Acc423-Lecture Notes PDF

ACC 423
Accounting Research
Lecture Notes on Accountancy Research

Overview of Research
An understanding of the nature of social
research is imperative for anyone interested in
designing and conducting a formal research.
Formal type of research should be
differentiated from informal one that is loosely
defined and conducted in an ordinary parlance.
The characteristics and dimensions of social
research needs to be known or unveiled.

Also, the different processes that are important
in coming up with a systematic investigation of a
problem or problems needs to be explored.
This overview underscores research
methodology as the underlying philosophy in
pursuing a research endeavor. The dimensions of
research and their interlocking relationship is
espoused. The link between research methodology
and research method is also laid down.
The classification of research is a means to
label the purpose, application, information, and
timing of a research project. It should not be treated
as a rigid demarcation or inflexible categorization of
what a researcher does in real life investigation. The
distinguishing marks of each type of research may
overlap with each other. Understandly, a research can
have many classifications.

Characteristics of
Research
The word research is used loosely in everyday
conversation, especially among students and teachers.
For instance, students are often advised by their
teachers to do a library research about something or
someone with a written report submitted after the said
research.
In the news, products are advertised to have
been produced as a result of long years of research.
Lecture Notes
on
Accountancy
Characteristics of
Research
Polls of people’s opinions are also reported to
be a product of research.
It goes without saying that research means a lot
of things when used in ordinary parlance.
These activities could not be considered
research in the technical sense, especially if they
were conducted merely to gather facts or information
without clear purpose and without interpretation of
the data gathered.
Characteristics of
Research
While collecting data may be part of the
research process, if it was not undertaken in a
systematic manner and was not analyzed or
interpreted systematically, the act remains to be
mere data gathering and not a formal research.

Characteristics of
Research
For an activity to be considered as research, it
should entail a systematic process that uses data to
achieve a clear purpose such as answering a question,
gaining an understanding of an event or phenomenon, or
solving a problem.
Leedy & Omrod (2010) defined research as the
“systematic process of collecting and analyzing
information in order to increase our understanding of the
phenomenon with which we are concerned or interested.”
Characteristics of
Research
Saunders, et. al. (2010) defined research as
something that people undertake in order to find out
things in a systematic way, thereby increasing their
knowledge. The term “systematic” suggests that research
is based on logical relationships and not just beliefs. “To
find out things” means that there are multiple possible
purposes for research: describing, explaining,
understanding, criticizing, and analyzing.

Characteristics of
Research
The characteristics of a formal research are the following:
1. Question or problem as starting point
2. Clear articulation of goal
3. Specific plan of procedures
4. Collection and interpretation of data
5. Statement of the study limitations
6. Clear presentation of findings and conclusions
Show Table 1-1 on Comparison of the Characteristics

Dimensions of
Research
In addition to the characteristics previously
mentioned, formal research, both in natural and social
sciences, has certain dimensions distinguishing it from
the loosely classified type of research. Four dimensions
are dominant in scientific research: 1.) purpose of the
research undertaking, 2.) application of the overall
research findings or results, 3.) type of information
gathered and analyzed, and 4.) time element in the
conduct of the research.
Dimensions of
Research
The four dimensions also serve as the bases of
classifying research as shown in Table 1-2.
See Table 1-2

Dimensions of
Research
Table 1-2. Dimensions & Classifications of Research
Information
Purpose Application Time
Type
Descriptive Basic Quantitative Cross-sectional
Explanatory Applied Qualitative Longitudinal
Exploratory

Research Classifications
According to Purpose
A formal research is conducted with one purpose or a
combination of the following purposes: 1.)
description, 2.) explanation, 3.) exploration.
1. Description = entails precise measurement and
reporting of the characteristics of some
phenomenon or population under study.
It attempts to describe systematically a
situation, problem, phenomenon, service
or program.
It provides information about some
conditions and describes attitudes towards an
issue.
It often uses visual aids such as charts to aid
the reader in understanding the data distri-
bution. Since the human mind cannot import
fully a large mass of raw data, descriptive
statistics are very important in reducing the
data to manageable form.
2. Explanatory = involves the discovery and
reporting of relationship among different
aspects of the phenomenon under study. When
the relationship is able to foretell the
occurrence of certain aspects of the pheno-
menon, the study is capable of making
prediction or the estimation of scores on one
variable from information about one or more
other variables.
Explanatory research attempts to clarify why and
how there is a relationship between two aspects of a
situation or phenomenon.
A sub-category of explanatory research is
correlational research – one that emphasizes on the
discovery or establishment of the existence of a
relationship, association, or interdependence between
two or more aspects of a situation or phenomenon.

3. Exploratory = attempts to develop an initial,
rough understanding of some phenomenon. It is
a type of research conducted for a problem that
has not been clearly defined. It helps determine
the best research design, data collection method,
and selection of subjects for a problem. It should
draw definitive conclusions only with extreme
caution.

Exploratory studies are done to satisfy the researcher’s
curiosity and desire for better understanding and test the
feasibility of undertaking a more careful study.
It often relies on reviewing secondary documents and
other available literature and/or data. Results of
exploratory research are not usually useful for decision-
making by themselves, but they can provide significant
insight into a given situation.
Exploratory research is not typically generalizable to the
population at large.
According to Application
The second dimension of a formal research is the
application of the findings or results, which could
either be: 1.) basic or 2.) applied.
1. Basic (also called pure or theoretical) = is
undertaken to increase one’s knowledge about
a certain phenomenon or behavior but does not
seek to solve any existing problem. It only
seeks new ways of thinking.
It is the source of many new theories, principles
and ideas. Indeed, basic research adds to the body of
knowledge in a particular field or discipline.
It involves developing and testing theories and
hypotheses that are intellectually interesting to the
investigator and might have some applications in the
future, but have no application to social problems in
the present time.

2. Applied = a scientific study that seeks to solve
practical problems, rather than acquire
knowledge for knowledge’s sake. In social
sciences, the overarching goal of applied
research is to improve the human condition.
For example, applied researches may investigate
ways to improve agricultural crop production,
treat or cure a specific disease, or improve the
energy efficiency of homes, offices, or modes
of transportation.
In the business community, applied research may focus
on uncovering what needs are unmet. Such information
may be used in designing products or services that
would create demand in the market. This results in
providing better products and services to the existing
customers or generating new customers.
For example, the mobile phone used to be an expensive
and bulky gadget with short range of coverage. As a
result, the weight was reduced and the communication
sphere had beenLecture
expanded.
Notes on Accountancy Research
In the field of Accountancy, applied research has been
useful in developing policies on the structure of education,
the qualifications of individuals admitted for licensing, and
the accreditation processes for the members to engage in
professional practice. It has also been instrumental in
addressing regulatory issues, disclosure requirements, and
economics of market regulation. Moreover, large public
accountancy firms have research units that perform
applied researches on specific problem areas concerning
the practice of the profession.
Public management and governance, as areas of study,
have also relied on applied researches for reviewing
existing laws, rules, regulations, and policies. Due to the
pervasive use of applied research in policy formulation
and analysis, specifically in the government or public
sector, it has also been called policy research. Oftentimes,
applied researches are done for the development,
management, monitoring, and evaluation of government
programs & projects.
Show Table 1-3
According to Information Type
Table 1-3. Comparison of Basic and Applied
Research
CATEGORY BASIC RESEARCH APPLIED RESEARCH
Purpose Producing knowledge for Producing knowledge for action

understanding
Discipline Usually confined to one Often multidisciplinary
discipline
Audience Intended for a scholarly audience
Intended for a public audience of
or for specialists policy makers as well as scholarly
audience
Coverage Often narrow in focus as it Often comprehensive as it strives
strives for precision for suitable solution to a real life
problem
The third dimension of a formal research is the type
of information gathered and analyzed which could
either be: 1.) quantitative or 2.) qualitative.
1. Quantitative Research = refers to the systematic
empirical investigation of the quantitative pro-
perties of certain subject matter or phenomenon
and the relationships of these properties. It is
primarily concerned with the measurement of
attitudes, behaviors and perceptions.
Usually, its objective is to develop and employ
mathematical models to certain phenomena in order to
test hypotheses and generate theories. The process of
measurement is central to quantitative research
because it provides the fundamental connection
between empirical observation and mathematical
expression of quantitative relationships.
It is widely used in social sciences such as economics,
psychology, anthropology, and political science, etc.
Its mode of generating data is through large-scale
survey, using questionnaires or structured interviews.
These result in a collection of numbers, which can be
subjected to statistical analysis to come up with
results.
In general, the researcher has a very clear idea on
what is to be measured before the measurement
process takes place. To ensure systematic data
collection, a blueprint is always prepared.
2. Qualitative Research = explores attitudes,
behavior, and experiences, through methods as
interviews or focus groups. It attempts to get an
in-depth opinion from participants. Fewer
people take part in the research, but contact
with them tends to be longer.
This type of research studies the subjects in
their natural settings. The researcher conducts a
systematic inquiry into meanings, attempting to
interpret and make sense of phenomena and the
meanings that people attribute to them. The qualitative
methods produce information only on the particular
cases studied, and any general conclusions can be
considered only as hypotheses. Quantitative methods
can be used to verify which of theses hypotheses are
true.
While qualitative and quantitative researches are often
used in tandem, the benefits and disadvantages of each
are hotly debated.
Qualitative research is a more subjective form of
research as it allows researchers themselves to introduce
their own bias to form a more complete picture of the
subject. This type of research is necessary in situations
where what is being looked upon for in a study is
unclear. In said situations, the researcher should be alert
in determining what data is important and what is not. In
qualitative research the focus of the study may become
more apparent as time progresses.
Data from qualitative research are less concrete than
pure numbers as data. Instead, qualitative research may
yield stories, or pictures, or descriptions of feelings and
emotions. The interpretations given by research subjects
are given weight in a qualitative research, so there is no
attempt to limit their bias. At the same time, researchers
tend to become more emotionally attached to qualitative
research, and so their own bias may also become highly
evident in the results.
Show Table 1-4
According to Time Dimension
1. Cross-sectional Research = involves observation
of the population, or a representative subset, at
a defined time. It is designed to look at a
variable or relationship of a set of variables at a
particular point in time. The benefit of this type
of research is that it can be done relatively
faster as the research data is gathered at the
same time.

2. Longitudinal Research = involves repeated
observations of the same variable or set of
variables over a period of time. It is often used
to study changes or development trends over
time. It tracks the same people or other subjects
of the study and observes the differences. Due
to repeated observations, it may have more
power and benefit than cross-sectional studies.
However, since longitudinal studies are obser-
vational, in the sense that they observe the state of the
subject without manipulation, it has been argued that
they may have less power to detect causal relationships.
This type of research is more costly and time-
consuming, especially when applied to a large group of
individuals over an extensive time span. However, it
provides the best information about the continuity or
discontinuity of behavior over time & allows for the
tracking of patterns of behavior, as well as trends of
development, within a smaller group.
Research Methodology
The concept of research methodology has often
been confused with research method, a reason why
some books directly focus on the research method
without first linking it with the research methodology.
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.
According to Smith (2007), 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.
Show Figure 1
Specifically, research methodology is shaped by:
1. Ontology = the way a researcher views the nature
of reality;
2. Epistemology = the view of the researcher on the
nature of knowledge;
3. Perspective of the researcher with respect to the
conduct of the study.

Since research methodology is a reflection of the set of
beliefs of the researcher, it is also called the research
paradigm.
A paradigm is a basic set of beliefs that guides the
action in inquiry or research. It is similar to a pair of
eyeglasses in which one sees the world. When
conducting a study, a thoughtful researcher should be
able to articulate how his/her paradigm conforms
his/her use of theory and the choice of methods.
Ontology
Ontology = is a branch of philosophy that is
concerned with what one discerns to be real, that
is the structure and categorization of reality. One
dominant characterization about reality is the
essential duality in all things – reality could be
characterized by opposites. For instance, state-
ments about certain things are generally regarded
as either true or false. Obviously, one would
always have belief that is true or false.
Ontology
Like truth and falsity, idealism and realism is another
duality of thoughts.
An idealist upholds that reality exists within the mind
of the subject. The qualities that one perceives, such as
color or texture, are mental representations of sense-
data.
On the other hand, a realist believes that reality
subsists within the object and the world is real. He/she
suggests that reality is objective and concrete.
Ontology
Therefore, reality can be socially constructed. Ryan,
et. al. (2007) described realism as representative of the
common-sense view that when a person describes
something, said thing has reality which is independent
of one’s perception about it.
Other essential ontological questions are focused on
certain dichotomies about reality: 1.) objective and
subjective; 2.) fixed and changing; 3.) universal and
particular; 4.) abstract and concrete; 5.)deterministic
and nondeterministic.
Epistemology
Epistemology = is the branch of philosophy
concerned with how nature and scope of knowledge
is acquired. The dominant schools of thoughts
about knowledge are rationalism and empiricism.
Rationalists view that knowledge is accessible
through reason. On the other hand, empiricists
believe that knowledge is uniquely determined by
experience. In empiricism the certainty of
knowledge can be derived from perception through
our senses.
Epistemology
The popular combination of ontological and
epistemological viewpoints created a quadrant of
idealism or realism and rationalism or
empiricism.
Show Figure 2

Research Perspectives
The other aspect of research methodology is the
perspective taken by the researcher. Four
perspectives common in social sciences also apply
to accountancy research, namely:
1. Positivist
2. Interpretive
3. Criticalist
4. Post-modernist

Positivist perspective (the oldest perspective) =
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 and his/her instruments.
This view speaks of science as a means to explain
concrete social events and relationships.
A positivist research generally tests a theory, in an
attempt to increase the predictive understanding of
phenomena. It has evidence of formal propositions,
quantifiable measures of variables, hypothesis testing,
and the drawing of inferences about a phenomenon from
the sample to a stated population.
A research using positivist perspectives sees reality as a
concrete structure and people as adapters, responders,
and information processors to achieve efficiency and the
goal of an organization.
Positivism is regarded as the precursor of empiricism, a
school of thought that espouses the use of evidence and
analytical inquiry to understand reality.
Empiricism emphasizes the role of experience,
especially sensory perception, in the formation of ideas,
over the notion of innate ideas or traditions. It is
differentiated from rationalism which relies upon reason
to understand reality.
An empirical research emphasizes the aspects of
scientific knowledge that are closely related to evidence,
especially as discovered in experiments. Fundamental in
this type of research is the scientific method where
hypotheses and theories are tested against observations
of the natural world, rather than testing solely on a priori
reasoning, intuition, or revelation.

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 effectively, active participation, rather
than detached observation, may be required. This
perspective also places fundamental emphasis on the
understanding of process.
This perspective has applications in the work of
accountants when making decisions and advocating
certain actions. This perspective support the study of
some specific human behaviors that are subject to
interpretations & a number of behavioral issues that
could explain human behaviors with respect to
certain decisions made
Lecture in an
Notes onorganization.
Accountancy Research
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. Nonetheless, it also underscores that
their ability to do is constrained by various forms of
social, cultural, and political domination.
The main task of critical researchers is one of a
social critique. Studies with this perspective bring
to light certain restrictive and alienating conditions
of the status quo. They focus on the oppositions,
conflicts, and contradictions in contemporary society.
They seek to be emancipatory by helping eliminate the
causes of alienation and domination in 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.

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 challenges social and
political institutions, ideas of continuity and
structure, the nature of historical research and
knowledge, history writing, narratives, and
identities.

Postmodern 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.
The field of accountancy espouses neutrality,
reliability, and completeness as qualitative
characteristics of financial information. At the same
time, accountants and auditors are deemed to come up
wit fair presentation and express faithful representation
in their work.
Using a postmodern perspective of research, a study
can be made to find out the possibility for
accountants and auditors to produce neutral, reliable,
and complete information; come up with fair
presentation; and maintain faithful representation
at the same time, knowing the difficulty encountered in
the use of measurement systems and the inherent
limitations of accounting functions to cover all
economic realities of a business.

Sources of Knowledge
Another area that has an important bearing on
research methodology pertains to the sources of
knowledge, also labeled by Fraenkel & Wallen
(2003) as ways of knowing. These are:
1.) Sensory experience, 2.) Agreement with others,
3.) Expert opinion, 4.) Logic, and 4.) Scientific
method.
Show Figure 3
The immediate sources of knowledge of an
individual are the experiences gathered from his/her
senses: sight, hearing, smell, taste, and touch.
However, there is no absolute assurance that the data
gathered from one’s senses are completely
dependable. In fact, sensory knowledge might be
incomplete and at times undependable. The data
through the senses may not account for all the range
of human knowing.
Similarly, one’s understanding of data taken from
the senses might not be accurate since it can be
refined. Therefore, 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.
The second source of knowledge is the opinion of

others. By getting feedback from another person,
the accuracy and authenticity of the information
generated from the senses can be checked.
Apparently, the degree of reliance that can be placed
upon the sensory information can be more intense
with the opinion of another person. Thus, any
information that is believed to be untrue can be
discarded.
However, opinion of other people can also be wrong.

For instance, a majority vote in an issue is not a
guarantee of the truth. It is also common that two groups
of eye witnesses to the same incident may differ as to
the details of the said incident. Thus, it is necessary to
consider the opinion of an expert. This is the reason
why medical doctors are consulted on matters related to
health and illness; in the same way that lawyers are
sought for legal advice. These specialists have the expert
opinion. In the study of management & leadership, this
is known as knowledge power.
Nevertheless, what the experts can do is plainly to give
their opinion based on their knowledge. Obviously, what
they know is based primarily on their own efforts to read
and learn as well as on their own experience. Further,
experts, as human beings, can also commit mistakes.
Thus, even experts can never be totally sure.
Therefore, it is essential to use logic. Undoubtedly, the
capability to reason out would allow a person to make a
more realistic and intelligent knowledge about
something.
For instance, one can develop a syllogism that “if a cat
is in the basket and the basket is on the table, then the
cat is on the table.” The conclusion that “the cat is on
the table” is based on the two premises that “the cat is
in the basket” and “the basket is on the table. It goes to
show that the logical reasoning may not hold valid if
certain premises in the syllogism is not true. This is the
fundamental danger in logical reasoning. Thus, it is
time to turn to scientific method.

Science is a tremendous body of knowledge. Hence,
science 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.

What makes scientific method the most concrete way of
knowing and science the most reliable source of
knowledge? The scientific method has the following
characteristics: 1.) empirical, 2.) systematic,
3.) objective, 4.) replicable, and 5.) self-correcting.
Empirical = refers to the insistence on the
demonstration of evidence to validate whatever
theoretical and speculative work has been advanced.

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.
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 researchers.
Replicable = involves repeating the study a number of

times to determine if the same results will be
obtained.
Self-correction = entails a process where findings are

held as tentative until they are replaced by better-
established knowledge claims.
An investigation is not considered scientific unless it is
made public, that is, all aspects of the investigation are
described in sufficient detail so that the study can be
repeated by anyone who questions the results, provided
he/she has the competence and resources. Hence, private
procedures, speculations, and conclusions are not
considered scientific until they are published.

Methods of Drawing
Conclusions
In research, conclusions are drawn using two methods of
reasoning: deduction and induction. These methods
assist the researcher to understand, explain, and predict
events or phenomena.
Deduction = follows a “top-down” approach which is
“from general to specific.” In deduction, one starts
from a theory and tries to prove it right with the help
of available information. In addition, one observes
some happenings, deducts a pattern, and draws
conclusion.Lecture Notes on Accountancy Research
Methods of Drawing
Conclusions
In deductive reasoning, one starts with a theory about an
area of interest.
Show Figure 4
The theory 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.
Methods of Drawing
Conclusions
Induction = is “bottom-up” in nature of “from specific
to general.” It works the other way around starting
from specific observations to broader generalizations
and theories.
Show Figure 5
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 these
end up in some general conclusions or theories.
Methods of Drawing
Conclusions
In research, deductive reasoning is used to test the
hypotheses. As such, it is narrower in nature. On the
other hand, inductive reasoning, by its very nature, is
more open-ended and exploratory. Many social
researches involve both inductive and deductive
reasoning processes at some time. In fact, the flow from
theory to observation and back to theory again depicts
an iterative process.

Positive-Normative
Dichotomy
The positive-normative dichotomy applicable to both
theory and research, has also gained recognition as
methodological approaches. Economists have found the
positive-normative distinction useful because it helps
people with very different views about what is desirable
to communicate with each other.

Positive-Normative
Dichotomy
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. By contrast, 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.

Positive-Normative
Dichotomy
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 approach is
characterized by the researcher’s desire to make policy
recommendations and improvement (what should be).

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.
The theory-research dichotomy asserts that social
scientists operate in two worlds: the world of ideas,
theories, & models; the world of observation &
experience. Lecture Notes on Accountancy Research
Role of Theory
in Research
This led to two strategies, commonly called as theory-
then-research and research-then-theory.
Although there is a controversy as to which strategy most
fruitfully enhances scientific progress, it is well settled
that theory and research should interact constantly and
that the contrast between the two strategies is more
important than real.
Hence, theory and research should be coherent and
dialectic, meaning, both serve as means and end.

Role of Theory
in Research
Emory and Cooper cited that it is important for
researchers to recognize the pervasiveness and value of
theory. As orientation, it narrows the range of facts to be
studied. Any problem may be studied in a number of
different ways, and theory suggests which ways are
likely to yield the greatest meaning.

Role of Theory
in Research
Theory may suggest a system for the researcher to impose
on data in order to classify them in the most meaningful
way. It summarizes what is known about an object of
study and states the uniformities that lie beyond the
immediate observation. When it does, theory can also be
used to predict further facts which should be found.

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. A theory would
have one or more concepts. In that sense, concepts are
considered as the building blocks of theory.
Some concepts are dichotomous, that is, they have only
two possible values like gender, which is either male or
female. On the other hand, some contain several values,
categories, or sub-concepts along a continuum.
Concepts, such as age and population density can take on
more than one value along a continuum, are called
variables. A concept that 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. A bivariate proposition is
one that relates two variables, while a proposition relating
more than two variables is called multivariate.
Examples
Univariate: 45% of couples in the Philippines have used
contraceptives at least ones.

Bivariate: The higher the level of density in a city, the
higher the rate of crime in the city.
Multivariate: The higher the level of density in a city, the

higher the rates of illiteracy and drug
addiction in that city.

The term accountancy is used interchangeably with
accounting. However, technically, accountancy is a
broader concept. Accountancy is the profession or
business of an accountant. It refers to the discipline or
the branch of study dealing with the duties of an
accountant. Said duties include accounting, auditing, and
tax services. The work of accountants has expanded to
include the whole gamut of assurance services and certain
finance-related areas of management consultancy.

Most of the current literature uses the concept of
accounting research, although the coverage of said
research goes beyond accounting. Accountancy research
covers accounting, auditing and assurance, taxation, and
management services performed by the professional
accountant.
Oler, et. al (2009) indicated in their paper
“Characterizing Accounting Research” that Accountancy
research intersects with a number of neighboring
disciplines primarily in finance, economics, psychology &
Management. They also categorized accounting papers
into six: financial accounting, managerial accounting,
auditing, tax, governance, and other topics. Clearly, they
are referring to Accountancy research in this paper.
Following the definition of research by Leedy and

Ormond (2010) and Saunders et. al (2010), accountancy
research is the systematic process of collecting and
analyzing information in order to increase one’s under-
standing of the functions of a professional accountant
Following the definition of research by Leedy and
Ormond (2010) and Saunders et. al (2010), accountancy
research is the systematic process of collecting and
analyzing information in order to increase one’s under-
standing of the functions of a professional accountant and
contribute to the solution of problems besetting the
practice of the profession.
Accountancy research can be classified into functional
classification and sectoral classification.

Functional Classification
of Accountancy Research
The most rationale classification of accountancy research
is based on the functional classification areas of the
profession, namely:
1.) financial accounting,
2.) management accounting,
3.) auditing and assurance,
4.) tax, and
5.) other functional areas

Financial accounting research = concerned primarily
with studying the collection, recording, and reporting of
financial information about a business entity or other
forms of organizations. It looks 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.

Management accounting research = is a systematic
inquiry on the provision and use of accounting
information to managers within organizations. It delves
into how managers are provided with the basis to make
informed business decisions and how they are better
equipped in their management and control functions. It
examines the role of financial information in determining
the changes an organization implements and the decisions
it makes.

Auditing research = examines the systematic process
performed by auditors to objectively gather and evaluate
evidence related to certain assertions about economic
actions and events. It investigates the manner by which
auditors establish the degree of correspondence between
the client’s assertions and the established criteria. It looks
into the means by which auditors communicate the audit
results to users of the reports. Overall, it looks at the
quality of audit services and the value-adding functions of
audit.
Tax research = has a broad scope and can be at the macro
or micro level. At the macro level, the research can be an
objective, sound, and clear analysis of assessing taxation
proposals; evaluating fiscal policy issues based on the
principles of equity, efficiency, and adequacy and the
revenue-raising powers of the government.
At the micro/organizational level, the research can be
about the income tax expense reported for financial
accounting; corporate tax avoidance; tax-related decisions
on investment, capital structure, taxes & asset pricing.
Other functional areas of research = related to specific
functions such as fraud prevention and investigation,
corporate governance, internal auditing, risk management,
sustainability reporting, and the like.

Sectoral Classification
The sectoral classification of accountancy research is
based on the sectoral areas for which an accountant may
practice his profession, namely:
1. Education or academe;
2. Commerce and industry;
3. Public practice, and
4. Government
The foregoing sectors serve as either the subject of
research or the context wherein research findings and
recommendations will be useful.
Sectoral Classification
A number of researches aim to improve quality of
instruction and to enhance competency and efficiency of
faculty members in academic institutions. Improving
governance practices and compliance to financial
reporting standards are research agenda for most entities
in the commerce and industry. Quality assurance and
ethical compliance are also current concerns of
individuals in public accountancy. The government sector
is bent on improving accountability and control systems.

Research in Other
Disciplines
There are researches in other disciplines that cut across
the accountancy profession and provide hints of
accountancy research character. For instance:
Social research = an area that helps answer questions
about society and enables understanding of societal
structure and processes. Yet, it may also deal with
capital markets and social enterprises that entail
connections with financial reporting and controls.
Business research = a disciplined process of conducting
an inquiry on a management dilemma. This type of
Research in Other
Disciplines
research may also require relevant financial
information to strengthen the inputs to management
decisions.
Marketing research = a systematic and objective
identification, collection, analysis, dissemination,
and use of information to improve decision-making
and solve problems in marketing. However, it may
require costing and pricing which are both within
the realm of accountancy.

Basic & Applied
Accountancy Researches
The classification of research into basic and applied as
previously discussed is another pragmatic way of
classifying accountancy research.
Basic Accountancy research = are geared toward the
generation of knowledge, and generally initiated by
academic institutions, research centers, professional
associations, and academic societies or academies.
They are usually conducted by educators and
scholars with the results presented in conferences
and academic forums or published in journals.
Basic & Applied
Accountancy Researches
Applied Accountancy research = are intended to solve
problems, clarify issues or gray areas, and provide
inputs to policy development and decision-making.
These are primarily conducted by public
accountancy firms as dictated by the needs
encountered in the delivery of professional
services. It is also geared towards improving
administrative and operating systems of firms and
establish their own internal rules and procedures.

Process
Basic research in accountancy consists of five major
processes: 1.) conceptualization, 2.) operationalization, 3.)
data collection, 4.) data processing and analysis, and 5.)
application.
Show Figure 6
Conceptualization is the process of specifying what one
really means by a term. It is the means of clarifying
one’s thoughts and understanding of certain objects
or phenomena of interest to a person. It is the forma-
tive process in the conduct of accountancy research.
Process
Operationalization = aims to translate the related
concepts into observable units of measure. It also
deals with the manner the researcher intends to put
value to events and situations covered in the
research.
Data Collection = involves field work and use of various

techniques of data-gathering. These are the means
by which evidence is gathered to provide empirical
support in answering the research questions.
Process
Data Processing & Analysis = entails the conversion of
data into meaningful information. This requires the
use of presentation tools such as tables, graphs,
figures, and the like. The competency required is
capability of using the various methods of data
presentation; explaining the differences between
data, facts, and inferences; and stating research
findings clearly & accurately.

Process
Research Application = deals with the capacity of the
researcher to translate research outputs into
meaningful plans of actions or other models of
interventions that will provide the value to the
discipline, organizations, and communities.
Show Figure 7

Getting Started With the
Research Process
The first part of the conceptualization process is
identifying the activities which pertain to the research
problem. Babbie (1992) proposed three possible
beginning points for research undertaking: an interest, an
idea, and a theory.
The primary source of a research topic is the interest of
the researcher. Understandably, a researcher wishes to
examine the attributes, behaviors, and situations of a
subject matter that is appealing to him/her.

Research Process
Alternatively, the research may start with the researcher’s
idea about a specific situation or phenomenon. In fact, the
idea may be about his/her subject of interest.
For instance, the idea of conducting online licensure
examination must be important to the professional
regulatory bodies.

Research Process
Finally, an existing theory may bring about questions that
the researcher himself would like to answer. For example,
an accountant would like to find out how the activity-
based costing adopted by many manufacturing companies
can be developed for a road maintenance project. The
theory of motivation that has been applicable in the study
of organizational behavior may also be useful in
managing the staff of an audit firm.

Research Process
From an interest, idea, or theory, the researcher identifies
a particular topic or concept to become the focus of the
study. The topic becomes the basis for determining and
delineating the research problem. The problem might be
existing already or just potential based on the assessment
of the researcher.
Show Figure 7

Research Process
So, what is a problem? Generally, a problem is a defined
question thrown forward for solution. It may have arisen
from a felt need by some entities (individuals, groups, or
organizations) because they lack something. The problem
of this nature arises from a felt-need. Alternatively, a
problem of this type can be defined as a situation where
the actual happening differs from the desired situation.
If the problem is about knowledge, it must arise from gap
between that which is known and that which is to be
known. This type of problem is called knowledge gap.
Research Process
The problem may also arise from conflicts or
contradictions between theories and researches that were
conducted in the past, or differing stand of some identified
camps on a particular issue.
In choosing the problem to be studied, the researcher
should consider the novelty of the topic, meaning, it is
something that has not been “overstudied” in the past.
This is based on the rationale that researches should not
reinvent the wheel. Likewise, the anticipated results of
the study should be useful to the target readers or users,
Research Process
especially if it is disciplinary in character. The researcher
should be cautious about the administrative aspects of
conducting the research such as the availability of data,
the time allotted for the study, and the means to fund
the various activities to be undertaken.
Show Figure 8

Introduction of the
Research Report
The introduction of a research paper has six (6) essential
parts, as follows:
1. Background of the study
2. Rationale of the study
3. Statement of the problem
4. Objectives of the study
5. Significance of the study
6. Scope and limitations of the study

Introduction of the
Research Report
The background of the study discusses the major
concept(s) covered in the study with the title containing
the major concept(s). The important contents of the
background include the current situations or conditions
depicting the concept(s), such as the following:
1. Problems or lapses involving the concept(s);
2. Successes & opportunities resulting in the application
of the concept(s);
3. International & national developments in the meaning
of the concept(s).
Introduction of the
Research Report
The background may also contain the following:
a. Various perspectives in the treatment of the
concept(s);
b. Historical development or evolution of the concept(s);
c. Legal sources and provisions pertaining to the
concept(s).

Statement of the Problem
The problem statement is a concise declaration of the
question(s) to be answered. This is anchored on the
concept(s) described in the introduction. While a research
problem can be stated in a declarative form, the problem
statement is better presented in a question form.
The problem should be stated as clearly as possible. It
should be consistent with the operational framework. A
more preferred approach is to present specific questions in
every part of the operational framework.

Objectives of the Study
The objectives of the study constitute a guide for the
researcher and for the reader as well to know what the
researcher has to do. These usually follow the
chronological sequence of the specific questions in the
problem statement.
Objectives are written by beginning with either an
action verb or an infinitive such as describe, determine,
establish, ascertain, etc.

Significance of the Study
The significance of the study must contain
explanations of any or all of the following:
1. Who will benefit and how are they going to benefit
from the study;
2. Organizations, individuals to whom the
recommendations are addressed;
3. Possible contribution to knowledge in the field/focus
of the study;
4. Themes or areas developed for future researches;
5. Relevance of the study to issues in all levels (L, R, N)
Review of Literature
A literature review is an account of what has been
published on a topic by scholars and researchers. It
involves a search and analysis of documents related to the
research problem. These documents include books,
journals, reports, previous studies, websites, and the
like. The review will discuss, summarize and synthesize
what the sources (authors & organizations) have stated
about the problem in focus.
A review of literature is not a summary or an abstract
of articles. It is an analysis and synthesis of the source
materials, written in a specific style, which flows from
broad to narrow, and takes into account the theoretical and
empirical issues. It should not be superficial; it is not just
an annotated bibliography with a line or two on each book
or article. The review helps to contextualize or frame the
research.
In conducting literature review, consider the
following:
1. Extent of the review = should cover only literature
related to the concept and problem being studied.
Choose studies that are most relevant and not outdated.
2. Organizing the review = decide on how to order
those literatures that you consider relevant.
3. Writing the review = it should be organized by themes/
concepts (pertaining to the problem) and the organiza-
tion depends on the quantity of available literature.
4. Providing plotline to the research = a literature review
should be pointing toward the direction of the research.
5. Citing the sources = list all sources mentioned in the
review following a format & style guide.
Some of the common errors in reviewing literature:
1. Carrying out a hurried review of the literature in order
to get started on the research project.
2. Relying too heavily on secondary sources.
3. Concentrating on research findings when reading
articles, thus, overlooking valuable information on
methods, measures and so forth.
4. Overlooking other sources, such as journals
5. Failure to define satisfactorily the topic limits of the
review of literature.
Some of the common errors in reviewing literature:
6. Copying bibliographic data incorrectly and the inability
to locate the reference needed.
7. Copying far too much material into note cards.

Developing the Research
Framework
A framework is an underlying set of ideas, principles,
agreement or rules that provide the basis or the outline for
something that is more fully developed at a later stage.
It is a coherent system that facilitates consistent
development, interpretation, and application of concepts,
methodologies, and techniques useful to a discipline or
profession.
A framework provides a structural blueprint of how a
body of knowledge and guidance fits together.

Framework
Research frameworks are generally classified into
three: 1.) theoretical framework; 2.) conceptual
framework; 3.) operational framework.
The theoretical framework represents an adaptation of a

theory or theories from reputable sources which form the
basis of the researcher’s observations or the frame of
reference by which the conceptual framework may be
derived. It may be in the form of explanatory theory,
model or paradigm.
Framework
Model = is a representation of a system constructed for
the purpose of studying some aspects of the system
or the whole system. A model’s role is representa-
tion, whereas a theory’s role is explanation.
Paradigm = is a fundamental model or scheme that
organizes one’s view of something. Although a
paradigm does not necessarily answer important
questions, it shows where to look for the answers.
The theoretical framework may also be in the form of
perspectives, principles, standards, or schools of thought.
Framework
Examples of theories commonly used are as follows:
1. Agency theory
2. Systems theory
3. Contingency theory
4. Rewards theory
5. Motivation theory
6. Leadership theories

Framework
The conceptual framework stems from the theoretical
framework and concentrates, usually, on one section or
component of said theoretical framework. It describes the
aspects the researcher selected from the theoretical
framework to become the basis of the study. Thus, the
conceptual framework grows out of the theoretical
framework and relates to the specific research problem.
The steps in developing the conceptual framework are as
follows:
1. Identify the
Framework
The steps in developing the conceptual framework are as
follows:
1. Identify the key concepts and/or variables included in
the study. Take note that the concepts to be used should
be derived from the theories presented in the
theoretical framework.
2. Know the relationship of these concepts and/or
variables.
3. Make a schematic diagram, graphical presentation,
illustration or matrix of relationships of these concepts.
Framework
The operationalization process takes off from conceptual
framework. In this process, the primary task is the
preparation of the operational framework. The process
extends up to the point when the researcher is ready to go
on fieldwork to gather data. Once the operational
framework is done, the researcher can develop the research
design which serves as the basis of identifying the
methods of measurement and data gathering.
Show Figure 9
Framework
After the research design, the variables and the
corresponding indicators are identified and defined
operationally, the data-gathering methods are determined,
and the research instruments are prepared. Finally, a
sampling plan is developed.

Framework
The operational framework developed by the
researcher shows what will be performed in the research.
This is usually shown in the research as a diagram.
The elements commonly presented in the operational
framework may either be 1.) the variables of the study, 2.)
areas covered in the study, 3.) phases or major stages to be
undertaken.
In presenting the variables of the study, the operational
framework usually shows the variables that establish
association/relationship such as indep/dependent variables.
Framework
The operational framework may also be a schematic
presentation of the areas covered in the study. It may also
show the phases or major stages to be undertaken in the
research.
Show Sample Operational Frameworks

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ACC 423

Lecture Notes on Accountancy Research

Lecture Notes on Accountancy Research

Lecture Notes on Accountancy Research

Lecture Notes on Accountancy Research

Lecture Notes on Accountancy Research

Show Table 1-1 on Comparison of the Characteristics

See Table 1-2

Lecture Notes on Accountancy Research

Descriptive Basic Quantitative Cross-sectional

Explanatory Applied Qualitative Longitudinal

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Purpose Producing knowledge for Producing knowledge for action

Lecture Notes on Accountancy Research

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The second source of knowledge is the opinion of

However, opinion of other people can also be wrong.

Lecture Notes on Accountancy Research

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Objectivity = refers to the ability of the scientist to see

Replicable = involves repeating the study a number of

Self-correction = entails a process where findings are

Lecture Notes on Accountancy Research

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Multivariate: The higher the level of density in a city, the

Lecture Notes on Accountancy Research

Lecture Notes on Accountancy Research

Following the definition of research by Leedy and

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Data Collection = involves field work and use of various

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