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Accounting iѕ a subjective subject Essay

Category: Finance & Accounting Pages: 6 Type: Essay Level: Master
Big buine required capital market that depended on accurate and ueful information. Thi wa upplied by the expanding accounting profeion. Today, a global real-time integrated information ytem i a near reality, uggeting new accounting paradigm. Undertanding hitory i needed to develop the linkage to predict thi future.
The firt prerequiite i that accounting hould agree or conform with the baic truth according to which our economic ytem function; the current economic and buine practice and the applicable law a embodied in legilative regulation or common law. Conequently, it i important that uniformity i maintained in accounting practice; in other word, a pecific et of circumtance, wherever it may be encountered mut be dealt with by everyone in exactly the ame way within the accounting proce.
Accounting theory create a framework that enure that accounting practice complie with the requirement of conformity and uniformity. Thi theory i embodied in a et of principle, policie, method, procedure and convention. The continuouly increaing cope and complexity of our economic ytem require a correponding proce of adaptation in accounting in order that the relevant information regarding economic activitie may be recorded. It i eential that everyone involved in accounting hould undertand thi proce of adaptation; moreover, a prerequiite for uch undertanding i a grap of not only the theory of accounting, but alo the tructure of that theory. (Thoma , 2003, 10)
Accounting theory i baed on a et of baic economic truth that are of a dual nature. Firt, accounting theory i baed on propoition generally accepted in the economic order of a particular ociety. For example, conider the