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Literature review
The application of measurement theory to accounting is not a new idea. Vickrey (1970), noticing the lack of a measurement theory in accounting, questioned the status of accounting as a measurement discipline. He applied the realist’s theory of measurement to evaluate whether accounting was in fact a measurement discipline. The realist’s theory of measurement advocates that measurements should reflect the empirical properties of the object they are representing (Michell, 1995). This means that measurements should reflect the intrinsic properties of the object being measured. Vickrey (1970) came to the conclusion that accounting is not a measurement discipline and that there is no property that is currently measured in accounting apart from the numerosity of monetary units. This suggests that there is no theory of measurement in the accounting discipline apart from a theory that describes the measurement of monetary units.
Hypothesis
It has been noted earlier (e.g., AICPA, 1941; Bierman, 1963; IASB, 2006; Kirk, 2005) that current accounting literature contends that accounting is a measurement discipline. It follows, then, that the concept of accounting measurement would exhibit the properties of a true measurement discipline in its category. On the other hand, there is also consensus (e.g. Gilman, 1939; Ijiri, 1975, 1967; Littleton, 1953; Staubus, 2004, 1985), from the observation of accounting measurement practices that the discipline of accounting has not succeeded in creating a theory of accounting measurement. Yet, every process of measurement must have a theory of measurement (Ryan et al., 2002).
Research Methodology – The principles of the representational theory of measurement
This chapter outlines part of the research methodology that is used in this study. The other part (questionnaire survey) of the research methodology is outlined in chapter 11. The principles of the representational theory of measurement are outlined and discussed in this chapter. These principles will be compared to theaccounting concept of measurement in order to determine whether this concept is in harmony with the principles of the representational theory of measurement.
Representational measurement and the goals of accounting
In chapter 3 the author discusses whether the goals of financial reporting are in harmony with the principles of the representational theory of measurement. The concept of measurement presupposes the achievement of a goal. Measurement theory points out that this goal must be achieved to be in harmony with the principles of measurement, and for measurement to have any significance.
The concept of a scale in accounting measurement
This chapter introduces the concept of the scale to the study. This concept is fundamental to all measurement disciplines. A discussion that evaluates whether the concept of a scale is properly applied to the accounting discipline is included.
Representational measurement under the going concern assumption
All measurements occur at a particular point in time regardless of what has happened before or what will happen afterwards. Yet the accounting concept of measurement asserts that the magnitudes of accounting measurements under the going concern concept are dependent on subsequent events. This chapter questions the possibility of having representational measurements whose magnitudes are dependent on future events.
Measuring the values of accounting phenomena: an empirical challenge
comprises a discussion of whether value is measurable under the representational theory of measurement. It also questions whether the amount of monetary units paid to acquire a commodity is a measure of the value of a commodity.
Objectivity and the accounting concept of measurement
All measurements are intended to be objective. This means that accounting measurements are also expected to be objective. The focus in this chapter is on evaluating whether accounting practices can be considered objective under the representational theory of measurement.
CHAPTER 1: Background and the research problem
1.2 Literature review
1.3 Problem statement
1.4 Motivation
1.5 Beneficiaries of this research
1.6 Hypothesis
1.7 Purpose of the study
1.8 Research Methodology
1.8.1 Research methods and techniques
1.8.2 Literature survey
1.8.3 The identification of the principles of measurement
CHAPTER 2: Research methodology- The principles of the representational theory of measurement
2.2 Research Methods
2.2.1 Analysis of the trends in current and previous research into accounting measurement
2.2.2 Normative research
2.2.3 Perspectives of research methodology 2.2.4 Research Strategy
2.2.5 Exploratory research
2.2.6 Literature survey
2.2.7 Empirical research
Chapter 3: Representational measurement and the goals of accounting
3.2 The role of measurement in the preparation of the financial statements
3.3 Accounting implications of measurement
3.4 Representational measurement and the objectives of financial statements
3.5 Summary and Conclusions
CHAPTER 4: The concept of a scale in accounting measurement
4.2 The concept of a representational scale
4.3 The significance of the concept of a representational scale in accounting
4.4 The application of the concept of the nominal scale in accounting
4.5 The application of the concept of the ordinal scale in accounting
4.6 The application of the concept of the interval scale in accounting
CHAPTER 5: Representational measurement and the going concern assumption
5.2 The going concern postulate and representational measurement
5. 3 Representational measurement and the flowing accounting events
5.4 Measurement and the problem of futurity in accounting
5.5 The concept of time in accounting
5.6 Representational measurement and the accounting entity
CHAPTER 6: Measuring the values of accounting phenomena: An empirical challenge
6.2 Applying the representational theory of measurement to the concept of value: The ambiguous nature of value
6.3 The credibility of monetary units as measures of value
6.4 Measurements versus indicants
6.5 The bases of accounting measurement
6.5.1 Elements, attributes and the bases of accounting measurement
6.5.2 The historical cost basis of accounting measurement
CHAPTER 7: Objectivity and the accounting concept of measurement
7.2 The role of perception in the concept of measurement in accounting
7.3 The objectivity of cost and value in accounting
CHAPTER 8: Representational measurement and the concept of relativism in accounting
8.2 Framing and representational measurement in accounting
8.3 The concept of relativism in accounting measurement
8.4 Sources of relativism in accounting
8.4.1 Representational measurement and cognitive relativism in accounting
8.4.2 Representational measurement and cultural relativism in accounting
