Theory and Policy Making in Accounting

Theory and Policy Making in Accounting

Accounting theory is closely related to the preparation of accounting policy. The theory with the political and economic conditions and the system will determine policy. In the preparation of the accounting policy which will serve as the basis for accounting or engineering practices are influenced by many factors including:

1. accounting theory

2. political factors

3. economic conditions

Accounting theory formulation would be useful if the theory can be used as a tool to predict what would be expected might happen in the future. If so, should every country should have its own accounting theory and formulate the conclusion of the condition and its social economic phenomenon, not mengambila over completely from the arrangement other countries accounting theory.

Hadibroto (Media Accounting 1988) emphasizes the importance of accounting theory. According to him there is a growing indication that accounting theory assumes that seemed unnecessary. Reasons underlying this thinking is the danger of not accounting is a discipline that explains all the symptoms in the practice of accounting. Accounting technical and procedural. This view is mistaken, accounting theory may provide an explanation of the practice of accounting, answering and explaining all the phenomena underlying the application of a method in accounting practices.

Hendriksen assessing the accounting theory as a general principle of arrangement will be able to:

1. Provide a common frame of reference from which accounting practices assessed

2. Accounting theory formulated will not be able to follow the development of the economy, sisial, technology, and science are so fast.