The Determinants of the choice of different accounting methods by companies quoted on the Dar es Salaam stock exchange: Positive accounting theory approach.
| dc.contributor.advisor | Dr. Nelson Waweru | |
| dc.contributor.author | Ntui, Ponsian Prot | |
| dc.date.accessioned | 2011-06-23T10:06:32Z | |
| dc.date.available | 2011-06-23T10:06:32Z | |
| dc.date.issued | 2010 | |
| dc.description | Partial fulfillment for award of the degree of Master of Commerce. | en_US |
| dc.description.abstract | This study examines the factors that determine the choice of multiple accounting methods (policies) in Tanzania. The study investigates managers’ decisions to choose accounting methods in a positive accounting theory perspective using panel data on 15 companies listed on the Dar es Salaarn Stock Exchange (DSE) from 2005 to 2008. Data (accounting numbers and accounting policies) were extracted from the companies’ annual reports. Possible determinants of the choice of accounting methods are identified based on the positive accounting theory, including firm size, leverage, effective tax rate, bonus plan, internal financing, corporate governance, bank loans, ownership dilution and labour force. Using regression analysis, the empirical results show that the significant factors are company size, internal financing, corporate governance and labour force. Contrary to the outcome of prior studies, the study finds that company size and internal financing are positively related with income strategy. The study proves statistically that there is a strong association between choice of accounting methods and income strategy. This study makes several contributions to the body of knowledge. First, in the 1’anzanian context, it delennines the factors which affect choice of accounting methods. Second, 16 potential factors are identified from dilTerent studies and 9 tested in one country (Tanzania). Third. the study identifies corporate governance as a new factor impinging on the choice of accounting policies. Fourth, this study shows for the first time that the use of RATIO of income increasing accounting policies to total number of accounting policies can be used as dependent variable. Finally, the study proves statistically the existence of an association between choice of accounting methods and income strategy in Tanzania. The research concludes that there are behavioural differences between managers of developed countries and their counterparts in Tanzania as a developing nation. Economic, social and political differences affect managers’ behaviour in making decisions. Although there are differences between developed and developing countries such as Tanzania, the research finds specific areas of diversion in the choice of accounting methods as company size, bonus plan and internal financing. Future researchers should use cross-sectional data, test foreign political costs, managers’ discretion, audit committee and industry. They should use natural logarithm of total sales as a measure instead of natural logarithm of total assets. Further, they need to investigate relevance of options in choosing accounting policies. | en_US |
| dc.identifier.citation | HF5625.N78 2010 | en_US |
| dc.identifier.uri | http://hdl.handle.net/11071/1464 | |
| dc.language.iso | en | en_US |
| dc.publisher | Strathmore University | en_US |
| dc.subject | Positive Accounting Theory | en_US |
| dc.subject | Corporate Accounting | en_US |
| dc.title | The Determinants of the choice of different accounting methods by companies quoted on the Dar es Salaam stock exchange: Positive accounting theory approach. | en_US |
| dc.type | Thesis | en_US |