Positive Accounting Theory

1. Positive Accounting Theory http://acct0310.wordpress.com

2. PAT Concept Efficient Market Hypothesis (EMH) Agency Theory Normative Theory Positive Accounting Theory (PAT) Bonus Plan Hypothesis Debt Covenant Hypothesis Political Cost Hypothesis Accounting Standards and Practices

3. Positive Accounting Theory • ผู้ให้กำหนดและกำหนดทฤษฎี • Watts and Zimmerman in 1978 and 1986 • Apply to Positive Theory of Economic

4. Normative Theory • ระบุและกำหนด (Prescribe)มาตรฐานและวิธีการด้านบัญชีโดยการกำหนดจากผู้สร้างทฤษฎีบัญชี

5. Positive Accounting Theory • อธิบายและคาดกาล (Explain and Predict)มาตรฐานและวิธีการด้านบัญชีโดยการกำหนดจากผู้สังเกตการณ์

6. Agency Theory • The agent (like the principal) will be driven by self-interest, and therefore the principals will anticipate that the manager, unless restricted from doing otherwise, will undertake self-serving activities that could be detrimental to economic welfare of the principals.

7. Efficient Market Hypothesis (EMH) • The capital markets react in an efficient and unbiased manner to publicly available information.

8. Positive Accounting Theory • Assumptions: The accountants (and, in fact, all individuals) are primarily motivated by self-interest (tied to wealth maximisation), and that the particular accounting method selected (where alternative are available).

9. The Three Hypotheses • The Bonus Plan Hypothesis • The Debt Covenant Hypothesis • The Political Cost Hypothesis

10. The Bonus Plan Hypothesis • Bonus based on net income • To get more bonus, choosing accounting methods that increase current reported earnings

11. The Bonus Plan Hypothesis • All other things being equal, managers of firms with bonus plans are more likely to choose accounting procedures that shift reported earnings from future periods to the current period

12. The Bonus Plan Hypothesis • Because of the nature of of the accrual process, this will tend to lower future reported earnings and bonuses, other things equal. • PV of manager’s utility from future bonus stream will be increased by shifting earnings toward the present

13. The Bonus Plan Hypothesis การพิจารณาการบริหารและบุคคลากรภายในองค์กร

14. The Debt Covenant Hypothesis • All other things being equal, the closer a firm is to violation of accounting-based debt covenants, the more likely the firm manager is to select accounting procedures that shift reported earnings from future periods to the current period

15. The Debt Covenant Hypothesis • Violation of debt covenant is costly • Restriction on dividends • Limit additional borrowing • Issuance of stock, … • Increase current earnings  Assets increase To avoid violation

16. The Debt Covenant Hypothesis การพิจารณาเงื่อนไขการกู้ยืมของเจ้าหนี้

17. The Political Cost Hypothesis • All other things equal, the greater the political costs (taxes, regulations) faced by a firm, the more likely the manager is to choose accounting procedures that defer reported earnings from current to future periods

18. The Political Cost Hypothesis • Large firm with high profit attracts media, consumers, and politicians attention • Large firm trend to reduce profit reports

19. The Political Cost Hypothesis การพิจารณาปัจจัยภายนอก การเมือง สภาพแวดล้อม ผู้ถือหุ้น เป็นต้น

20. Theory Perspectives • Opportunistic Perspectives • มองดูผลประโยชน์ของแต่ละบุคคลที่เกี่ยวข้อง • Efficiency Perspectives • มองดูประสิทธิภาพของการทำงานและการใช้ข้อมูลขององค์กร

21. Criticisms • Not improving accounting pratices • Not value free • Not positive thinking for humankind • …

22. PAT Concept Efficient Market Hypothesis (EMH) Agency Theory Normative Theory Positive Accounting Theory (PAT) Bonus Plan Hypothesis Debt Covenant Hypothesis Political Cost Hypothesis Accounting Standards and Practices

23. แบบฝึกหัด • ให้วิเคราะห์ข่าว(เอกสารที่แจก) ในเชิง Positive Accounting Theory • Bonus Plan Hypothesis • Deb Covenant Hypothesis • Political Cost Hypothesis

24. สัปดาห์หน้า • ข้อสมมุติฐานทางบัญชี • แม่บททางการบัญชี