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Positive Accounting Theory, Agency Costs And Accountng Regulation

Author

Listed:
  • Jagriti Srivastava

    (Indian Institute of Management Kozhikode)

  • Pankaj Kumar Baag

    (Indian Institute of Management Kozhikode)

Abstract

Positive Accounting Theory (PAT) is related to dealing with such matters such as possibility regarding the choice of accounting policies by firms and in which manner the firms will react to prospective new accounting standards. In relation to this, the existing agency theory breaks down as a positive theory as it does not cater for theory of accounting regulatory development. It stems from its dependence on the rationality assumption of the investor. We need to develop affluent theories based on either better rationality assumption or which considers broader view of organisational behaviour.

Suggested Citation

  • Jagriti Srivastava & Pankaj Kumar Baag, 2019. "Positive Accounting Theory, Agency Costs And Accountng Regulation," Working papers 346, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:346
    as

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    References listed on IDEAS

    as
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    5. Jensen, Michael C. & Meckling, William H., 2008. "Theory of the firm: managerial behavior, agency costs and ownership structure," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 48(2), April.
    6. Tinker, Anthony M. & Merino, Barbara D. & Neimark, Marilyn Dale, 1982. "The normative origins of positive theories: Ideology and accounting thought," Accounting, Organizations and Society, Elsevier, vol. 7(2), pages 167-200, April.
    7. Richard A. Posner, 1974. "Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 335-358, Autumn.
    8. Ben S. Bernanke & Mark Gertler, 1986. "Agency Costs, Collateral, and Business Fluctuations," NBER Working Papers 2015, National Bureau of Economic Research, Inc.
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