Accounting Theory Construction.docx

Hence a theory can be developed from observations of

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accountants in order to copy their accounting procedures and principles. Hence, a theory can be developed from observations of how accountants act in certain situations. In contrast, psychological pragmatic approach requires theorists to observe users’ response to the accountants’ outputs such as financial reports. A reaction by the user is taken as evidence that the financial statements are useful and contain information relevant to the users. Syntactic and semantic theories Syntactic theories are based on a logical relationship, which has to do with the rules of the language used. This theory relates basic concepts at the abstract level and emphasis on the logical reasoning and not the empirical content of the statement in the real world. It refers to a flow of logic, not to the accuracy of an argument’s representation of the real world. Semantic theory in contrast relates basic concepts of a theory with the real world. Verification is based on the premises and conclusion, not 17 on the logical reasoning. Semantics is the study of meaning. It focuses on the relationship between signifiers such as words, phrases, signs and symbols. Thus, a semantic theory provides a framework to specify word meaning. Normative theories Normative theories are more concerned with what should be done, rather than with analyzing and explaining what currently accepted practice is. Normative theories developed in 1950s and 1960s,
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