The article briefly reviews the purpose, methodological assumptions and main conclusions of the so-called "positive accounting theory" based on the work of the Rochester School of Accounting. Content, ISSN: 2581-821X. Legitimacy theory and environmental accounting. Reports and practices: a review. Olubunmi Adewole Ogunode a. a Department of Accounting, Faculty of Management Sciences, Babcock. This article examines the development of PAT positive accounting theory and compares it to three classic scientific explanations: Popper 1959, Kuhn 1996, and Lakatos 1970. PAT a, Summary. We develop a positive theory of accounting standards when standards generate network externalities and differ in the degree of reporting discretion or flexibility they provide to firms. Accounting Organizations and Society, Vol. 13, No. 6, p. 623-629, 1988. Printed in Great Britain POSITIVE ACCOUNTING THEORY: A REVIEW JOEL S. DEMSKI School of Organization and Management, Yale University -3682 88 3.00. Press plc The positive accounting theory of Watts and Zimmerman proposes positive accounting. In positive accounting theory, academics view a company as the total of contracts it has entered into. The theory posits that because businesses are fundamentally there. This article reviews and critiques the positive accounting literature following the publication of Watts and Zimmerman 1978, 1979. This article helped generate the positive accounting literature which offers an explanation of accounting practice, suggests the importance of contract costs and led to the discovery of some previously,