Critically analyse the traditional assumptions of ‘accounting as economic reality’ and what is meant by accounting as a ‘partisan’* activity. Has there been a change to these assumptions/ perspectives? From previous question about the formation of the standard and the evolution, and it is fair to say that the existence of accounting is to promise economic reality. As the EMH (Efficient market hypothesis) how the capital market should react in an efficient and unbiased manner, “unbiased” that accounting signs of income and capital reflect in na factual manner. however critically speaking it is unreliable, the scandals from time to time share their similarity, it was once that people concerned about “false profit” not they concerned about
“managed earning”it is the same thing with different term. PAT (Positive accounting theory) managers select accounting methods which can increase current period reported income to result bonus, such a stance elaborate the brute reality. The agency is sneaky use market-based bonus schemes to encourage the manager to practice on earning fluctuate greatly. The conundrum of the assumption is that the true economic wealth cannot be defined, trough the accounting report all people can see is figure, an accounting sign. The conceptual framework appear so often is because it refer to a collection of concept that form the foundation for the financial statement, it is needed, as the system is within the rule-guided practice.however it is also not comprehensive enough to include on the brute social factor, and epistemologically to obtain the task.
In assessing whether or not the accounting activity is ‘partisan’, there is always a debate as to whether or not accounting should be able to without the need for government intervention. However with the 2008 financial crisis storm in, origin from America and result in the rest of the world, the government start as regulator step in, and did have a role to participate in structure the rules. Those has position in political ground often align their choice above the public interest, or the community. It remain unsure that partisan activity, pressure from the high level to the relevant regulation board could happen, cooperate giant will have a higher power to influence the balance of the outcome. China is the most standout example, as it is self-regulating which result the political influence serve to benefit certain parties. ‘highly partisan activity’ is not as biased as it sounds, there has present of record(Inside Job,2010) document the strong-arm example that been conduct under political pressure. those evident that represent even though with the present of

regulatory body, those live on top of the pyramid still gain quiet significant benefit indirectly from the connection they have with the ‘partisan’.
Base on the standard now, there are enhancement and development, the role of accounting is significant, which also emphasis that the importance of accounting profession, the discipline of accounting, the investigation and recognition of violation standard and those in grey area. The standard is still long way to perfect, and be a comprehensive, ontological principle. The accounting process need to be upright it plays an integrity role in enhancing society. It is

crucial concern for all accountants should be addressing from now on.