On the history of normative accounting theory: paradigm lost, paradigm regained?

Abstract

After a short introduction, the paper begins with an examination of early German normative accounting theories, and shows that the more recent ‘British Normative School’ too has a deliberate ethical bias. To contrast these two schools with other normative theories, a distinction between ethical-normative vs. pragmatic-normative vs. conditional-normative accounting theories (with complementary discussion) is introduced. Furthermore, the criticism of normative accounting theories (as being allegedly unsuitable as a scientific basis for an empirical discipline) by positive accounting theories is put into perspective. It is shown that for several decades a conditional-normative framework has been available that would allow factually determined means-end hypotheses to be incorporated into normative theories that conform to the empirical criteria of an applied science.