Accounting Theory (FAC416/ACCT441)

the basic assumptions, definitions, principles, and concepts -and how we derive them—that underlie accounting rule making by a legislative body—and the reporting of accounting and financial information.

Accounting theory is dynamic, not static—it is never a final and finished product pragmatic sense—it is concerned with improving financial accounting and reporting broad perspective.

it includes a conceptual framework, accounting legislation, concepts, valuation models, and hypotheses and theories that allow researchers to analyze accounting in order to explain or predict phenomena related to accounting, such as how users employaccounting data or how preparers choose among accounting methods closely link to the process of measurement—the assignment of numbers to properties or characteristics of objects developed and refined by the process of accounting research.