Relationship between Accounting and Economics - Research Proposal Example

Relationship between Accounting and Economics Couse: College: Relationship between Accounting and Economics Purpose and Reasons The purpose is to uncover the inevitable and reciprocal relationship between Accounting and Economics disciplines. The interconnectedness between economics is viewed as a very complex with regard to the existence of variety of dissenting arguments by scholars. The existence of long standing traditional economic theories have been developed to help conceptualize and theorize Accounting in economic perspective (Chambers 2006, p. 16). The existence of similarities ands difference in the two subjects are the basis upon which the inspiration of the researcher to undertake the research is embedded. The economic terms have been used as the benchmarks against which Accounting practice adequacy is evaluated and aided in the designing the necessary recommendation against which Accounting practice can be reformed. Similarly, accounting practices, development and procedures have been used to reform Economic through operationalizing economic understanding and conceptualization. On many researches previously conducted on this topic, researchers have found it challenging making conclusions based on what type and implications to each discipline noted relationship portrays. The analysis of how the two disciplines treat cost and profit spent and earned by firms is an example of how accounting aids Economist in dealing with such analysis. The conventional traditional notion puts Economics as a superior discipline over Accounting but there is a need to engage in the thorough research to follow dissent away from this misplaced notion. There should be a clear and precise understanding on how significant each discipline is to each other, for instance many countries in Europe have designed and established functions in Economics that are solely served by Accounting. Despite these common knowledge, in essence complexity in relating Economics and Accounting is still far from synthesized. The paper will thus help propose a framework upon which the similarities and difference if the two disciplines will be unearthed and fact-based recommendations designed and communicated to the relevant stakeholders. The research findings will thus aid in putting straight a clear position on what particular areas Economist and Accountants are beneficial to each other and help break the traditional notion of Economist superiority. Research Project The research project is to undertake an in-depth investigation to uncover the reciprocal interrelationship between Accounting and Economics practices, development and operationalization. Despite the existence of previously undertaken researches, mismatch has been noted as the findings tend to create a superiority notion to the Economics over Accounting. Besides, the inevitable and reciprocal relationships between the two disciplines have not been clearly uncovered despite the fact the few relationship in practices such as evaluation of cost, capital, profits are treated (Hopper 2012, p. 16). It is upon these shocking complexities the researcher seeks to find a clear position and ground to showcase to what significant there is a convergence and divergence in practices between the two disciplines. Research Aim To investigate the existence of a reciprocal relationship between Accounting and Economies disciplines. Research Questions To what extent is accounting and economic practices beneficial to each other? What are the similarities and difference that existence in economic and accounting practices with respect to the treatment of capital, cost, profit, assets and liabilities? How does the efficiency in the allocation of scarce resources achieved in both disciplines? Methodology The research design to be used here will be a framework where investigations will be conducted based on the questionnaires and interviews as well as review of the previously conducted researches. The investigator will send questionnaire to both selected accountants and economist to gauge their positions. Theories will be evaluated through secondary review so as to uncover the previous positions held by other researchers and determine whether the presented recommendations have been implemented. The random stratification will aid in obtaining the sample documents to be reviewed and persons to be interviewed. The regression and correlation analysis will be used to identify the relationships between the two disciplines. Analysis of the correlation coefficient will determine the reciprocal relationship between the two disciplines (Kinney & Raiborn 2013, p. 87). Regression analysis will form the analytical framework upon which the review of the secondary data will be undertaken in order help communicate the findings to the stakeholders. The assumptions and principles that are made within the two discipline will be analyzed to determine the state of affairs. The data obtained through the questionnaires and interviewed will be cleaned and subjected to the analytical framework (Smith 2011, p. 12). Areas of similarities and differences between with respect to a particular practice undertaken will aid in drawing a conclusion and further recommendations. The paper will be focused on how the two discipline each treat assets and liabilities as well as capital to showcase the similarities and differences in operationalization (Heylen, Ooghe & Vander 2000, p. 19). Facts on how each discipline determines its allocation choice with regard to the scarce resources will be presented and subjected to in-depth analysis to help the researcher draw distinctions between Economic and Accounting and to earmark at the same time the inevitable close interconnectedness between the disciplines. Core Issues for investigation The core issues to be investigated will start from obtaining the different perspective on Accounting and Economics Principles. The clear meaning of each discipline needs to be unearthed as many people have practices economics issues but do not in essence realize that those undertakings were more of accounting than economics (Heylen, Ooghe & Vander 2000, p. 154). The principles of Accounting such as timelines, relevance, reliability, and report or information consistency will be used as the benchmarks to distinguish it from economics. The analysis of formats taken by financial statements such as balance and its component will be analyzed. Treatment of assets, costs, profits liabilities and scarce resource allocation in accounting and economics will be evaluated (Frontiers of business, management and economics: An interdisciplinary. 2013, p. 38). On the other hand, thorough investigation will be executed to ascertain the true meaning of economic amongst economist and account. This is because accountants at some time overstretch to perform functions otherwise performed by economist without realizing. Such findings will be important in gauging the understanding of each discipline meaning and thus will aid in distinguish particular concepts and practices in each circumstance. In so doing it would be easier to understand the areas of similarities and differences in the two disciplines (Hermanson, Edwards & Salmonson 1987, p. 105). Another salient issue to be derived from economist is their core mandate and how they deal with variables and how the numerous assumptions used are relevant. Other Related issues Other issues to be evaluated will be based on the shared formulae on how to arrive at some decisions. To economist computation of both future values and present values aid in determining the viability of the project. Accounting practices have also utilized same methods in communicating their recommendations. Analysis and Evaluative methods The noted relationships will be uncovered by the determination of correlation coefficient. The regression analysis will help us determine the reciprocal relationship between accounting and economics both in terms of operationalization and practice (Christensen & Feltham 2008, p. 143). The analysis of the accounting financial statements based on the observation on how the assets, capital and liabilities are dealt with will help use determine the difference in how capital is treated (Chapman, Hopwood & Shields 2009, p. 19). The manner on how both discipline arrive at allocation of scarce resources will help us determine the similarities in practice. Conducting regression and correlation analysis stands as the analytical model that will help relate the two disciplines. Outcomes It is noted that both disciplines share a lot in terms of practices. Economist are concerned by the allocation of scarce resources in production to maximize their profits. Accounting has enabled economist to use its principles and concepts in determining the net present and future values in order to venture into a particular investment (Holgate 2006, p. 165). Economist are noted to use assumptions such as rational choice which is unrealistic to Accountants but there is similar as they agree on the profit and cost treatment (Chapman, Hopwood & Shields 2007, p. 176). Through accounting, economist can determine what cost and capital to inject in a particular project which is supported by computing future and present values, concepts from accounting. They two disciplines recognize the need to allocate scarce resource on particular projects only upon evaluating project feasibility (National Research Council (U.S.). 2010, p. 18). Accounting principles help in control of the cash inflows and outflows and keep track of debtors and creditors. This function is beneficial to economist in the determination of the scarce resources to projects. It is noted that the reason for the complexities in understanding the relationships between economic and accounting is the expansive assumptions used uneconomic while accountants would prefer principles driven practices (Agtarap-San 2007, p. 111). Another difference is noted in the preparation and analysis understanding of financial statements. 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