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TOPIC OUTLINE
NATURE OF
• Meaning of Accountancy Research
ACCOUNTANCY • Accountancy Research as a System
RESEARCH • Landscape of Contemporary
Accountancy Research

• Motivations for Accountancy Research

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OBJECTIVES OBJECTIVES
• Appraise the current state and attributes of
• Explain the meaning of accountancy research accountancy research, both in the international
and its properties as a system and local settings
• Assess the motivational factors in the conduct of
• Differentiate the functional and sectoral research in the profession
• Identify the initiatives undertaken by the different
classifications of accountancy research professional organizations and academic
institutions
• Illustrate the different perspective in research
• Evaluate the contributions of the various
and how they become applicable to accountancy initiatives undertaken for the advancement of
research
research
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MEANING OF MEANING OF
ACCOUNTANCY RESEARCH ACCOUNTANCY RESEARCH
Accountancy is defined by the Oxford English
Dictionary as “the profession or business of an Accountancy research therefore covers
accountant.” It refers to the discipline or the
branch of study dealing with the duties of an accounting, auditing and assurance,
accountant. Said duties include, accounting,
auditing and tax services. Recently, the work of taxation, and management services
accountants has expanded to include the whole
gamut of assurance services and certain performed by the professional
finance-related areas of management
consultancy. accountant.
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MEANING OF
ACCOUNTANCY RESEARCH
Oler, et al. (2009) indicated in the paper
“Characterizing Accounting Research” that
accounting research intersects with a number
of neighboring disciplines primarily in finance,
economics, psychology, and management.
They also categorized accounting papers into
six: (1) financial accounting, (2) managerial
accounting (3) auditing (4) tax (5) governance
and (6).other topics
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MEANING OF
ACCOUNTANCY RESEARCH
Following the definition of research by Leedy and
Ormrod (2010) and Saunders, et al. (2010),
accountancy research is the systematic process of
collecting and analyzing information in order to
increase one’s understanding of the functions of a
professional accountant and contribute to the
solution of problems besetting the practice of the
profession.
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ACCOUNTANCY RESEARCH FINANCIAL ACCOUNTING

CLASSIFICATION RESEARCH
• functional-areas include accounting, auditing -concerned primarily with studying the
collection, recording and reporting of
and assurance, tax, and other functional areas
financial information about a business entity
• Sectoral-based on the sectors of professional or other forms or organizations. It looks into
accountancy practice which are: education or the effect of economic events on the process
of summarizing, analyzing, verifying and
academe, commerce and industry, public
reporting standardized financial information,
practice and government and on the effects of reported information on
economic events.
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FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING

RESEARCH RESEARCH

• It examines the essential characteristics of Systematic inquiry on the provision and use of
accounting information to managers within
accounting, specifically the identification
organization. It delves into how managers are
and measurement of financial information
provided with the basis to make informed
about economic entities and the
business decisions and how they are better
communication of the information to equipped in their management and control
interested parties. functions.
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MANAGEMENT ACCOUNTING
RESEARCH
It examines the role of financial information in
determining the changes an organization implements
and the decisions it makes. This type of research
could look at the impact of organizational change on
accounting practices or the interaction between
management accounting techniques and functional
strategies, such as total quality management and lean
inventory production.
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AUDITING RESEARCH
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. This type of research can be expanded to
include assurance and attestation services.
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AUDITING RESEARCH
It 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
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TAX RESEARCH
It has a broad scope and can be at the macro
or micro level. At the macro level, the research
can be an objective, sound an clear analysis of
assessing taxation proposals; evaluating fiscal
policy issues based on the principles of equity,
efficiency, and adequacy; and other revenue-
raising powers of the government.
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OTHER FUNCTIONAL
TAX RESEARCH
AREAS
At the micro or organizational level, the research can
The other functional areas of accountancy
be about the income tax expense reported for
financial accounting corporate tax avoidance; tax- relate to specific functions such as fraud
related decisions on investment, capital, structure, prevention and investigation, corporate
and organizational form and taxes and asset pricing.
governance, internal auditing, risk
The tax code is a complicated menagerie of rules
and regulations that researchers must navigate management, sustainability reporting and the
periodically. like.
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OTHER FUNCTIONAL SECTORAL

AREAS CLASSIFICATION
The sectoral classification of accountancy
research into education or academe,
The functional classification of accountancy
commerce and industry, public practice, and
research is not mutually exclusive. Researches
government serves either as the subject of
that are dominant in one function are
research or the context wherein research
intertwined with other functions.
findings and recommendations will be useful.

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SECTORAL BASIC ACCOUNTANCY

CLASSIFICATION RESEARCH
Improving governance practices and compliance to
Basic accountancy researches are geared
financial reporting standards are research agenda
toward generation of professional associations,
for most entities in the commerce and industry.
and academic societies or academies. They
Quality assurance and ethical compliance are also
are usually conducted by educators and
current concerns of individuals in public
scholars with the results presented in technical
accountancy. The government sector is bent in
or professional journals
improving accountability and control systems.
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APPLIED ACCOUNTANCY APPLIED ACCOUNTANCY

RESEARCH RESEARCH
Applied accountancy researches are intended Applied accountancy researches can also be
to solve problems, clarify issues or gray areas, initiated by authoritative bodies and
and provide inputs to policy development and international funding institutions primarily to
decision-making. These are primarily provide inputs to regulation and legislation.
conducted by public accountancy firms as Usually, these are macro in scope and have
dictated by the needs encountered in the far-reaching effects in terms of persons and
delivery of professional services. institutions affected by the research outputs.
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ACCOUNTANCY RESEARCH AS A ACCOUNTANCY RESEARCH AS A

SYSTEM SYSTEM

Accountancy research, as a disciplinary activity, is The significant properties of a system, which

accountancy research also has, include:
also a system. This point of view is parallel with
the systems thinking that originated in the general –Hierarchy
systems theory in the natural sciences. A system is
–Environment
defined as a set of interacting elements or
assemblage of interdependent objects that form a –Boundary
unified or organized whole and function to achieve
predetermined goals –Relevance
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HIERARCHY HIERARCHY

The hierarchy of a system refers to the The suprasystem is the next higher level where
arrangement of its parts as determined by the the focal system operates while the subsystem
order of their importance to a particular purpose or consists of the component parts which the focal
goal. The concept of hierarchy allows for the system can directly influence. Accountancy
leveling of the components in a system. In other research (focal system) is basically within the
words, while accountancy research is the focal umbrella of social science research
system, it has both suprasystems and subsystems. (suprasystem).
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HIERARCHY OF ACCOUNTANCY RESEARCH

HIERARCHY SOCIAL SCIENCE RESEARCH
(Supra-system)

To a large extent, the trends and directions in social ACCOUNTANCY RESEARCH OTHER TYPES OF SOCIAL
(Focal system) SCIENCE RESEARCH

sciences influence the success of systematic change ACCOUNTANCY RESEARCH

(Focal system)
effort or track in accountancy research. The subsystem
FINANCIAL ACCOUNTING MANAGEMENT ACCOUNTING
RESEARCH RESEARCH
consists of the functional areas of accountancy
AUDITING RESEARCH TAX RESEARCH
research: financial accounting, management
OTHER ACCOUNTANCY OTHER ACCOUNTANCY
RESEARCHES
accounting, auditing, tax and other functional areas. RESEARCHES

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ENVIRONMENT ENVIRONMENT

The environment of a system refers to Generally, the environment is also regarded

entities (individuals, groups, and
as the publics of the systems. The
organizations) and other systems
(events, situations, artifacts) environment of accountancy research
surrounding the focal system which consists of the enabling, functional,
regularly or occasionally interact with
normative, and diffuse environments.
the focal system by way of exchange of
activities or other types of linkages.
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ENVIRONMENT
In accountancy research, this environment
consists of the regulatory bodies and
standard-setting organizations. Their
corresponding processes of legislation,
regulation, standard-setting, and policy-
making provide both rationale and
opportunities for the accountancy research
to thrive.
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BOUNDARIES
The boundaries make the system distinct from
other systems and from its environment. The
boundaries of a system are defined in terms of
its scope of functions and extent of coverage of
activities. The functional areas of accountancy
research are clearly defined to include financial
accounting, management accounting, auditing
and assurance, taxation, and management
consulting.
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ENVIRONMENT
The functional environment refers to entities
and systems that perform complementary
functions and services, supply the inputs, and
use the outputs of the focal system. These
include educational institutions, public
accountancy firms, business entities, and
government agencies. Educational institutions
are supposed to do a trilogy of functions:
instruction, research, and extension.
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BOUNDARIES
On the other hand, the activities cover the
four sectors of the profession: education or
academe, commerce and industry, public
practice, and government. These two criteria
provide boundaries with respect to the
conduct of accountancy research.
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RELEVANCE
Relevance is the ability of the system to
produce outputs that are needed as inputs
by other systems. Accountancy research
will lose relevance if it fails to listen and
respond to feedback from its environment.
Accountancy research, should be of value
to individuals, groups, organization and the
society at large.
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RELEVANCE
To achieve relevance, the person or entities engaged
in accountancy research should be sensitive and alert
to environmental signals and should treat these
signals as important inputs to improve quality of
service delivery. Feedbacks from the environment of a
system should also be used to make the necessary
internal adjustments in accountancy research and to
build up specific outputs that are useful and necessary.
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Landscape of Contemporary
Normative vs. Positive
Accountancy Research
• Normative
Seeks to develop and implement specific
accounting practices that the proponents
Normative Positive
argue to be superior to existing practices • ‘unscientific’ • Purely Scientific
• Positive • It is more of art • Empirical
focuses on the impact of accounting specially
on capital makers

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Normative vs. Positive Normative vs. Positive

Normative Positive Normative Positive
• How should leases be • Why do most firms • How should changing • Why do firms change
treated on the financial continue to allocate price levels be accounted auditors?
position? overhead charges to for?
performance centers • How should changes in • How have court
• Should replacement or • Why do firms change foreign exchange rates regulation and rulings
liquidation values be used accounting techniques? be accounted for by firms influenced accounting
in financial reporting with foreign interests? practice?

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Normative vs. Positive Normative vs. Positive

Normative Positive Normative Positive
• How should inventories • Why do firms continue to • Should interim financial
be valued? use historical cost statements be audited? • Why is fund accounting
depreciation different from corporate
accounting?
• What should be reported • Why are public • How should minority
accountancy firms • What impact has the
in the annual financial interests in subsidiaries
organized as CPA certification
statements? be treated in consolidated
partnerships? procedure had on the
statements?
practice on accounting
and on the research in
accounting?

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Trends in Accountancy Functional characterization

Research
• Contemporary accountancy research is strongly
interdisciplinary in orientation.
– Researches on capital markets with an
accountancy orientation often emerge at the
interface of finance, economics, and statistics.
– Studies on cost behaviors and organizational
performance with accountancy orientation are
conducted in tandem with insights and
approaches from social psychology and
organization studies.
of AR
• Accounting is part of a wider whole; it is an
integral component of an information market
on business enterprise and economy in which
it operates.
• To understand accounting, one needs to
understand the wider whole and its
implications for information requirements.

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Functional characterization Functional characterization

of AR of AR
In management accounting, the new direction is 3. Inform practitioners
towards practice-oriented research.
• Selto and Widener (2002) disclosed that 4. Increase the applicability of accounting
motivation among researchers toward this trend textbooks, coursework, and programs
include the desire to:
5. Satisfy personal taste
1. Gain increased understanding of why
organizations use certain techniques and 6. Increase consulting opportunities
practices
2. Gain increased understanding of how and
which techniques are used in practice impact
organizational performance

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MAJOR TOPICS AS INDICATIVE OF THE NEW TYPOLOGY OF RESEARCH

DIRECTION IN MANAGEMENT ACCOUNTING
RESEARCH THEMES
• Audit engagement • Corporate governance
• Accounting software • Effects of information • Audit education • Earnings quality
• Budgeting technology on internal
systems • Audit markets • Information processing
• Business process
improvement • Improving profits • Audit procedures • Internal auditing
• Cash management • Internal control • Audit report and going- • International regulation
• Compensation plans • Management concern opinion • Liability fraud and
• Cost accounting accounting practices • Audit review litigation
• Cost management • Outsourcing • Audit sampling • Profession and
• Effects of financial • Performance • Auditor behavior regulation
reporting on internal measurement
• Auditor’s judgment • Tax audit
systems • Research methods
• Shareholder value
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