The logic of positive accounting research

Article Abstract:

Positive accounting research (PAR) attempts to explain accounting practices as emanating from the actions of managers to enhance their economic self-interest. Managers choose those accounting practices that will maximize wealth within the constraints imposed by shareholders, choosing those procedures that maximize the firm's value or their own compensation. PAR has a major flaw in area of translating theoretical language into empirical language for experimentation. The translation process, by defining a causal variable in the terms of the phenomenon to be explained, results in a tautology. By transforming accounting practice into its own explanation, PAR precludes deeper understanding of accounting practices.

Management research

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A descriptive study of social responsibility mutual funds

Article Abstract:

Results of descriptive research into US socially responsible mutual funds are described. Fund managers use very similar techniques and social criteria for assessing companies, although no one element was used unanimously. Social information sources varied from fund to fund, with most frequent use made of data provided by the firms. Managers feel that higher priority should be given to demanding public disclosure of data already produced for limited distribution. An example of this data would be equal opportunity information.

Mutual funds, Corporate social responsibility, Socially responsible investments

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The legitimate concern with fairness

Article Abstract:

Singular reliance on decision usefulness as a central accounting research principle has two serious conceptual flaws: (1) assuming symmetry in decision usefulness, and (2) neglecting the simultaneous nature of distributive effects and efficiency. Arguments are offered for using fairness as a construct to give accounting a lexicon which is adequate to discussion of accounting problems. Explicit consideration of fairness implies the development of accounting epistemology and moral concerns as well.

Decision making, Management, Fairness, Decision-making (Ethics)

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