Accounting Issues Positive Accounting Research

Question: Discuss about theAccounting Issuesfor Positive Accounting Research. Answer: Introduction This report discuss about the positive accounting research, an exhaustive study has been done in the report to characterize the issues faced by the business while development and creation of accounts and financial statements. Diversified approaches and process used by the entity for proficient use of positive accounting research are also been discussed in the report. The report further discuss about the effects of epistemology and ontology on positive accounting approach when used by the organization. It also analyzes the human behavior in regards to their response on positive accounting approach (Choi, Kim and Simunic, 2009). Positive accounting research article are been disclosed in the report representing the demise of the current approach used in the positive accounting. The report has also discussed about the recent and prospective factors disclosing the general outcome and opinion given in the article. Research questions given in the article to illustrate the problems in relati on to positive accounting theory has also been included in the report. The report also discuss about the major problems which accountant are facing while drafting the financial statements using positive accounting theory. Human behavior and their cause and effect relationship with respect to positive accounting practices are also been discussed in the report. Impacts of positive accounting theory are also been included including the significance and limitations of positive accounting theory (Pierce and Beko, 2009). To conclude the report implications and suggestion in regards to human behavior and their effects as per the research theory are been given. Importance of maintaining due diligence by the auditor to reduce the chances of potential errors in the accounts audited by the company has also been discussed in the report. Summary of the Article The articles main focus was put on positive practices of accounting and reciprocal behavior of individuals towards the research. Human behavior can be affected by many factors which can be direct or indirect, all these factors in relation to accounting has been discussed in the given article. This can help in reducing the problems faced by the management while decision making. Intellectual program for improving the positive accounting practices are also be discussed in the article, which can also be constructive in research practices (Ahmed, Neel and Wang, 2013). While evaluating the cause and effect relationship of human behavior and the reciprocal approach used by them several opinions on positive accounting theory has been evolved. Many arguments have been raised by the researchers for that positive accounting theory is based on the basis of individual opinions which is directly related to the rational behavior of the individual. Due diligence is the basic principle followed by th e auditor while conducting audit of the accounting practices used by the organization. Therefore auditors should not be pressurized to hamper its due diligence as it may amplify the likelihood of occurrence of misstatements in the audit report. Free will of individual to take decision has also been discussed in the article. A theory focusing on the free will of human showcased that when an individual is allowed to take decision on its free will there may be chances that decisions taken are restricted by the point of view the individual has capacity of the mind of such individual. No complete theory has been emphasized which reveals the human behavior in the positive accounting theory in the given research program. The program does not give any certain implications or applicability of human behavior. The theory has also revealed that the use of positive ontology and epistemology of this approach may also give ambiguous outcomes to the reader about the human behavior. Despite the fact that the research on positive accounting theory was done to recognize the positive and qualitative research there still exist the confusion while taking into consideration the research which can offer positive outcome at the same time maintaining the quality of the research. Since data is collected from the external sources for developing the better understanding of the, qualitative research can be used as a great tool for collection of such data. Therefore after evaluating the disclaimers given by the auditor on the accounting framework of the company by the researchers to make their research consistent and acceptable to the readers. Some scholars have recommended hypothesis testing for the qualitative positive accounting. It has also been acknowledged that the developing conditions in the industry has emerged the need of adopting flexibility to adopt the accounting policy for the entity by the accountant. The article further evaluated that the paper also assisted in the research done for comprehension of the human behavior and cause and effect in relation to the human behavior in the organizations working atmosphere. Research Questions from the Article Difference between accounting practice and intellectual program. Define the factors which are required to make the research program successful. Which problems are faced in the positive accounting practices? What are the possible factors to observe the ontology and epistemology in recent accounting practice? Theoretical Framework Different frameworks have been used in the research program to identify the flaws in the present research program about the positive accounting. It has further been evaluated that the presentation and theoretical framework can enhance the effectiveness in the company of positive accounting research. The article has also focused on the legal compliance need to be followed on while auditing the accounts of the company and impact of audit on the management of the company. According to the qualitative research there are many tests which can be applied while conducting the audit to reduce the chance of misstatement in the accounts of the company. Accounting data may include many errors or material misstatement which may affect the decisions of the management (Simunic, 1980). Since audit of the financial statement of the company improves the effectiveness of those statements it can be said that the inclusion of qualitative research in the positive accounting has been an important step. According to the positive accounting theory audit fees and proficiency of manager are the two important factors for the research. Fees of the auditor depend on the multifaceted work that is required to be undertaken by the auditor as the audit engagement. Many tests have been recommended by this article including hypothetical test which can be applied by the auditor while conducting audit. Implementation of audit functioning by the auditor in the positive accounting research can be assisted by the use of hypothetical test. This test also facilitate in developing better understanding of the audit functioning implied by the auditor. Qualitative positive research used in the article is also provided by the very famous Darwins theory of evaluation (Dyckman and Zeff, 2014). Two major reasons to adopt qualitative positive accounting theory discussed in the paper are collection of data from the public and to interpret such data and implementing it to evaluate variances in the positive accounting. Auditor of the company can also use this approach in measuring the accounting data and conducting audit procedure on such data received from the company. This approach also helps the auditor in identifying the accountants behavior and evaluating the alternatives used by the accountant while preparing the financial statements of the company (Fang, Haw, Yu and Zhang, 2014). Auditor can also use it to identify and solve the possible errors present in the accounting framework of the company. Since the data is collected by the accountant using this approach to prepare the accounts it can help the auditor to give its opinion on th e accounts prepared by the accountant. Null hypothesis used to evaluate the human behavior has also been accepted by the positive accounting. Null hypothesis uses test statistic as an important assumption while evaluating the possible factors in human behavior. Implications of Positive Accounting Understanding of human behavior is one of the major implications of positive accounting (Li, 2015). Many research programs have provided cause and effects of human behavior on positive accounting theory. Collection of data to measure the behavior of accountant has also been assisted by the qualitative approach of accounting. Therefore human behavior can be studied by the researchers using this valuable dimension of research. Audit procedure was developed to focus on identification of inaccuracy and frequency of mistake occurring in the accounts of the company. The reason provided while this system was developed was to propose ready answers to the accountant such that the problems can be resolved. It was not developed to improve the understanding of the human behavior in relation to accounts. There are many academic papers which are still continued to evaluate the human behavior and their reciprocal approach. Limitations of Positive Accounting Research The research has collected its data from the primary or secondary sources which cannot be considered as the reliable sources to evaluate the human behavior and it may not succeed in particular circumstances. Much time while following the positive accounting practices auditor may not be Abe to discover the errors in the financial statements. Since the data collected using ontology and epistemology provides less certain results it may not be helpful in research. Therefore auditor may sometimes fail in deterring the errors in the accounting data. Research done using hypothetical test may not that effective and efficient as expected since the data used in this test are collected using the assumption which are not certain (Everett, Neu, Rahaman and Maharaj, 2015). Accountants understanding also bound the effectiveness of the positive accounting research. Difference in the thoughts of accountant and the auditor is also one reason which limits the efficiency go the positive accounting approach. Conclusion Significance and limitations of positive accounting theory and has been discussed in the report. Also the effects of present accounting practices have been reflected in the successful implementation of the research. Requirement of data is also an important need while gauging the imperative theory used by the auditor in evaluating the performance of the company using accounting data. Major critique provided in the report is about the utilization of the data and qualitative approach used while collecting the data. Further it was evaluated that the auditor has to differentiate the behavior of the accountant and the methods used by him in preparation of the final accounts of the company. The research has also facilitated the auditor in identifying the misstatement in thru accounts o the company which are prepared by the accountant. The article consisted of many frameworks for accounting and different theories used in the decision making of accountant and auditors response in his audit report while analyzing the behavior of the accountant. Further problem determined in the article was to establish the cause and effect relationship of human in respect to accounting. While concluding the report it can be said that auditor has been assisted by the positive accounting theory by providing the standards to reduce the possibilities of the misstatements in the accounts of the companies while conducting audit of the company. References Choi, J.H., Kim, J.B., Liu, X., Simunic, D. A. (2009). Cross-listing audit fee premiums: Theory and evidence. The Accounting Review. 84 (5), 1429-1463. Pierce, J. Beko, M. (2009). Moral in tooth and claw. The Chronicle of Higher. 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