Conditional-normative accounting methodology: Incorporating value judgments and means-end relations of an applied science

Abstract The growing interest in ethical and other normative aspects of accounting promotes the search for an empirical-scientific methodology capable of handling normative issues. On the one side, traditional normative accounting theories have been rejected as unscientific, on the other side, “positive accounting theory” emphasizes the positive instead of the normative aspects of our discipline. Thus accounting possesses only a well-publicized positive methodology but no equally recognized normative counterpart (as has positive economics in normative economics, physics in engineering, biology in medicine, etc.). This expository paper attempts to fill the gap by outlining the methodological basis for a conditional-normative accounting theory which recognizes different information goals (norms) but enables the formulation of empirically confirmable relations between those goals and the means to achieve them. Such a theory is objective insofar as it 1. (i) discloses the underlying value judgments and 2. (ii) empirically tests whether the recommended means lead to the desired ends. The paper discusses past efforts and the present status of this methodology as well as future requirements. It not only draws attention to the relative neglect of policy analysis and purpose-oriented thinking, but shows the way to a synthesis of the normative and the positive approach to accounting.