1.

Meaning of Accountancy Research

2. Accountancy Research as a System
3. Landscape of Contemporary Accountancy
Research
4. Motivations for Accountancy Research
 Accountancy Research
- systematic process of collecting & analyzing
information in order to increase one’s
understanding of a professional accountant’s
functions & contribute to the solution of
problems besetting the practice of the
profession
- Can be categorized into:
1. Functional classification
2. Sectoral classification
 Functional Classification
- Accountancy research is classified by
functional area:
1. Financial accounting
2. Management accounting
3. Auditing and assurance
4. Tax
5. Other functional areas
Financial Accounting Research
- Primarily studies collection, recording &
reporting of financial info about an entity
- Looks into effect of economic events on
process of summarizing, analyzing, verifying,
& reporting standardized financial info, & on
effects of reported info on economic events
Management Accounting Research
- systematic inquiry on the provision & use of
acctg. info to mgrs.
- could look at impact of org. change on acctg.
practices, or interaction between mgt. acctg.
techniques & functional strategies (e.g.,
TQM)
Auditing Research
- Examines auditors’ process of gathering &
evaluating evidence on assertions about
economic actions & events
- Looks into means of communicating audit
results, quality of audit services & value-
adding functions of audit
- Expandable to include assurance &
attestation services
Tax Research
- Has a broad scope; can be at macro or micro level
- Macro level: can be an analysis involving:
- Assessment of taxation proposals
- Evaluation of fiscal policy issues
- Other revenue-raising powers of gov’t.
- Micro or organizational level: can be on:
- income tax expense reported for financial acctg.
- Corporate tax avoidance
- Tax-related decisions on investment, capital structure,
org. form
- Taxes & asset pricing
Other Functional Areas of Accountancy
- Relate to specific functions, e.g,:
- Fraud prevention & investigation
- Corporate governance
- Internal auditing
- Risk management
- Sustainability reporting
Sectoral Classification
- refers to either the subject of the research, or
the context wherein research findings &
recommendations will be useful
- includes:
1. Education/academe
2. Commerce & industry
3. Public practice
4. Government
Researches in Other Disciplines
- may cut across accountancy profession:
Research Type Description Link to Accountancy
Social Research Answers questions re society, May deal w/ capital markets,
its structure & processes social enterprises w/ links to
financial reporting & controls
Social auditing: blend of
social science & auditing
Business Process of conducting inquiry May require financial info
Research on a mgt. dilemma
Marketing Processing of info to improve May require costing & pricing
Research decision making & solve
problems in mktg.
Basic & Applied Accountancy Research
 Basic accountancy research:
 geared towards knowledge generation
 usually conducted by educators & scholars
 research reports are published in journals
 Applied accountancy research:
 Intended to solve problems, clarify issues/gray
areas, & provide inputs to policy development &
decision-making
 Primarily conducted by public accountancy firms
(for internal or client’s needs)
 Can be initiated by authoritative bodies & funding
institutions for regulation & legislation purposes
 Examples: feasibility studies; program/project
evaluation; documentation of best practices, etc.
  Accountancy research: falls under category of
social sciences
 Landscape characterized by:
1. Research perspectives
2. Trends
3. Functional thrusts & directions
Perspectives in Accountancy Research
- Accountancy research started out using the
normative approach: it seeks to develop &
implement specific acctg. practices deemed
superior to existing ones
- Subsequently, there was a shift towards
positive approach: it’s analytical & its focus is
on impact of acctg.
Sample Normative & Positive Research
Questions
Normative Questions Positive Questions
1. How should leases be treated on 1. Why do most firms continue to
the statement of financial position? allocate overhead charges to
performance centers?

2. Should replacement or liquidation 2. How have court regulation &

values be used in financial reporting? rulings influenced accounting
practice?

3. What should be reported in the 3. Why are public accountancy firms

annual financial statements? organized as partnerships?
 Other postpositive perspectives applicable to
accountancy research:
1. Interpretive
2. Criticalist
3. Postmodernist
Interpretive Accountancy Research
- Seeks to understand social nature of accountancy
practice
- Seeks to explain actions/behaviors of individuals &
groups & human interactions in line w/ functioning of
different regulatory & policy directions in the profession
- Considers how accountancy practice could be modified
to take into account social & environmental aspects of
org’s undertakings
- Possible subjects of research:
- - Lobbying of audit firms on standard-setting
- - Functioning of mgt. acctg. & control systems amidst
financial scandals
Critical Accountancy Research
- Provides a position on the status quo
- Focuses on role of accountancy in sustaining
privileged position of individuals controlling
certain resources while stifling access & voice of
those w/o capital
- Aims to stimulate progressive change
- Centers on broader level of society
- Possible subjects of research:
- Functioning of audit & its role in financial failures
- Move to fair value accounting
Interpretive vs. Critical Approach
INTERPRETIVE CRITICAL
Similarity Subjective value of social world
Differences Focuses more on how Focuses on explaining
accountancy is socially w/c ideological pressure
constructed & how is influential & w/c group
perceptions preserve the interest is met by
status quo accountancy regulations
Takes a neutral stand Takes a particular
position on research
nature & purpose & its
political/societal
implications
Postmodern Accountancy Research
- Argues that everyone constructs his/her own reality & it’s
not possible to compare various realities due to absence of
independent criteria for comparison purposes
- Believes that problems can only be addressed through
discourse & communication
- Encourages debunking of old systems & theories, &
creates new ones
- Suggests that accountancy techniques be reexamined &
assessed over time
- Possible subjects of research:
- Triple-entry bookkeeping
- Suitability of public disclosure of internal control deficiencies of
publicly-listed companies
Trends in Accountancy Research
 Interdisciplinary orientation
 Evolving, dynamic
 Studies consequences & modes of financial
acctg’s functioning in wider institutional
setting/wider whole (not only financial acctg.
itself)
 In mgt.acctg.: direction is practice-oriented
research
 Major topics indicative of new directions in mgt.
acctg. research:
 Acctg. software
 Budgeting
 Business process improvement
 Cash management
 Compensation plans
 Cost accounting
 Cost management
 Effects of financial reporting on internal systems
 Effects of information technology on internal
systems
 Improving profits
 Internal control
 Management acctg. practices
 Outsourcing
 Performance measurement
 Research methods
 Shareholder value
 Both financial & mgt. acctg. have to cope w/ a
more complex commercial & institutional
environment
 Profound changes in profession: diminishing
scope of service over time
 Research themes in auditing:
 Audit engagement
 Audit education
 Audit markets
 Audit procedures
 Audit report & going-concern opinion
 Audit review
 Audit sampling
 Auditor behavior
 Auditor’s judgment
 Corporate governance
 Earnings quality
 Information processing
 Internal auditing
 International regulation
 Liability fraud and litigation
 Profession and regulation
 Tax audit
 Contemporary accountancy research:
 Descriptive
 Explanatory
 Prescriptive
 Alternative accountancy research methods:
1. Analytical modeling: tools of economics, mathematics, &
statistics considered in examining issues
2. Behavioral experimentation: can be used in areas related
to judgments & decisions, specifically in auditing
3. Evaluation research: may focus on assumptions used,
incentives offered & extent of restrictions imposed in
different functional areas of accountancy
 Not much progress in the Philippines (unlike in the US and
many European countries): still in its infancy stage
 Not much attention is given by academic institutions &
practitioners
 CHED: mandated to enhance research functions of HEIs
 In accountancy education: requirement for research
embodied in CHED MO #3, 2007 series, w/c requires
accountancy schools to:
 Have competent & qualified research staff
 Undertake research
 Support faculty & students in the conduct of research
 Revised policies in said MO intend to adopt locally the
International Accounting Education Standards, to keep
Phil.graduates competitive in the global workplace