accounting research study definition

What is accounting research?

1 Introduction
2 General Overview of Accounting Research
3.1 Accounting Information Systems (AIS)
3.2 Auditing
3.3 Financial
3.4 Managerial
3.6 Other Topical Areas
4.1 Analytical
4.2 Archival
4.3 Experimental
4.4 Other Research Methodologies
5 Summary of Research Interests
6 Skills necessary to be a successful researcher
7 How accounting research can make a difference in the world

Introduction

Accounting research is hard to define because it has shifted over time. As a rough overview, early accounting research (pre-1960s) was mostly normative (i.e., arguing for the “correct” accounting treatment, or what should be). With the advent of the Journal of Accounting Research, advances in finance such as the efficient market hypothesis, creation of large data sets and the statistical abilities to analyze them (i.e., computers), and the publication of Ball and Brown’s seminal work in 1968, accounting research moved into positive research (i.e., examining what is rather than what should be). Although this change has had its critics, it has resulted in a significant increase in research output (and many new journals).

A cynical definition of research is: any paper that cites a lot of other accounting papers must be accounting research. This “quick and dirty” definition restricts accounting research to topics and methodologies that are well established in the literature; it is “safe” but somewhat limiting. More rigorously, Oler, Oler, and Skousen (2009) attempt to characterize accounting research by looking at the topics, research methodologies, and citations made by papers published in a set of six top accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR). Their work can be criticized, though, because they do not consider all accounting journals, and because their categorizations of topics (6 of them) and research methodologies (7 of them) are broad. In spite of shortcomings, their paper appears to be the first that attempts to characterize and define accounting research, which they define as follows: “accounting research is research into the effect of economic events on the process of summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of reported information on economic events.”

Professors typically will choose a subject area and a methodology in which to focus their efforts. Subject areas include the topical areas considered under the umbrella term "accounting." These include information systems, auditing and assurance, corporate governance, financial, forensic, managerial, and tax.

General Overview of Accounting Research

“Academic research looks at how accounting affects the world around us and how the world affects accounting.” Teresa P. Gordon and Jason C. Porter

Accounting research plays an essential part in creating new knowledge. The hard sciences have produced models of research and testing that can be used and applied over many disciplines, including accounting research. Using these models along with evidence such as financial statements, stock prices, surveys, experiments, computer simulations, and mathematical proofs, we can gain a scientific perspective and basis for the following:

Deciding and implementing new accounting or auditing standards
Presenting unusual economic transactions in the financial statements
Learning how new tax laws impact clients and employers
Discerning how the accounting profession affects the capital markets through academic accounting research

Researchers perform two main types of research, positive and normative.

Positive research is the branch of academic research in accounting that seeks to explain and predict actual accounting practices.
Normative research , in contrast, seeks to derive and prescribe "optimal" accounting standards.

Researchers use the scientific method to search for cause and effect relationships. By using the scientific method, the researcher has a systematic model that enables documentation of their results. The more specific the researcher is in documenting their methods, the better others will be able to follow and repeat their experiment.

Scientific Method:

Observation: As with most research, accounting research begins with the researcher making an observation, seeing a potential pattern, or wondering how an action or event may affect a future action or event.
Develop theory: The researcher then uses these observations to develop a theory or an explanation of what might be causing these actions or events.
Background research: Once the researcher finds an interest and develops a theory, background research on this theory is important. The background research is to help the researcher discover similar past theories, current and alternative theories, what evidence has been brought forth, and what tests have already been performed. This research will save the researcher a great deal of time and guide their research to test a new aspect or help resolve areas of disagreement.
Use theory to develop hypothesis: After this background research is conducted and existing theories discerned, the researcher will use their theory to create a specific hypothesis. This hypothesis should focus on an untested area or area of disagreement. Additionally, the hypothesis should make a specific prediction about how an action or condition will affect other actions or conditions.
How well the study captures a cause-and-effect relationship;
How well the variables used in a study capture the ideas and events in the hypothesis;
How well the results from a study can be applied to other settings
Examine test results: Once the tests have been designed, operated, and data collected, the next step is to use statistical methods to compare the actual results with the hypothesized results and determine if there is significant evidence to confirm the hypothesis.
Confirm or disconfirm theory: After the evidence has been examined and sensitivity analysis ran, the researcher can then confirm or disconfirm the hypothesis and theory the hypothesis was derived from.

Accounting Research Topical Areas

The following definitions of research topical area and methodologies are based on definitions found in a research paper by Coyne , Summers , Williams , and Wood (2010, available here ).

Accounting Information Systems (AIS)

Studies that address issues related to systems and the users of systems that collect, store, and generate accounting information. Users are defined broadly to include those involved in collection, storage, or use of accounting information or even the implementation of the system. These systems may be electronic or not. Research streams include, but are not limited to, design science, ontological investigations, expert systems, decision aides, support systems, processing assurance, security, controls, system usability, and system performance.

For an example, see Christ, Emmett, Summers and Wood (2011, available here )
For an example, see Myers, Starliper, Summers and Wood (2015, available here )

Studies that address issues related to an audit topic. These studies vary widely and include, but are not limited to, the study of the external and internal audit environment, auditor decision making, auditor independence, the effects of auditing on the financial reporting process, and auditor fees.

For an example, see DeFond and Zhang (2014, available here )
For an example, see Prawitt, Sharp, and Wood (2011, available here )
For an example, see Gul, Wu, and Yang (2013, available here )
For an example, see Glover, Prawitt, and Wood (2007, available here )

Studies that address the topical content of financial accounting, capital markets, and decision making based on financial accounting information.

For an example, see Fields, Lys, and Vincent (2001, available here )
For an example, see Burton, Starliper, Summers and Wood (2014, available here )
For an example, see Atwood, Drake, Myers, and Myers (2010, available here )
For an example, see Christensen, Drake, and Thornock (2012, available here )

Studies that examine issues regarding budgeting, compensation, decision-making within an enterprise, incentives, and the allocation of resources within an enterprise.

For an example, see Ittner and Larcker (2001, available here )
For an example, see Presslee, Vance, and Webb (2013, available here )
For an example, see Emett, Guymon, Tayler, and Young (2015, available here )
For an example, see Bol, and Smith (2011, available here )
For an example, see Christ, Masli, Sharp, and Wood (2015, available here )

Studies that examine issues related to taxpayer decision-making, tax allocations, tax computations, structuring of accounting transactions to meet tax goals, tax incentives, or market reactions to tax disclosures and policies.

For an example, see Hanlon and Heitzman (2010, available here ) and Shackelford and Shevlin (2001, available here )
For an example, see Maydew (2000, available here )
For an example, see Barrick and Alexander (2014, available here )
For an example, see Kadous, Magro, and Spilker (2008, available here )

Accounting Research Methodologies

A researcher will select a methodology to determine how the research is to be conducted. There are three main methodologies for research in accounting: archival , analytical , and experimental .

One thing to avoid when discussing methodologies is to refer to one of the methods as "empirical" to differentiate from other methods. This is most often done by archival researchers who refer to their research as empirical and exclude experimental research from the "empirical umbrella." Empirical research is research that is verifiable based on observation or experimentation; thus, archival and experimental research are both empirical in nature.

Researchers who utilize analytical methods base analysis and conclusions on formally modeling theories or substantiated ideas in mathematical terms. These analytical studies use math to predict, explain, or give substance to theory.

For a recent example of analytical research in accounting, see Gao (2010, available here )

Researchers who utilize archival methods base analysis and conclusions on objective data collected from repositories of third parties. Also included are studies in which the researchers collected the data and in which the data has objective amounts such as net income, sales, fees, etc.

For a recent example of archival research in accounting, see Ball and Shivakumar (2008, available here )

Experimental

Researchers who utilize experimental methods base analysis and conclusions on data the researcher gathered by administering treatments to subjects. Usually these studies employ random assignment; however, if the researcher selects different populations in an attempt to “manipulate” a variable, we include these as experimental in nature (e.g., participants of different experience levels were selected for participation). Experimental research can include analyzing both economic and behavioral factors.

For a recent example of experimental research in accounting, see Magilke, Mayhew, and Pike (2009, available here )

Other Research Methodologies

Studies that did not fit into one of the other methodological categories. The methodologies in these studies vary significantly and include such things as surveys, case studies, field studies, simulations, persuasive arguments, etc.

Summary of Research Interests

For a thorough description of each methodology as it applies to each subject area, the following matrix has been created:

Skills necessary to be a successful researcher

Although there have been great discoveries made by accident that have changed the great paradigms of knowledge, academic research and the creation of knowledge is not an event left to chance. Academic research comes from mastering skills that enable the researcher to carry out research processes. These processes will contribute to and progress the current accepted knowledge base, inform industry practices, and open up new ideas and areas of research to follow.

Some of the skills necessary to become a successful researcher include the following:

The ability to know and stay abreast of current work within your field of research.
The ability to understand and recognize research problems.
The ability to understand research content.

The ability to discover where you can make a contribution and evaluate/re-evaluate your contribution.
The ability to master appropriate experimental, mathematical, and computational research skills.
The ability to think critically and analytically.
The ability to formulate plans to meet goals and deadlines.
The ability to follow good research practices.
The ability to document and report your work.
The ability to communicate and defend a coherent argument to interested parties.
The ability to critically review the worth of your own work and the works of other researchers.
Internal Validity - what is the strength of the controlled experiment?
Construct Validity - Does what you are measuring actually capture the ideas and events in the hypothesis?
Statistical Conclusion Validity - Once everything is in place, is there strong enough evidence to prove an actual difference?
External Validity - once you have proven this is valid in this situation, how well does it transfer to other situations and other subjects?

Additional information for these key research skills can be found at:

Guidelines on PhD Research and Supervision , Professor Roberto Cipolla, University of Cambridge;

Research Skills Required by PhD Students , Cloudworks;

Reading and Understanding Academic Research in Accounting: A Guide for Students , Teresa P. Gordon and Jason C. Porter, University of Idaho.

How accounting research can make a difference in the world

Some of the ways accounting research can make a positive difference in the world include the following:

It can affect practice (usually high-level decision makers, through textbooks)
It mentors researchers' thinking, who then change world through consulting, professional service, and teaching
It affect standard setter and regulator decisions

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This page was last edited on 7 December 2020, at 13:21.
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