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Accounting Theory & Measurement in Accounting

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It has been said that individual opinions, values and ethics can have an impact of the way that accounting theories are constructed. Discuss what is meant by this statement. In your discussion you will need to make reference to at least two (2) accounting theories.

In your opinion, what are the key principles for 'sound' measurement. Apply these principles to Modified Historical Cost Accounting. Does Modified Historical Cost Accounting live up to these principles? Discuss.

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Accounting theory and measurements in accounting are examined.

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Below is your study guide. Please note that this is a study guide and NOT an actual essay. I have written down my thoughts on the talking points I think you can include in your final paper.

First, I suggest that a short discussion on what you think individual opinions, values and ethics are before discussing their impact on the construction of accounting theories. In a way, individual opinions, values and ethics are interrelated. I remember in a leadership course I talked for my MBA, my professor discussed how the actions of individuals are directly affected by their values and ethics. This relationship can be best illustrated with the figure below.

The above figure states that an individual's values form the foundation of his or her ethics. Then these ethical beliefs directly impacts how an individual responds when presented with a certain situation and in his opinions are formed.
Given that values and ethics directly shape an individual's opinions, and since individuals, through the different accounting standard setting bodies such as the United States Financial Accounting Standards Board and the International Accounting Standards Board, are responsible in formulating accounting theories and principles, then it follows that these that individual opinions, values and ethics impact their construction.
This could explain the divergence of accounting theories from one country to another which was the subject several scholarly studies, that is, the identification of the ...

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