Accounting Theory Essays

Accounting Theory Essays Accounting Theory Essay Accounting Theory Essay Accounting Theory Construction The function to study accounting theories is to classify them according to the assumptions they rely on, how they were formulated, and their approaches to explaining and predicting actual events. There are some classification which are pragmatic, syntactic, semantic, normative, positive, and naturalistic approaches. Pragmatic approaches are based on observing the behavior of accountants or those who use the information generated by accountant. Syntactic approaches rely on logical argument, based on a set of premises. Semantic approaches concern how theories correspond to real-world events. Normative theories rely on both semantic and syntactic approaches. Positive approaches test hypotheses against actual event . Positive approaches test hypotheses against actual and the last is Naturalistic approaches consider individual cases and do not try to generalise. PRAGMATIC THEORIES Descriptive Pragmatic Approach Descriptive pragmatic approach based on continual observation of the behavior of accountants, a theory can be developed from observations of how accountants act in certain situations. The theory can be tested by observing whether accountant do act in the way the theory suggest. This approach is probably the oldest and most universally used method of accounting theory construction. Criticisms of descriptive pragmatic approach: * does not consider the quality of an accountant’s action * does not provide for accounting practices to be challenged * focuses on accountants’ behaviour not on measuring the attributes of the firm Psychological Pragmatic Approach Differetnt with Descriptive pragmatic approach, this approach require theorist to observe users responses to the accountants output ( ex:financial report). There are also some problem with this psychological approach that are : * some users may react in an illogical manner * some users might have a preconditioned response * some users may not react when they should SYNTATIC AND SEMANTIC THEORIES Semantic inputs of the system are the transactions and exchanges recorded in the vouchers, journals, and ledgers of the business. These are then manipulated on basis of the premises and assumptions of historical cost accounting. Some accounting theorists are critical, they argue that the theory has semantic content only on the basis of its inputs. There is no independent empirical operation to verify the calculated outputs for examples, ‘profit’ or ‘total asset’. Historical cost accounting has also been criticised on the basis of its syntactic element, for example with respect to the practice of summing several different money amounts assigned to specific assets In defence of the historical cost system, accountants argue that there is no requirement that accounting outputs should have any semantic content or be subject to falsification rules. NORMATIVE THEORIES The 1950s and 1960s saw what has been described as the ‘golden age’ of normative accounting research. Accounting researches become more concerned with policy recommendation and with what should be done, rather than with analysing and explaining the currently accepted practice. Normative theories concentrated either on deriving the ‘true income’ for an accounting period. True income : true income theorists concentrated on deriving a single measure for assets and a unique profit figure. Decision usefulness ; the decision usefulness approach assumes that the basic objective of accounting is to aid the decision making process of certain ‘users’ of accounting reports by providing useful, or relevant, accounting data. The normative theories of the 1950s and 1960s began with a statement of the domain (scope) and objectives of accounting, the assumptions underlying the system and definitions of all the key concepts. POSITIVE THEORIES During the 1970s, accounting theory saw a move back to empirical methodology, which is often referred to as positive methodology. Positivism or empiricism means testing or relating accounting hypotheses or theories back to experiences or facts of the real world. The main different between normative and positive theories is that normative theories are prescriptive, whereas positive theories are descriptive, explanatory or predictive. DIFFERENT PERSPECTIVES Focused on what may be considered to be a highly structured approach to theory formulation – the scientific approach. This approach has an inherent assumption that the world to be researched is an objectives reality capable of examination in terms of large scale or average statistics. This type of research is carried out by incremental hypotheses which are then combined to provide greater understanding, or better predictions of accounting. The implied assumption is that a good theory holds under circumstances that are constant across firms, industries and time. The criticism of the scientific method are the large-scale statistical research tends to lump everything together and it is conducted in environments that are often remote from the world of or the concerns of accountants. SCIENTIFIC APPROACH APPLIED TO ACCOUNTING A great deal of misunderstanding exists about the attempt to apply a scientific approach to accounting. The attempt is to make scientists out of accounting practitioners. Accountants who believe in a scientific approach want empirical evidence and logical explanation to support accounting practices so that practitioners can recommend the most appropriate methods for given situation based on this evidence. Another common misunderstanding about the application of the scientific view in accounting is that ‘absolute truth’ is desired, which of course is not possible. ISSUES FOR AUDITING THEORY CONSTRUCTION Auditing is a verification process that is applied to the accounting inputs and processes. Auditor provide an opinion on whether the financial statements are in accordance with the applicable reporting framework, and also provide on whether the statements present fairly, in all material respects, or give a true and fair view. The normative era of accounting theory and research also coincided with a normative approach to auditing theory. The positive ere of accounting has led to a positive approach to auditing theory

Lockheed P-38 Lightning in World War II

Lockheed P-38 Lightning in World War II Designed by Lockheed in 1937, the P-38 Lightning was the companys attempt to meet the requirements of the US Army Air Corps Circular Proposal X-608 which called for a twin-engine, high-altitude interceptor. Authored by First Lieutenants Benjamin S. Kelsey and Gordon P. Saville, the term interceptor was specifically used in the specification to bypass USAAC restrictions regarding armament weight and number of engines. The two also issued a specification for a single-engine interceptor, Circular Proposal X-609, which would ultimately produce the Bell P-39 Airacobra.   Design Calling for an aircraft capable of 360 mph and reaching 20,000 ft. within six minutes, X-608 presented a variety of challenges for Lockheed designers Hall Hibbard and Kelly Johnson. Assessing a variety of twin-engine planforms, the two men finally opted for a radical design that was unlike any previous fighter. This saw the engines and turbo-superchargers placed in twin tail booms while the cockpit and armament were located in a central nacelle. The central nacelle was connected to the tail booms by the aircrafts wings.   Powered by a pair of 12-cylinder Allison V-1710 engines, the new aircraft was the first fighter capable of exceeding 400 mph. To eliminate the issue of engine torque, the design employed counter-rotating propellers. Other features included a bubble canopy for superior pilot vision and the use of a tricycle undercarriage. Hibbard and Johnsons design was also one of the first American fighters to extensively utilize flush-riveted aluminum skin panels. Unlike other American fighters, the new design saw the aircrafts armament clustered in the nose rather than mounted in the wings. This configuration increased the effective range of the aircrafts weapons as they did not need to be set for a specific convergence point as was necessary with wing-mounted guns. Initial mockups called for an armament consisting of two .50-cal. Browning M2 machine guns, two .30-cal. Browning machine guns, and a  T1 Army Ordnance 23  mm autocannon. Additional testing and refinement led to a final armament of four .50-cal. M2s and a 20mm Hispano autocannon.       Development Designated the Model 22, Lockheed won the USAACs competition on June 23, 1937. Moving forward, Lockheed commenced building the first prototype in July 1938. Dubbed the XP-38, it flew for the first time on January 27, 1939 with Kelsey at the controls. The aircraft soon achieved fame when it set a new cross-continent speed record the following month after flying from California to New York in seven hours and two minutes. Based on the results of this flight, the USAAC ordered 13 aircraft for further testing on April 27. Production of these fell behind due to the expansion of Lockheeds facilities and the first aircraft was not delivered until September 17, 1940. That same month, the USAAC placed an initial order for 66 P-38s. The YP-38s were heavily redesigned to facilitate mass production and were substantially lighter than the prototype. Additionally, to enhance stability as a gun platform, the aircrafts propeller rotation was changed to have the blades spin outward from the cockpit rather inward as on the XP-38. As testing progressed, problems with compressibility stalls were noticed when the aircraft entered steep dives at high speed. Engineers at Lockheed worked on several solutions, however it was not until 1943 that this problem was completely resolved. Specifications (P-38L): General Length: 37 ft. 10 in.Wingspan: 52 ft.Height: 9 ft. 10 in.Wing Area: 327.5 sq. ft.Empty Weight: 12,780 lbs.Loaded Weight: 17,500 lbs.Crew: 1 Performance Power Plant: 2 x Allison V-1710-111/113 liquid-cooled turbo-supercharged V-12, 1,725 hpRange: 1,300 miles (combat)Max Speed: 443 mphCeiling: 44,000 ft. Armament Guns: 1 x Hispano M2(C) 20 mm cannon, 4 x Colt-Browning MG53-2 0.50 in. machine gunsBombs/Rockets: 10 x 5 in. High Velocity Aircraft Rocket OR 4 x M10 three-tube 4.5 in OR up to 4,000 lbs. in bombs Operational History: With World War II raging in Europe, Lockheed received an order for 667 P-38s from Britain and France in early 1940. The entirety of the order was assumed by the British following Frances defeat in May. Designating the aircraft the Lightning I, the British name took hold and became common usage among Allied forces. The P-38 entered service in 1941, with the US 1st Fighter Group. With the US entry into the war, P-38s were deployed to the West Coast to defend against an anticipated Japanese attack. The first to see frontline duty were F-4 photo reconnaissance aircraft which operated from Australia in April 1942. The next month, P-38s were sent to the Aleutian Islands where the aircrafts long range made it ideal for dealing with Japanese activities in the area. On August 9, the P-38 scored its first kills of the war when the 343rd Fighter Group downed a pair of Japanese Kawanishi H6K flying boats. Through the middle of 1942, the majority of P-38 squadrons were sent to Britain as part of the Operation Bolero. Others were sent to North Africa, where they aided the Allies in gaining control of skies over the Mediterranean. Recognizing the aircraft as a formidable opponent, the Germans named the P-38 the Fork-Tailed Devil. Back in Britain, the P-38 was again utilized for its long range and it saw extensive service as a bomber escort. Despite a good combat record, the P-38 was plagued with engine issues largely due to the lower quality of European fuels. While this was resolved with the introduction of the P-38J, many fighter groups were transitioned to the new P-51 Mustang by late 1944. In the Pacific, the P-38 saw extensive service for the duration of the war and downed more Japanese aircraft than any other US Army Air Forces fighter. Though not as maneuverable as the Japanese A6M Zero, the P-38s power and speed allowed it to fight on its own terms. The aircraft also benefited from having its armament mounted in the nose as it meant that P-38 pilots could engage targets at a longer range, sometimes avoiding the need to close with Japanese aircraft. Noted US ace Major Dick Bong frequently chose to down enemy planes in this fashion, relying on the longer range of his weapons. On April 18, 1943, the aircraft flew one of its most famous missions when 16 P-38Gs were dispatched from Guadalcanal to intercept a transport carrying the Commander-in-Chief of the Japanese Combined Fleet, Admiral Isoroku Yamamoto, near Bougainville. Skimming the waves to avoid detection, the P-38s succeeded in downing the admirals plane as well as three others. By the end of the war, the P-38 had downed over 1,800 Japanese aircraft, with over 100 pilots becoming aces in the process. Variants During the course of the conflict, the P-38 received a variety of updates and upgrades. The initial model to enter production, the P-38E consisted of 210 aircraft and was the first combat ready variant. Later versions of the aircraft, the P-38J and P-38L were the most widely produced at 2,970 and 3,810 aircraft respectively. Enhancements to the aircraft included improved electrical and cooling systems as well as the fitting of pylons for launching  high velocity aircraft rockets. In addition to a variety of photo reconnaissance F-4 models, Lockheed also produced a night fighter version of the Lightning dubbed the P-38M. This featured an  AN/APS-6 radar pod and a second seat in the cockpit for a radar operator.    Postwar: With the US Air Force moving into the jet age after the war, many P-38s were sold to foreign air forces. Among the nations to purchase surplus P-38s were Italy, Honduras, and China. The aircraft was also made available to the general public for the price of $1,200. In civilian life, the P-38 became a popular aircraft with air racers and stunt fliers, while the photo variants were put into use by mapping and survey companies.