McGee's Accounting Theory

McGee's Accounting Theory explores how accounting practices develop and are justified over time, emphasizing the importance of clarity, consistency, and usefulness for users of financial information. It recognizes that accounting is both a technical and social activity, influenced by regulations, professional standards, and economic environments. The theory promotes understanding the purpose of financial reports—such as aiding investment decisions—and adapts as business practices and technologies evolve. Essentially, it provides a framework for explaining why certain accounting methods are adopted, ensuring they serve the needs of stakeholders and reflect economic realities accurately.