Question

Discussion Questions :
1- discuss the contributions of paton and canning to the development of accounting theory.

2- how did ASOBAT define accounting and what two new ideas arose from this monograph?

3- what were the approaches to accounting theory identified by SATTA?

4- what is the purpose of the conceptual framework

5- discuss the qualitative characteristics of accounting information as outlined in SFAC NO. 8

6- discuss the issue of principles based vs. rule based accounting standards.

7- what were the purposes of the wheat and Trueblood committees?

8- what is the difference between normative and positive theory?

9- discuss the evolution of the three private sector accunting standard setting organizations?

Answer 1

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Answer 1discuss the contributions of paton and canning to the development of accounting theory.

Paton = Full name William A Paton and John B.Canning . They are first attempt to develop Accounting theory in the USA . Paton view was mainly on “ the change in Asset and Liability which should be reflected in the Financial Statement ,Also measured on current value basis

Canning suggested a framework for valuation of assets and measurement of future expectation . Most important to note that Canning to start model of revenue and expenses.

Answer 2-how did ASOBAT define accounting and what two new ideas arose from this monograph

Full form of ASOBAT is ‘A Statement of Basis Accounting Theory . This theory was developed in year 1966 . Main focus of this theory is to identification , measurement , economic information and information on decision making

Major two new idea has been developed . Under this theory ,member start looking accounting as Information system . One of the important factor is economic income . This help us to understand allocation of scare resources.

This theory also helps user to make decision . In this theory , define accounting as a behaviour Science/ In this theory , The committee mainly focus on relevance , verification , freedom from bias and quantification

Answer 3- the approaches to accounting theory identified by SATTA

Full form of SATTA – A statement on Accounting Theory amnd Theory Acceptance .This concept was develop in Year 1973. This theory was highlighted ablut current financial accounting literature and a place where professional understand relative accounting theory . SATTA and ASOBAT has not much difference . ASOBAT theory was trying to establish evaluation of accounting information and valuation system , where as SATTA theory trying to develop the reason why it was impossible to enable the professional to accept a single valuation system for accounting

Answer 4 - what is the purpose of the conceptual framework- Main purpose of the conceptual framework would be to assist IASB to develop future IFRS and review existing IFRS . The main reason to develop an agreed conceptual framework of accounting are that for setting accounting standard , to solve any accounting dispute , The conceptual framework also assist accounting paper , financial statement to develop accounting policies which not covered by existing standard .