ACC 80 - Accounting Research Methods

Learning Sequence/Input

LECTURE II: OVERVIEW OF RESEARCH (Continuation)

Research Methodology and Research Methods

 Research methodology refers to the philosophy behind the design and conduct of research.
On the other hand, research method relates principally to the tools of data collection and
techniques of data analysis.
 Research methodology is concerned with the philosophy associated with the choice of
research method, while research methods are concerned with the technical issues associated
with the conduct of research.
 Research methodology comprises three elements that all pertain to the views or beliefs of
the researcher about the world and with respect to the subject matter of study

1. Ontology is the way a researcher views the nature of reality. Ontology helps researchers
recognize how certain they can be about the nature and existence of objects they are
researching. Examples:
 What ‘truth claims’ can a researcher make about reality?
 Who decides the legitimacy of what is ‘real’?
 How do researchers deal with different and conflicting ideas of reality?
 One dominant characterization about reality is the essential duality in all things -
reality could be characterized by opposites.
Examples:
 True and false
 Idealism and realism
 Objective and subjective
 Fixed and changing
 Universal and particular
 Abstract and concrete
 Deterministic and nondeterministic

2. Epistemology is the view of the researcher on the nature of knowledge.

 Epistemology is concerned with all aspects of the validity, scope and methods of
acquiring knowledge.
 It is the branch of philosophy concerned with the nature and scope of knowledge and
how knowledge is acquired.
Examples:
 What constitutes knowledge?

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  How can knowledge be acquired or produced?
 How can the extent of its transferability be assessed?

 Epistemology is important because it influences how researchers frame their research in

their attempts to discover knowledge.
 The dominant schools of thoughts about knowledge are rationalism and empiricism.
 Rationalists view that knowledge is accessible through reason.
 Empiricists believe that knowledge is uniquely determined by experience and the
certainty of knowledge can be derived from perception through the senses.

3. Perspective of the researcher with respect to the conduct of the study.

o The ontological view of a person is associated to his epistemological assumptions.
Both ontological and epistemological viewpoints shape the perspective of inquiry.
o All of these taken together constitute the research methodology.
o Since research methodology is a reflection of the set of beliefs of the researcher, it is
also called the research paradigm
o A paradigm is a basic set of beliefs that guides the action in inquiry or research.
o When conducting a study, a researcher should be able to articulate how the
paradigm conform the use of theory and the choice of methods.
o Four perspectives common in social sciences that also apply to accountancy
research:
1. Positivist perspective
 It defines reality as something that can be perceived through the senses
and can be realized through experience.
 It views reality as objective, rests on order, and is governed by strict,
natural, and unchangeable laws.
 It assumes that reality can be described by measurable properties which
are independent of the observer (researcher) and the instruments used.
 A positivist research generally tests a theory, in an attempt to increase
the predictive understanding of phenomena.
 For example, when applied to accountancy, said perspective would view
accounting control systems, such as budgeting, as a means to achieve
low cost and efficient operations.
2. Interpretive perspective
 Views access to reality through social constructions such as language,
consciousness, and shared meanings.
 Interpretive studies generally attempt to describe, understand, and
interpret phenomena through the meanings that people assign to them.
 The task of a researcher from the interpretive perspective goes beyond
measurement to developing an understanding of the situation. To do this

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 effectively, active participation, rather than detached observation, may
be required.
3. Critical perspective
 Views social reality as historically constituted, produced, and reproduced
by people. It recognizes that people can consciously act to change their
social and economic circumstances which are constrained by various
forms of social, cultural, and political domination.
 The main task of critical researcher is one of a social critique. The focus is
on the oppositions, conflicts, and contradictions in contemporary
society.
 In accountancy parlance, a critical perspective offers the potential to
examine the economic consequences of accounting and the perceptual
biases of accountants, managers, decision-makers, and other
stakeholders in their use of accounting information.
4. Postmodern perspective
 Involves a critical revisiting or rethinking of the past.
 It does not deny the dominant, liberal, and humanist culture in society
and the world, but it challenges their assumptions from within.
 Postmodernism finds a place in the field of accountancy. Apparently,
accountancy, as a discipline, is firmly embedded in a modern view of the
world.
 For instance, accounting information has become an economic
good that has a demand because of the belief that it reflects
reality. This view about accounting information can be
challenged by a postmodern perspective since such information
is abstract and it is impossible for an abstraction to reflect the
full extent of reality.
Sources of Knowledge
 Another area that has an important bearing on research methodology pertains to the
sources of knowledge or ways of knowing.
1. Sensory experience
 Immediate sources of knowledge
 There is no absolute assurance that the data gathered from one’s senses are
completely dependable
 Data taken from the senses might not be accurate since it can be refined
 It is not entirely safe to rely on the senses alone to be able to generate
knowledge; one must check what he/ she thinks or what he/ she knows with
other sources.
2. Agreement with others/opinion of others
 By getting feedback from another person, the accuracy and authenticity of the
information generated from the senses can be checked.

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  The degree of reliance that can be placed upon the sensory information can be
more intense with the opinion of another person.
 Opinion of other people can also be wrong so it is necessary to consider the
opinion of an expert.
3. Expert opinion
 The experts give their opinion based on their own knowledge which is based
primarily on their own efforts to read and learn as well as on their own
experience.
 However, no expert has studied or experienced all there is to know in a given
field.
 Even experts can never be totally sure. Also, experts, as human beings, can be
mistaken. Therefore, it is essential to use logic.
4. Logic
 The capability to reason out would allow a person to make a more realistic and
intelligent knowledge about something.
 Logical reasoning may not hold valid if certain premises in the syllogism is not
true. Thus, it is time to turn to the scientific method.
5. Scientific method
 Science is a tremendous body of knowledge. It is a source of knowledge and the
scientific method is a way of knowing.
 The scientific method essentially involves the testing of knowledge or ideas in
the public arena. It places guesses and hunches to a careful and thorough test to
be able to come up with conclusions that are reliable.
 Said conclusions can be the basis to reach an intelligent decision about a
problem or a dependable answer to a question.
 The scientific method has the following characteristics:
1. Empirical characteristic refers to the insistence on the demonstration of
evidence to validate whatever theoretical and speculative work has been
advanced.
2. Systematic pertains to the use of processes including conceptual schemes
and theoretical structures that are tested for internal consistency and
subjected to empirical tests. All aspects of the scientific method are carefully
planned in advance and nothing is done in a casual and haphazard fashion.
3. Objectivity refers to the ability of the scientist to see and accept facts as they
are and not as one might wish them to be. Scientists attempt to remove their
biases, beliefs, preferences, wishes, and values from their scientific
researches.
4. Replication involves repeating the study a number of times to determine if
the same results will be obtained.
5. Self-correction entails a process where findings are held as tentative until
they are replaced by better established knowledge claims.

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 Inductive and deductive methods

In research, two methods of reasoning are used in drawing conclusions - Deduction and
Induction. They assist the researcher to understand, explain, and predict events or
phenomena. The following are characteristics of the two methods.

 Deduction follows a "top-down" approach which is "from general to specific." On the

other hand, induction is "bottom-up" in nature or from specific to general.
 In deduction, one starts from a theory and tries to prove it right with the help of
available information. In induction, one observes some happenings, deducts a pattern,
and draws conclusion.
 In deductive reasoning, one starts with a theory about an area of interest which is
narrowed down into more specific hypotheses that are tested. To gather evidence
necessary for testing the hypotheses, an observation is conducted. Ultimately, the
specific data gathered will enable the testing of hypotheses in order to confirm or refute
the original theory.
 Inductive reasoning works the other way around starting from specific observations to
broader generalizations and theories. The process begins with specific observations and
measures, which enable the discovery of certain patterns and regularities. Based on the
observation, some tentative hypotheses are formulated and later on explored. All of
these end up in some general conclusions or theories.
 In research, deductive reasoning is used to test or confirm hypotheses. As such, it is
narrower in nature. On the other hand, inductive reasoning, by its very nature, is more
open-ended and exploratory.

Positive-Normative Dichotomy
 The positive-normative dichotomy, applicable to both theory and research, has also
gained recognition as methodological approaches.
 The fundamental distinction between the two approaches is focused on the fact-based
statement of the positive approach and the value-based statement of the normative
approach. A research is positive if the researcher’s overall research objective is to
describe and explain reality. In contrast, normative research is characterized by the
researcher’s desire to make policy recommendations and improvement (what should
be).
 These two approaches are also used in Economics. Positive economics has to do with
"what is," while normative economics has to do with "what ought to be."
 Positive economics is a social science, and is subject to the same checks on the basis of
evidence as any science while normative economics has a moral or ethical aspect, and
goes beyond what science can say.
 A normative statement expresses a judgment on whether a situation is desirable or
undesirable.

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 Role of Theory in Research
 A theory is a set of systematically interrelated concepts, definitions, and propositions
that are advanced to explain and predict phenomena.
 Theories, which are also developed from research outputs, are considered as a
systematic explanation for the observed facts and laws that relate to a particular aspect
of life.
 In the deductive reasoning method, research is used to test theory while in the inductive
reasoning method theories are developed from the analysis of research data.
 The theory-research dichotomy asserts that social scientists operate in two worlds:
a. The world of ideas, theories, and models
b. The world of observation and experience
 Two strategies in research:
a. theory-then-research
b. research-then-theory.
 Theory and research should interact constantly and that the contrast between the two
strategies is more apparent than real.
 Uses of Theory in Research:
 Define the boundaries of the phenomena as well as what data should be collected
and the corresponding methodology.
 A powerful research tool that can shape researchers’ thinking processes, lay their
foundation for analytical frameworks, and set their research agenda.
 Lead researchers to adopt certain methodologies, attract them to examine certain
data sets, and influence them to draw certain conclusions and policy implications.
 Suggest a system for the researcher to impose on data in order to classify them in
the most meaningful way.
 Summarizes what is known about an object of study and states the uniformities that
lie beyond the immediate observation.
 Can also be used to predict further facts which should be found.

Basic Components of Theory

 The basic components of a theory are concepts and variables, which are usually related
in statement forms that are generally called propositions.
 A concept is simply a mental image or perception.
 Concepts are considered as the building blocks of theory.
 Some concepts are dichotomous - they have only two possible values like gender,
which is either male or female.
 Some concepts contain several values, categories, or sub-concepts, often falling
along a recognizable dimension or continuum. Examples:
o age is a continuum containing many different values or categories, such as one
year old, ten years old and so on.

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 o Population density can vary from one person per square mile to many persons
per square mile.
 Concepts, such as age and population density that can take on more than one value
along a continuum, are called variables.
 A concept that has only a single, never changing value is called a constant.

 Variables are the empirical counterparts of concepts. While concepts are in the domain
of theory, variables are matters of observation and measurement.
 In theory construction, after the basic concepts are formulated, the next step is to write
one or more propositions.
 A proposition is simply a statement about one or more concepts or variables.
 A proposition that discusses a single variable is called univariate.
o Twenty five percent of first year BS Accountancy students at MMSU have visited
the University Library at least once.
 A proposition that relates to two variables is called bivariate.
o The more subjects a student enrolled, the more frequent he visited the Library.
 A proposition relating to more than two variables is called multivariate.
o The more subjects a student enrolled, the more frequent he visited the Library,
and the more books he read.

The Scientific Method of Research

 One of the characteristics of good research is that it is systematic. It follows the scientific
method of research which includes the following sequential steps:
1. Determine (Identify) the problem
 Observe your surroundings and identify a problem you would like to solve.
Example: What is the impact of COVID 19 on the financial performance of small
business in Ilocos Norte?
 You should not know the answer to the question and you cannot find the answer
in the library nor in the internet.
 “Why” and “what would happen if” are good beginnings of a scientific questions.
2. Formulate a hypothesis
 Hypothesis is a tentative conjecture (speculation/inference) regarding the
phenomena under consideration.
o The specific statement of prediction which describes in concrete terms what
you expect will happen in your study.
o Possible answer to a question that can be tested.
Example: COVID 19 adversely affected the financial performance of small
business in Ilocos Norte.
3. Do the library search/Gather background information
 Use references to do background research – books, journal, magazines, internet,
interview experts

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 4. Design the study
 Identify the variables to be used.
 Detail the step by step procedure and instructions on how to conduct the
research.
 Identify the respondents
5. Develop the instruments for collecting data
 Questionnaire
 Structured interview schedule
 List the variables/items to be observed (actual observation)
6. Record and organize the data
 Write all answers and observations
 Use a table to organize the data collected
7. Analyze the data
 Analyze the gathered data using the appropriate tools or methods (mean,
frequency, descriptive statistics, regression, correlation analysis)
 Describe how to present the results (picture, graph, chart)
8. Determine the implications and conclusions from the findings
 This is a summary of the results and how these results match up to the
hypothesis.
 Review the data/results and check to see if your hypothesis is correct.
 Make the conclusions based on the results which may either reject the
hypothesis or accept the hypothesis.
9. Make recommendations.
 Based on the conclusions, make recommendations.

Some Hindrances to Scientific Inquiry (Errors in Personal Judgment)

1. Tradition. This is accepting that customs, beliefs, practices and superstitions are true and
parts of the daily lives of men. No effort is exerted to find out whether they are true or
not. People have the idea that when everybody does a thing, it is true.
2. Authority. This is accepting without question, an opinion about a certain subject which
is given by someone who is considered an authority of the subject. They are believed
without any scientific inquiry about the truth of their pronouncements.
3. Inaccurate observation. This is describing wrongly what is actually observed. Ex. A man
saw a shadow in the form of a person in the dead of a moonlight night, he concluded at
once without any investigation that he had seen a ghost.
4. Overgeneralization. Establishing a pattern out of a few instances. Ex. When one sees one
or two ilocanos who are responsible, hardworking and trustworthy, he concludes that
Ilocanos are hardworking, responsible and trustworthy.
5. Selective observation. This is persisting to believe an observed pattern from an
overgeneralization and ignoring other pertinent patterns.

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 6. Made-up information. This is making up information to explain away confusion. Wrongly
interpreting the findings of a research material.
7. Illogical Reasoning. This is attributing something to another without any logical basis.
8. Ego-involvement in understanding. This is giving an explanation when one finds himself
in an unfavorable situation. Ex. When a student got a low grade, he says that he got a
low grade because his teacher has a personal grudge against him and he is a victim of
vindictiveness. He does not make any effort to examine his abilities, his habits of study,
etc.
9. Mystification. This is attributing to supernatural power, the phenomena that cannot be
understood. This is accepting that there are things which are beyond human intelligence
to understand and which are reserved only to supernatural being. No effort is exerted to
make a scientific inquiry about these phenomena.
10. To err is human. This is an attitude that admits the fallibility of man. He does not do any
effort anymore to study why he committed error, how he committed the error, the
implications of the error, how he correct his error and how to make more sound decision
in the future.
11. Dogmatism. This is an unwritten policy of certain institutions and government
prohibiting the study of topics that are believed to run counter to the established
doctrines of such government or institution.

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