(Not sure about that) this is a critical project report from the Essay

(Not sure about that) this is a critical end report from the module of issues in accounting research, - Essay ExampleA critical review of its suffice is thus relevant even now. Watts and Zimmermann The impact of Watts and Zimmermanns paper is immense A Google Scholar search finds 1035 citations of it, and Watts (1990) decade year retrospective article has 3041 Published in The Accounting Review, a major journal, the paper non only introduced positive accounting as a concept but began to focus on the post of regulatory boards and politics. The papers primary research question is simple Why would firms spend valuable assets resisting accounting standards (Watts and Zimmermann, 1978, 131)? Empirically, they had make so numerous times. A superficial analysis might point to corruption or to severe to protect against malfeasance, but Watts and Zimmermanns research indicates that there is a more complex structural reason. Their research indicated several(prenominal) trends 1. Larger c ompanies, ceterus paribus, will support less complex accounting measures like General Price level Accounting more often than smaller companies This is theoretically supported by the notion that a bombastic company would be more likely to be a target of government interference or auditing and thus has more of a stake, proportional to their size. Firm size is the largest factor in their analysis. 2. Direction of veer in earning is vital Companies that be earning less than in previous years and thus experiencing negative harvest-home or at risk of reporting losses unsurprisingly resist accounting changes that might a) further depress their damages by requiring more administrative overhead and paperwork and b) might require more complex reporting of the firms difficulties. The paper also pointed to complex government-economic interaction forces. Even the mere effect of requiring different accounting standards could switch multiple impacts on firm behavior. Investment-production decisions could end up changing as firms accounting overhead increases, with firms pick out either less costly or less risky investments to shield them from the risk (Watts and Zimmermann, 1978, 131). This would be indicated by a lower beta on common stock, which was entrap in those firms supporting GPLA. They also found that there was a decline in systematic risk as firm size increases and as government intervention costs rise. The benefits of improved accounting might be eclipsed by the cost for big and larger companies. This in turn begs a question Might larger firms have larger accounting overhead in general due to the number and complexity of their transactions? There are implications for policy as well, both for NGO accounting standards boards like the FASB and for national and provincial governmental ruler like the SEC. Corporate lobbying has historically had a major freezing effect on actions taken by regulators, including the SEC arguably having chosen the AICPA as thei r scapegoat so as to avoid the difficult projection of crafting regulatory standards themselves (Watts and Zimmermann, 1978, 132). To avoid resisting corporate lobbying, regulators may wish to choose accounting standards that improve firms fidelity of pecuniary information without incurring substantial overhead. Of course, in light of recent events in the global