Financial Management

Advantages- Less liability for stakeholders. Ability to raise funds/capital in the form of stocks as needed.

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1. Discuss the nature of stock as an investment. Do most stockholders play large roles in the management of the firms in which they invest? Why or Why not?

‘Conflicting perspectives are the result of individual desires. Manipulation and distortion are used in the attempt to achieve a desired end.’

S., & Hassan, M. K. (2012). The domination of financial accounting on managerial Commerce & Management, 22(4), 306-327. doi:10.1108/10569211211284502

“It was enjoyable to see the different point of view not only from different races, but from different genders and different generations.”

The benchmark of the validity of the findings of a study is evident in the research

When talking about accounting, the first thing we should know is the history of its development. Traditionally, the development is from inductive to deductive. Inductive theory assume what is done by the majority is the most appropriate practice. However, It did not seek to evaluate the logic or merit of

Positive accounting theory is a form of motivation to the managers of the entity’s that enable managers to choose between accounting methods inorder to achieve the required reports or objectives.

Before 1970s, most of accounting research were based on deductive-normative – and not positive – approach. The biased perspective of accounting journals of the time were so prevalent that they did not accept articles of positive approach for a long time. In the late 1970s and early 1980s, a new type of theory was introduced and was based on a new research method which had been conducted by the accountants in the “Rochester High School of Accounting”. This new theory was called "Positive Accounting". Positive accounting was not only developed rapidly but also achieved prevalent rule in accounting journals. Despite the field of finance, positive accounting research projects were not based on their own theories, but on neo-classical economic theories,

Positive accounting theory (PAT) offers one such attempt to make accurate predictions regarding real world events as captured by accounting transactions and to explain why firms choose between various accounting techniques. PAT attempts to explain a firm's choice of accounting methods on the basis of self-interest. PAT also provides a framework for

The Positive Accounting Theory focuses more on the schematics and operations of various business relationships and the assistance of accounting in functioning of these. For example the disclosure of financial statements in the relationship between the management and stake holders.

This paper is a contribution made my Ross L. Watts and Jerold L. Zimmerman, titled as “Towards a Positive Theory of Determination of Accounting Standards” published by American Accounting Association. It explores the factors that have been influencing management’s attitudes in lobbying on accounting standards. It describes an attempt made by two in evolution and development of the Positive Accounting Theory by reasoning, factors like taxes, regulations, management compensation plans, book keeping cots, etc. The results concerned with the theory are consistent.

The definition of accounting theory according to Coetsee (2010) is described in two different ways. The first philosophy concludes that accounting theory is a set of general principles that guide the evolution of accounting practice. The other philosophy describes accounting theory as activity of explaining and predicting accounting practice. What the viewer can see from the statement of the first philosophy is that the accounting theory exists before accounting practices meanwhile the latter states that the accounting practice exists before the theory. Since there are many arguments about this matter, many academic researchers have concluded that accounting theory can be divided into two categories which are positive and normative theory.

Accounting is the language of business. It is a profession that is being guided by principles, concepts, conventions, laws, etc. All these fundamental building blocks serve as common and general compasses to all practitioners of the profession. In some cases, they are nation-wide tailored, while in other cases, they are universally tailored. Accounting as a living, practical, dynamic and realistic profession covers so many areas of social, economic (business), and governmental activities. Surely, any endeavour that involves monetary and material activities create a room for the services of Accounting. Many of the human endeavours for which the accounting profession plays significant (some times inevitable) roles include; Banking, Insurance, Manufacturing, Farming Contracting, Oil and Gas, Mining, Transportation (Air, Land and Sea), Educational Institutions, Churches, Ministries, ICT, Hire Purchase, Local Government Authorities, Estate Businesses, Export and Import Businesses, Bill of Exchange Transactions, Royalties Transactions, Consignment Transactions, Stock Market Transactions, Sports, Entertainment, Hospitals and Hospitality Industry, etc.