Properly identified imaginary needs, an inaccurately proposed methodology: The case of Rochester school of accountancy’s positive accounting methodology

Abstract

Research Question: Whether accounting research has been in a better status after the domination of Rochester School of Accountancy’s Positive Accounting Methodology. Motivation: This study revisits the debate of the validity of Rochester school of accountancy's positive methodology. Rochester school of accountancy's positive accounting research has properly identified the assumed imaginary need of the US market. While positive accounting methodology may not be scientific under various accounts for science, it has contributed to accounting methodologically. Idea: Restricting financial accounting on issues related to decision-usefulness and perceiving corporate reporting as a product of accounting choices from an agency theory perspective constrains other dimensions of reality. Any restrictions to definitions of the role of accounting and its function (Glauter & Underdowen, 1974) blocks profoundly deep-rooted in contextual factors such as a country's social, political, and economic environment that all make up accounting which supposedly needs to be considered (Hellmann et al., 2010) in properly theorizing comprehensively practiced accounting. Data: Extensive writings have that documented internationally throughout time have been looked over. Tools: An analytical and critical examination has been conducted upon internationally accounting literature in a wide-ranging manner to provide an evaluation regarding Rochester school of accountancy's positive accounting research. Findings: The positive accounting methodology of the Rochester school of accountancy has been criticized by several accounting researchers for decades and even deem it disappointment and probably shame. Yet, Watts and Zimmerman declared themselves prime candidates. Its prevalence is the rhetoric of scientific inquiry. A measure of the failure of the so-called positive accounting methodology has achieved lays in its inability to become universal because differences in institutional environments persevere in the world. Contribution: Revisiting the debate of the validity of Rochester school of accountancy's positive methodology potentially contributes to our knowledge in assessing its legitimate prevalence in academic accounting research. New accounting researchers and scholars need to be aware of the predominant theoretical structure that governs the empirical financial paradigm and its limitation. This is especially significant to accounting researcher who has been intellectually trained under the positivistic tradition of economics.

The Dilemma: Push-Down Accounting and the Conceptual Framework of Financial Accounting: A Case of Contradictions between Relevance and Reliability

“…This does not imply that the same practices are applicable in the United States as well. As mentioned earlier, accounting is social knowledge that is influenced by the society in which it is applied [12,[60][61][62], the needs of the people and the businesses in that society [14,23,61,[63][64][65][66][67] and the culture [13].…”

Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

“…A sustainable report covers the non-financial facts (Man & Bogeanu-Popa, 2020: 13) that a financial accounting theory needs to include. However, none of the proposed financial accounting theories has been universally accepted (Al-Adeem, 2017;2019a;2019c;2019d;2021a;Al-Adeem & Fogarty, 2010;Al-Hazzani & Al-Adeem, 2020Beaver, 2002Belkaoui, 2004;Brearey & Al-Adeem, 2019;Chatfield, 1977;Coetsee, 2010;Gaffikin, 1987;García, 2017;King, 2006;Ijiri, 1967;Lee, 2009;SATTA, 1977), nor has any completely encompassed the corporate financial and non-financial dimensions of the economic and social realities of the corporation, its impact on society, and how it is impacted by society, which the classical accounting measurement model fails to value.…”

“…The concept of 'decision-usefulness' has been subject to severe criticism (Al-Adeem, 2021a;Anthony, 1983;Dopuch and Sunder, 1980;Horngren, 1981;Macve, 1981;Nurnberg, 2015;Power, 1993;Williams and Ravenscroft, 2015;Young, 2006) for not leading to suitable theory instigation (Coetsee, 2010). That corporations are founded to maximize the values of shareholders is a myth (Stout, 2012;Stevelman, 2013;Weinstein, 2013).…”

Understanding Professor Ross Watts by Applying Kuhnian Interpretation of Science Progress

“…"Rochester School of Accounting" (Christenson [13] as cited in Williams [14]) "may not be a new school in terms of the history of ideas as much as a branch office of rather old schools" [14]. "The Rochester School was heavily influenced by the Chicago school of economic thought" Chabrak [15] which deem it a branch for the Chicago School of Thought [16]. Watts [17] is actually a believer in the mechanism of the invisible hand.…”

“…Such a declaration of their winning was in the despite of serious and legitimate criticisms directed to their research methodology since it was first introduced. They deemed themselves front runners on a market base [16]. justified the claimed success of their proposed research methodology by the wide spread of its usability.…”