ACCOUNTING THEORY Essay Example | Topics and Well Written Essays - 2000 words

account THEORY - Essay ExampleAmong these are the ground concepts that may be employ in the conceptualization of write up theories among other aspects of score theories. Some contend that in the beginning many primitive societies, those that were in existent in the earliest days, upriseed the art of counting before developing the art of identification (Brown, 2006, 3). These primitive forms of accounting for the number of items provide the basis by which early societies may be state to have been practicing accounting. Such groups are likes of the Egyptian with the need to account for grain harvested and stored. Examples of other such systems may be found in other early civilizations such as the Greeks and the Tibetans. Over time these systems of accounting for various items moved into the business world. This was in earlier European and Asian countries that mostly parcelicipated in mess with one another(prenominal) and within their countries. One will find evidence of the di fferences in practices among the various countries to depict differentiation in as furthermost as the earlier practice of accounting is concerned. There is in like manner need to mention the contribution of the likes of Luca Pacioli who made contributions to the earlier forms of accounting (Riahi-Belkaoui, 2005, 3). He is credited with developing the bivalent entry system of bookkeeping that is still widely taught and practiced in accounting spheres to date. It is though that everywhere time this Italian system of accounting was adopted in most parts of the world. In the joined States various forms of accounting methodologies were also being applied. These methods may not have been allowed for uniformity, due to the differences in the central guidelines. These theories were to be streamlined with the development of bodies such as the SEC which became the ultimate authority as far as providing guidance on accounting related matters (Previtis, Walton & Wolnizer, 2011, 121). Acco unting theory development The development of accounting theory on the other hand may be said to have progressed with the developments that were being experient in the accounting field. Their development was also being fueled by the changes that were occurring in corporate world. A good example may be the case with the development of the railway that led to the growth of the declension market for the purposes of raising needed financing. This growth in a whole industry catapulted the need to develop theories to be used in corporate financing deals (Schroeder, Clark & Cathey, 2011, 4). The current environment The recent financial crisis affected the world in a way that most did not see coming. This crisis also exposed a lot of the misdeeds that have been happening in the financial world. The effect is that there has been an increase in the trouble that is being paid to these sectors of the economy. Accountants and the accounting theories that they choose to use are being placed un der greater scrutiny by various bodies. This is in a bid to try and prevent the recurrence of another crisis. The major concern being caused by the derivatives that have come to play a major part in corporate entities and that may have carried some blame when it comes to the causal effect of the crisis. Accounting for these derivatives requires supernumerary accounting regulations as compared to other marketable securities (Stickney, 2010, 579). Accounting theory definition Before an in enlightenment analysis and look at the various theories and how they affect the accounting world, one needs to be witting of the definition or the basic characteristics of an accounting theory. Dictionaries place the definition as, well organized knowledge that flowerpot be applied in a wide variety of situations. These are principles and assumptions that can be used to predict how a given