1-MEANING Positive accounting theory is defined as a hypothesis that seek to undertake an outstanding prognosis regarding investors or managers decision on accounting policies and practices

1-MEANING Positive accounting theory is defined as a hypothesis that seek to undertake an outstanding prognosis regarding investors or managers decision on accounting policies and practices. Positive accounting theory is that section of accounting which makes the research by using scientific methods. Positive accounting theory also known as PAT discover its groundwork foundations with Efficient Market Hypothesis.
Investors in capital market use proper accounting information and PAT has proven to be the best approach to be used for better understanding of accounting practices.
HISTORY- The theory of PAT has been greatly publicized by Watts and Zimmerman and this was basically the add-on of past exploration which was accomplished right off the bat by Fama and latter by Ball and Brown in 1960s.