Part A (1000 words) (50 marks)

Part A (1000 words) 

Watts and Zimmerman’s ‘The Demand and Supply of Accounting Theories: The Market for Excuses’ suggested the ‘normative’ project of accounting academics and other social critics of corporate accounting practice to be invalid; that there are no objective grounds in accounting theory for judging accounting practice as ‘good’ or ‘bad’; all such judgements are mere excuses or apologies for advancing the interests of particular social constituencies, couched in a language of academic impartiality and objectivity.

Tony Tinker [Policing Accounting Knowledge: the market for excuses affair] has suggested that the positive accounting theory proposed by Watts and Zimmerman is being replaced by a new paradigm: one that emphasises usefulness, vocational training and practical application.

Contrast ‘normative’ theories with ‘positive accounting’ theory. Have we moved to a new paradigm and if so what is it.

Part B (1000) 

Consider the concept of historic cost and discuss the following questions

q      The historical cost model and its application

q      The reasons for the dominance of the historical cost model, and the arguments against the model

q      Historical cost valuation issues, and the equity perspective adopted

q      Criticisms of historical cost accounting.

Mind Map

Part A (50marks)

Assessment criteria

Part B (50marks)

Assessment criteria