THEORY VS. PRACTICE
A.C. Littleton:

A. C. Littleton pictureLittleton picture

 "It is the nature of the word theory to imply complexity. The word cannot be well understood from definitions because, since definitions must be brief, they must fail to be comprehensive. The nature of the theory is revealed in part by its relation to practice, particularly by differentiation of theory from practice."

Practice is fact and action

Theory is explanation and reason
  • Theory's existence is justified by the help it can render to clear thinking in accounting.
  • Business of accounting theory is to examine beliefs and customs critically, to clarify and extend the best from experience, and to direct attention to the genesis and outcome of accounting work.

A Statement of Basic Accounting Theory (ASOBAT)
"The committee has conceived of theory as a coherent set of concepts explaining and guiding the accountant's action in identifying, measuring and communicating economic information."
William A. Paton:

William A. Paton pictureWilliam A. Paton picture

"Theory should guide and evaluate practice--examine assumptions"
George O. May:

George O. May pictureGeorge O. May picture

"What is sound in theory and what is sound in practice must ultimately be reconciled."

 
Seymour Walton: "Practice is theory made effective"

"Theory that has no contact with practice may be ineffective, useless, speculative; and practice that has no orientation within the structure of theory may become haphazard , purely expedient, and biased."

 
John Dewey:
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 There is no inherent opposition between theory and practice; the former (theory) enlarges, releases, and gives significance to the latter (practice), while practice supplies theory with its materials and with the test and check which keeps it sincere and vital.

 
DR Scott:
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 "Theory is a sort of distilled essence of practical experience. It is a guide to practice only in the sense that it reconciles practice with itself and so helps to integrate concrete social processes."

Scott argued that accounting theory was not a progression toward a static ideal but rather a process of continually adapting to an evolving environment.
  • Scientific theory...is a set of abstract propositions designed to interpret and explain observable phenomena. It follows that accounting theory is such a set of propositions use to interpret and explain accounting behavior, including the formulation of hypotheses and the deduction of predictions from hypotheses.
Michael J. Brennan, Theory of Economic Statics
A theory, like anything else, should be judged by what it is designed to do. Some theories are used to interpret and predict certain events, they ought rightly to be evaluated by their ability to interpret and predict these events.

A pseudo problem that often arises is that of theory versus practice. Who has not heard the accusation "it works in theory, but not in practice."? This is a nonsense statement. What works in theory, by definition works in practice. It is hard to see what practice means if not concrete factual or practical situations. Certainly, there are poor theories. These do not work; they cannot be successfully applied; they do not do what they intend, namely, to explain the behavior of certain phenomena. But a good theory will work in practice, for this is one of the things that makes it a good theory; i.e., it will explain what it is designed to explain. The existence of poor theories is no justification for a bias against all theory as somehow defective.
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