going Concern Postulate
3. Unit of Measure Postulate
4. Accounting Periodic Postulate
THE MODIFIED OF FINANCIAL STATEMENTS

Accounting is a set of knowledge about national engineering service provision in the form of
quantitative financial information organizational units within an environment of certain
countries, this can be realized with the financial reporting. Financial reporting includes
structures and processes to achieve financial reporting purposes that would help achieve
economic and social objectives of the country.
MODIFIED PROCESS OF FINANCIAL STATEMENTS

a. Determine the basic concepts, postulates, environmental factors.

b. Determining reporting purposes.
c. Identify the intended party financial reporting.
d. Select and determe of financial reporting information.
e. Determe of how to convey information.
f. Identify the obstacles to reporting.
g. Drafting the official documents in the form of a concept statement.
h. Determe of accounting standards and accounting system design.
FINANCIAL STATEMENT USERS

Intern
al

User
s

Extern
al
INTERNAL USERS

This is related to the operations of the company. In this party can be a

manager, for instance the financial statements used for policy
decisions in company operations.
EXTERNAL PARTY

Company owner
Investors and shareholders
Creditors
The government
Employee
CONCLUSION

The understanding of accounting theory depends on

whether accounting is viewed as a science or technology,
accounting theory as science (positive accounting) a set of
concepts, definitions and proportion (statements) that are
systematically interrelated to explain and predict accounting
phenomena. Accounting theory as technologies (accounting
normative) is the process of reasoning to justify the
feasibility of practice, standards, or certain accounting
principles (logical reasoning). Positive accounting theory as
the target, while the normative accounting theory as the
target.
CONCLUSION

The objective of financial statements, statements of

accounting postulate and theoretical concepts of
accounting assumptions, are related to the environment
and the nature of the accounting unit, the statement on
the basic principles are based on the postulate and
theoretical concepts, torso techniques of accounting
derived from accounting principles, the four elements
above are a reference frame of a structure of accounting
theory.
CONCLUSION

The results of modified financial reporting documented in the

form of a conceptual framework (conceptual framework)
which consist of three concepts namely Accounting Principles,
Accounting Standards, General Acceptable Accounting
Principles (GAAP)/ PABU, which is analogous to function to the
constitution. There is a miraculous interested parties on the
financial statements include investors, employees, Lender
(bank), suppliers / creditors, customers (customer),
Government, and Community.