Chwastiak XXXXXXXXXXidentifies and critiques the underlying assumptions of positive accounting...

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Chwastiak XXXXXXXXXXidentifies and critiques the underlying assumptions of positive accounting theory, and suggests how accounting can be used in a more transformative capacity in our society.
Identify and discuss the arguments presented by Chwastiak XXXXXXXXXXin her critique of the assumptions of positive accounting theory, and in her vision for a more transformative role of accounting.

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Introduction 
The report aims to identify, study, and critically analyse the underlying assumptions of 
positive accounting theory as presented by Michele Chwastiak in the article, Deconstructing 
the principal-agent model: a view from the bottom, published in the journal Critical 
Perspectives on Accounting, 1999. Further, it goes on to present the vision of the author 
suggesting a more transformative role of accounting. 
Discussion 
The author is of the view that the key assumptions of this theory are objectivity, rationality, 
self-interest, game theory, the metaphysics of death and the human revolution. It is 
considered that accounting is an outcome and representation of transactions and events which 
can be objectively verified. It is assumed that these are not influenced by subjective biases 
but supported by objective evidence in the form of relevant financial documentation. 
However, it is critiqued on the grounds that the irreparable environmental damage caused by 
the corporations, the exploitation of labour and not recognising the contributions of single 
mothers are all factors which promote evilness in society and not objectivity in approach. The 
principal-agent model considers rationality and reasoning to be the principal reason guiding 
the actions of humans and managers. As Baiman, 1990 points out that such a consideration of 
rationality ignores the scope for trust and fairness to be considered as reasons for taking 
actions. Although, this assumption of rationality and reasoning lent a lot of credibility to 
being them as reasons for action; it is criticised on grounds that it ran the risk of inflating 
human ego with the belief that there was nothing beyond human power. It overlooked the fact 
that nature, and not man, is the master of the universe. Thirdly, it is explained that the agents, 
accountants and rather, all humans are guided by self-interest as the prime motive in all 
actions and also those relating to selection of various accounting methods and policies. But,

Chwastiak XXXXXXXXXXidentifies and critiques the underlying assumptions of positive accounting theory, and suggests how accounting can be used in a more transformative capacity in our society....

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