Banking and Finance Department at Epoka University organizes the open lecture with theme “Normative and Positive Analysis and the Interaction in Taxation and Financial reporting Mechanism” in the frame work of Financial Statement Analysis course which is conceptualized as a mix of lectures and practical experience with invited speakers from the sector.

The first speaker was Dr. Edvin Stefani, Certified Public Accountant with long experience in public and private sector, who delivered a lecture exploring the conceptual foundations of normative and positive analysis in economics and how these two perspectives interact to shape taxation systems and financial reporting mechanisms. It begins by revisiting a fundamental question: Can economics be considered a science? The discussion distinguishes between objective, verifiable knowledge, which is the domain of positive analysis, and value-based reasoning, which characterizes normative analysis. By examining how theoretical principles and empirical observations interact, the lecture situates economics as a field that bridges moral reasoning with scientific inquiry and this holds true in taxation also.

The normative approach focuses on how the economy should function, emphasizing ethical, legal, and institutional values that underpin public policy. In taxation, normative analysis guides the establishment of principles such as equity, fairness, efficiency, and legal certainty. It influences how governments design tax systems—defining who should pay, how much they should contribute, and under what ethical rationale. Normative principles also extend into financial reporting, where international standards like IFRS and SNK promote transparency, accountability, and comparability. These standards are normative in nature because they prescribe how financial information ought to be presented to ensure that companies act responsibly and that users of financial statements can make informed decisions.

The positive approach, on the other hand, seeks to describe and explain economic behavior as it actually occurs. It uses empirical evidence, quantitative data, and observation to understand the impact of tax laws and reporting rules on real-world outcomes. In taxation, positive analysis examines how individuals and corporations respond to tax incentives, deductions, and compliance requirements, testing whether the system achieves its intended goals. In financial reporting, it assesses how companies apply accounting standards in practice, how auditors and regulators enforce them, and how market participants interpret reported data. By relying on measurable results rather than ethical judgments, positive analysis helps identify gaps between policy intentions and actual performance.

Ultimately, the lecture concludes that normative and positive analyses are interdependent. Normative reasoning defines the ethical and legal principles that should guide taxation and financial reporting, while positive analysis provides the empirical validation needed to assess whether those principles are effective in practice. Together, they form a dynamic framework through which economists and policymakers can evaluate both the moral legitimacy and the practical efficiency of economic systems. This integration ensures that taxation and financial reporting evolve not only as technical mechanisms of compliance but also as instruments of economic justice, transparency, and societal trust.