Professional Documents
Culture Documents
Lectured by S. Sutthachai
Accounting Department
Faculty of Management Science
Khon Kaen University
A Theory: Definition
A theory: ‘a set of interrelated constructs
(concepts), definitions, and propositions that
present a systematic view of the phenomenon
by specifying relationships among variables
with the purpose of explaining and predicting
the phenomenon’
A theory includes propositions linking
concepts in the form of hypotheses to be
tested.
A Theory: Definition
Elements of a theory include:
Concepts: the main units of a theory and it is
devised to refer to identifiable characteristics or
phenomena.
: The better the concept, the better the
theory.
: A formation of concept starts from the
idea or percept generating a concept designated
by terms.
A Theory: Definition
Elements of a theory include:
Propositions: establish relation between the
concepts of a theory.
: designated by a sentence.
: characterized by 1) the number and
degree of predicates; and 2) the degree of
generality.
A Theory: Definition
Elements of a theory include:
Hypotheses: a proposition about a relationship
whose truth or falsity is yet to be determined by
an empirical test.
: Confirmation of a theory is the
extent to which a hypothesis is capable of being
shown to be empirically true, that is, of
describing the real world accurately
: Falsification??
Functions of a Theory
Descriptive function: using the constructs or
concepts and their relationships so as to
provide the best explanation of a given
phenomenon and the forces underlying it.
A C o n c e p tu a l F ra m e w o rk
A c c o u n t in g P r in c ip le s , C o n c e p t s a n d P o s t u la t e s
A c c o u n t in g T e c h n iq u e s
G AAP A c c o u n t in g S t a n d a r d s A c c o u n t in g P o lic ie s
GAAP
GAAP (Generally Accepted Accounting
Principles): a guide to the accounting
profession in the choice of accounting
techniques and the preparation of financial
statements in a way considered to be good
accounting practice.
GAAP
Conditions under which an accounting
method will be deemed as generally
accepted:
The method will be in actual use;
The method would have support in the
pronouncement of the professional
accounting societies;
The method would have support in the
writing of a number of respected accounting
teachers and thinkers.
GAAP
generally accepted????
GAAP
Little GAAP and Big GAAP
A little GAAP for smaller and/or closely
held businesses.
A big GAAP is for large companies
Project planning