Positive Accounting Theory: A Ten Years Prespective

This paper reviews and critiques the positive accounting literature following publication of Watts and Zimmerman (1978, 1979). The 1978 paper helped generate the positive accounting literature which offers an explanation of accounting practice, suggests the importance of contracting costs, and has led to the discovery of some previously unkown empirical regularities. The 1979 paper produced a methodological debate that has not been very productive.

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