Deegan Topic: Introduction to financial accounting theory
QUESTION 1
If you developed a theory to explain how a person's cultural background influences how they prepare financial statements, would you have developed a positive theory or a normative theory?
QUESTION 2
What is a conceptual framework, and would it be considered to be a positive or a normative theory of accounting?
QUESTION 3
Why would it not be appropriate to reject a normative theory of accounting because its prescriptions could not be confirmed through empirical observation?
QUESTION 4
What is the difference between developing a theory by induction and developing a theory by deduction?
QUESTION 5
Can we ever claim to have finally ‘proved' a theory?