Following the research for formally recognizing the conceptual bases of accounting, the main problem facing theoreticians is the kind of suitable structure they consider for the market. These theoreticians would like to detect the process of this structure which makes the market independent from individuals, and place it as the main basis.
A great many theories and pattern have been formulated in this direction and research has been carried out. Out of the best stated theories, we can mention the Efficient Market Hypothesis (EMH) as an example which has been quite distinguished (EMH) simply means that security prices reflect the. aggregate impact of relevant information in an unbiased way and the adjustment to new information is very rapid. Such market approach focuses on.
The welfare of society rather than of the individuals. A focus on the capital market rather than on the individuals investor results in a different objective for accounting information. Information is necessary to permit an optimum allocation of resources among
producers Also, information is necessary to permit investors to hold security portfolios that are optimum with respect to the risk-return preference of the investors. in summary, it can he assumed that the allocation of resources will be improved by any increase in the amount of relevant information impounded in market prices.