Assignment Question 2 (10 Marks, 1000 words) As Watts and Zimmerman (1986, p. 7) state, Positive Accounting Theory ‘is concerned with explaining [accounting] practice. Itis designed to explain and predict which firms will and which firms will not use a particular accounting method ... but it says nothing as to which method a firm should use’. Do you think that this represents an ‘abrogation’ of the academics’ duty to serve the community that supports them? General Instructions for assignment questions You should then respond to the statement by arguing a position. Do you agree or disagree, explaining why? You should give consideration to events in recent years that may have had an influence.

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