Accounting

Policy Setting Using Ex-Ante and Ex-Post Accounting Techniques

Firms make contracts every day because they are required to gain assets that would be costly for them to obtain otherwise. At one time these contracts were made from an opinion-based accounting model called normative theory. Many departments used this theory because they believed that they could use the knowledge that they had gained to make accurate guesses regarding financial and intangible accounting decisions. The problem with this is that it does not take into account actual empirical data that could be used more accurately to make accounting decisions that helped the firm grow for the long run. Because accounting researchers realized that these types of anecdotal theoretical stances did not actually work, they tried to determine a model that could more accurately predict a firm's accounting needs. The result of this investigation was positive accounting theory. Researchers found that firms...
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