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THE DEVELOPMENT OF
ACCOUNTING THEORY
Introduction
What is theory?
Webster defines theory as:
Systematically organized knowledge, applicable in a relatively wide
variety of circumstances, a system of assumptions, accepted principles
and rules of procedure to analyze, predict or otherwise explain the
nature of behavior of a specified set of phenomena.
Normative theory
Positive theory
Why is the development of a general theory of
accounting important?
Allocating scare resources
What is the relationship of accounting research
to accounting theory?
Various theories of accounting will be discussed in
Chapter 4
THE EARLY HISTORY OF
ACCOUNTING
Denise Schmandt-Besserat
Origins of writing are actually found in counting.
Pieces of fired clay in Middle Eastern archeological sites.
Tokens comprised an elaborate system of accounting that was used
throughout the Middle East from approximately 8000 to 3000 B. C.
Each token stood for a specific item
Used to take inventory and keep accounts
Types of pronouncements
D
The FASBs Accounting Standards Codification
June 2009
FASB announced Codification
would be single source of all
nongovernmental US GAAP
effective 9/15/09.
Involved following steps:
1. Restructure all U.S. GAAP literature by
topic into a single authoritative
codification.
2. Modify the standard-setting process to
focus on updating the codification.
The FASBs Accounting Standards Codification
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