ACCOUNTING THEORIES AND THEIR INFLUENCE ON THE EVOLUTION OF ACCOUNTING RESEARCH

Abstract

This research purpose is to examine how accounting theories specifically, normative and positive

theories have shaped and evolved accounting research over time. Specifically in the areas of financial

reporting, standard-setting, sustainability, and digital innovation, due to the increasing needs of users

for accountability, dependability, and relevance that have challenged the theoretical foundations of

accounting. The existing accounting literature documents that the basis for ethical reporting guidelines

and standard-setting, especially with regards to what information needs to be disclosed in the public

interest, was laid down by normative accounting theory. Alternatively, positive accounting theory has

provided another insight where management routines, routinized accounting procedures, and

regulatory responses to financial and institutional restrictions.

Apart from influencing the historic development of accounting research, this study critically reviews

how these two prevailing theories have evolved to confront emerging innovations such as blockchain

led assurance systems, algorithmic disclosure, and combined sustainability reporting. The study

1highlights the Normative and Positive theories' continued relevance and persistence as pillars for

knowledge of and theory building in accounting scholarship in the face of technology disruption and

altering stakeholder needs by blending theory innovation with concerns of today