Accounting Theory: Review of Theory in Purchasing and Inventory Management

24 Pages Posted: 6 Feb 2017 Last revised: 7 Feb 2017

See all articles by Prof. Godwin Emmanuel Oyedokun

Prof. Godwin Emmanuel Oyedokun

Lead City University Ibadan Nigeria ; OGE Professional Services Ltd; Nasarawa State University, Keffi

Date Written: December 16, 2016


Separate classification and measurement of inventories and purchasing effort of an organisation are necessary because of their significance as a basic resource of many firms and because the basis of valuation of inventories has a direct effect on the reported income and the cash flow presentations. Similarly, an evaluation of current and suggested measurement procedures should take into consideration the basic nature of inventories in relationship to the firm’s operations, and the objectives and basic concepts as relating to accounting. In step with the changes in firms’ competitive environments, the purchasing function is receiving increasing attention from managers and researchers alike. Through the past decades, the purchasing and supply management (PSM) literature has shifted towards a more strategic focus. This paper discusses the concepts and theories underpinning the purchasing and inventory management in relation to the theory of creation/invincible hand and its importance in accounting theory. Contents analysis was adopted for this study by reviewing the available literature in this field. It was discovered that theory is the backbone that shape practice in purchasing/supply chain and inventory management.

Keywords: Purchasing, Supply Chain Management, Inventory Management, Accounting theories, Invincible Hand

JEL Classification: M40, M41, M49

Suggested Citation

Oyedokun, Godwin Emmanuel, Accounting Theory: Review of Theory in Purchasing and Inventory Management (December 16, 2016). Available at SSRN: or

Godwin Emmanuel Oyedokun (Contact Author)

Lead City University Ibadan Nigeria ( email )

+2348033737184 (Phone)


OGE Professional Services Ltd ( email )

2nd Floor, Back Wing, 28, Adeyemi Street, Off LUT
Mushin, Lagos

Nasarawa State University, Keffi ( email )

Department of Accounting
Faculty of Administration
Keffi, Nasarawa 234
+23480833737184 (Phone)

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