... this practice by analysing recurring relationships. The nature of the inductive approach takes form in the following stages: i. Observation and recording of all observations ii. Analysis and classifications of these observations to detect recurring relationships. iii. Inductive derivation of generalisations and principles of accounting from those observations that depict recurring relationships. iv. Testing of the generalisations. From the stages of the inductive approach, we can see that during the process of induction, you begin with some data and determine what general conclusions can be logically derived from those data. There is not one theory that can be considered as the best since accounting theory cannot be narrowed down to a certain approach. It should therefore be noted that this approach has its strengths and weaknesses in current accounting practices. An inductive theory is derived from factual, empirical observations and therefore it is very descriptive. It describes what reality is like and therefore the truth and falsity ...

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