POSITIVE ACCOUNTING THEORY, AGENCY COSTS AND ACCOUNTNG REGULATION

Srivastava Jagriti () and Baag Pankaj Kumar ()
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Srivastava Jagriti: Indian Institute of Management Kozhikode
Baag Pankaj Kumar: Indian Institute of Management Kozhikode

No 346, Working papers from Indian Institute of Management Kozhikode

Abstract: Positive Accounting Theory (PAT) is related to dealing with such matters such as possibility regarding the choice of accounting policies by firms and in which manner the firms will react to prospective new accounting standards. In relation to this, the existing agency theory breaks down as a positive theory as it does not cater for theory of accounting regulatory development. It stems from its dependence on the rationality assumption of the investor. We need to develop affluent theories based on either better rationality assumption or which considers broader view of organisational behaviour.

Keywords: Positive Accounting Theory; Accounting Standards; Agency Theory; Rationality (search for similar items in EconPapers)
Pages: 19 pages
Date: 2019-10
New Economics Papers: this item is included in nep-acc
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