Nebraska Academy of Sciences


Date of this Version



Published in Transactions of the Nebraska Academy of Science, Volume 4 (1977).


Copyright 1977 by the Authors; used by permission of the NAS


Accounting scholars such as Chambers, Ijiri, Mattessich, Moonitz, and Sterling emphasize the central importance of fundamental propositions in accounting theory construction. Theory building in accounting has proceeded, however, without the insight provided by delineation of the respective natures and functions germane to different types of fundamental propositions. Accounting theorists have not gone far enough in identifying the unique roles of the various statements used as basic assumptions in theory construction. Accordingly, premises, axioms, and postulates are differentiated in harmony with philosophic substance. Premises are closely linked to systems of formal deductive logic and the inherent processes of valid inference. Axioms are used in theoretical systems to specify the formal aspects of theories. Taken together, axioms deime the formal structure or syntactical aspect and the formal interpretational rules or semantical aspect. Postulates explicate non-formal aspects or subjective dimensions of theoretical systems. They capture the essential imperatives or obligations of theory building in a specific field and are, thus, normative in nature. Ijiri's axiomatic accounting system is chosen as a vehicle to illustrate both the unique roles of axioms and postulates as well as the complementary nature of these two types of fundamental propositions in accounting theories. Ijiri's system contains three axioms which are patterned after Euclidean geometry in a manner similar to theoretical systems in natural sciences. Non-formal postulates are added to this axiomatic system and are shown to perform a different, but supporting function.