'Accounting theory and methodology are a waste of time'. Critically Essay

'Accounting theory and methodology are a waste of time'. Critically evaluate this statement and provide examples to illusrate your answer - Essay Example There is no practice that can succeed without a very strong theoretical base. There are rules and principles that have been developed and they are based upon past practices of successful accountants. A lot has changed in accounting due to the rapid changes in economic and social environments. Some of the principles and rules that were developed earlier on are longer applicable. Thus accountants are faced with new problems that can not be solved with the traditional explanations of accounting. New areas are emerging in accounting such as social accounting, inflation accounting and human resource accounting (Porwal 7). Methodology is important in creating an accounting theory. There are two methods of reasoning that are applied in accounting research methodologies; inductive and deductive. The two reasoning are as a result of differences in values, opinions and approaches between accounting research and accounting practice (Porwal 8). There are two types of accounting theories; the proposal or the normative type and the descriptive or the positive type. The normative type proposes alternative ways of accounting, for example, alternative method of assets valuation either by the market value or the present value. The positive type analyses and explains the existing modes of accounting, for, example, the real functions and social significance of today’s accounting systems (Fujita and Jinnai 283). Development of accounting theories began in the early 1900. The first attempt has been attributed to William Paton and John Canning. Paton was among the first people to propose the inclusion of the changes in the value of liabilities and assets in financial statements. The changes were to be measured on a current value basis. Canning’s framework of asset valuation was based on future expectations and a model to match expenses and revenues. DR Scott made contributions to the development of normative theory. His views are reflected in publications â€Å"The Basis