Watts & Zimmerman's Positive Accounting Theory

attempts to Describe and Predict: How people behave
1. So claims to be a Scientific Approach
  1. So emphasises Empirical Testing
views an organization as a Nexus of Contracts
1. between Senior Managers (directors who approve FS) and
  1. Shareholders
    1. (Agency Theory) relationship governed by
      1. Contract, including profit based bonus scheme
        leading to Hypothesis 1: Bonus Plan (Healy Study, 1985)
  2. Debtholders
    1. relationship governed by
      1. Debt Covenant
        leading to Hypothesis 2: Debt Covenant (Sweeny Study, 1994)
  3. Politicans, Media, etc.
    1. relationship influenced by
      1. Informal Contract
        leading to Hypothesis 3: Political Costs (Jones Study)
  4. who can behave Opportunistically
  5. who determine Financial Statement Variables (e.g. Profit Figure)
    1. by using Generally Accepted Accounting Principles, which provide a Restricted Choice
makes no attempt to Guide (which is Normative Theory)

Zusammenfassung der Ressource

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