A Theoretical and Empirical Study through Positive Accounting Theory and Institutional Theory

Abstract

This paper is devoted to the theoretical and empirical study seeking to explain the choice of accounting strategies made by the Algerian companies in the framework of positive accounting theory (Watts and Zimmerman, 1978) and the institutional theory (DiMaggio and Powell, 1983). The empirical analysis, using multinomial logistic regression with some specification tests as Wald Test and Ramsey RESET Test, of 50 public and private Algerian companies on the data for year 2010, suggests that accounting strategy is determined by the company’ size, the system of managers’ compensation and legal status.