POSITIVE ACCOUNTING THEORY (РAT): OVERVIEW OF CONCEPTUAL PROVISIONS
DOI:
https://doi.org/10.31713/ve420201Keywords:
positive accounting theory, PAT, normative accounting theory, accounting research, accounting.Abstract
This paper reviews the positive accounting theory (PAT). The article reveals the basic provisions of the positive accounting theory. The philosophical objective of positive accounting theory is to explain and predict current accounting practice. Positive accounting theory seeks to understand why accounting practices are employed by accountants in different circumstances and by different firms. The three hypotheses of positive accounting theory were described: the bonus plan hypothesis, the debt covenant hypothesis, the political cost hypothesis. PAT emphasizes whether the accounting theory put forward in the accounting literature can explain the accounting practices carried out and predict the cause of the phenomenon that is happening now and its influence in the future.References
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