Current Trends and Concepts in Accounting Research - Case Study Example

Current Trends and Concepts in Accounting Research Introduction This paper reviews some of the recent literature that addresses currently popular ideas in accounting research. As recently as four years ago, some observers worried about a trend towards greater specialisation in accounting research, a departure from the interdisciplinary approach favoured since the 1980’s. Areas of focus such as in public sector accounting, organisational change management, and accounting history are, on the one hand, developing greater bodies of specific knowledge, but on the other hand, present the risk of fragmenting the greater “community” of accounting research into narrow and not very well connected parts. (Guthrie & Parker, 2006, p. 6 & 13) In the past two years, however, there has been a growing interest in areas of accounting research that are difficult to ascribe to the specialisation trend: Qualitative Accounting Research and Interpretive Accounting Research. The differences between the two are subtle but significant; interpretive research could be said to be more rigorous in its approach than purely qualitative methodology, but either is a marked departure from the purely analytical, quantitative, “classical” approach to accounting research. The research literature reviewed here summarises the key concepts, advantages and criticisms of the two approaches. Qualitative Research Qualitative research, according to its advocates, can be a much more accurate and realistic approach to studying a research problem, because it is based in a real-world context. Researchers might prefer the approach to quantitative research for a number of reasons. It can provide insights into empirical phenomena discovered through quantitative research by examining their applications in real-world circumstances, and explain the causes and relationships of statistical variables. (Northcott & Doolin, 2008, p. 6) The implication is that the opposite may be true as well; in particular applications or business sectors, specific accounting or management practises may not at first clearly suggest the quantitative approach that should be used to study them, and so a case study might be the best place to start. This is also part of the rationale for interpretive research, discussed in the next section. The justification commonly given in the literature for the qualitative research approach is that “...the organizational reality we usually encounter does not match the implicit ontological simplifications of the textbook view.” (Vaivio, 2008, p. 66) Quantitative research is better at establishing broad contexts, such as demographics, but sometimes does not describe the cause and effect of particular variables and scenarios within a broad context. (Jeacle, 2009, p. 132) Since organisations are unavoidably subject to social, political, and cultural influences, it is necessary to consider the organisational context in which the phenomenon to be studied is occurring in order to identify the relevant “external” theory which may apply. (Durocher, 2009, p. 144) Conversely, a clear understanding of the organisational dynamic and environment is necessary to provide proper examples and justification for external theories. Qualitative methodology avoids the difficulties that can arise in properly understanding a particular research problem through strictly quantitative means because it does not follow any of the three limiting “views” of the latter: the “textbook view,” which regards accounting as strictly functional; the “economics view,” which reduces the measurement of the impact and results of accounting function to strictly economic effects; and the “consultancy view,” which provides normative, prescriptive solutions to accounting management problems. (Vaivio, 2008, p. 65) Intuitively, the rationale for qualitative research makes sense. Organisations do not fit a neat template or textbook example. Boundaries between and within organisations may not be clear or may change rapidly, and different parts of the organisation or even individuals within it may have different motivations and goals. Also, as Vaivio (2008, p. 66) points out, organisations sometimes “act before they think,” simply trying a particular course of action in order to discover what their objectives are rather than applying a theoretical or normative solution first. That also points out another shortcoming in the quantitative “textbook view,” which seems to assume that organisations adapt to their environments without much regard for how they can actually influence their own environments, intentionally or not. Qualitative research does have challenges, however, and the literature discusses three significant ones which all in some way have an impact on the credibility of the research results. The first challenge is establishing validity of the methodology in qualitative research. Quantitative empirical research is more standardised in its methods, and one risk that qualitative researchers face is falling into a trap of focusing on the debate to justify particular methodological approaches rather than doing any actual research. (Modell & Humphrey, 2008, p. 98) If the methodology is suspect, the findings will be as well. Part of the problem of acceptable methodology arises from the phenomenon of “reflexivity” in research, in which that being observed is unavoidably affected by the observer. Qualitative research is an exercise in “reconstruction of reality,” as explained by Khalid. (2009, p. 82) The data gathered by the researcher through whatever means – simple observation, interviews, surveys – must be interpreted and reconstructed into a representation of reality for the audience; in effect, the researcher is making claims on behalf of the people and data he is representing, and must be aware that his own personal knowledge and biases can affect his interpretations. Moreover, the course of the research adds to knowledge and biases and changes them as the research progresses. (Khalid, 2009, pp. 82-83, 92) This ‘reflexivity,’ the mutual effects of the researcher and that being researched, can be defined in two ways. First is personal reflexivity, which relates to the researcher’s values, background, experiences and social identity. The second is epistemological reflexivity, “which assesses the researcher’s assumptions of the social world and how these assumptions influence the findings.” (Khalid, 2009, p. 84) In Khalid’s view, an understanding of these influences, particularly the latter, is important for the researcher to allow him to continually test his methods and conclusions and avoid unduly influencing his findings. The final challenge discussed in the literature is one that does not receive much attention in debates over methodology, and that is the matter of presentation and literary aesthetics in written reports. The idea of reflexivity and the relationship between the researcher, the subject of the research, and the audience is examined by Baxter and Chua (2008). They argue that the standardised criteria that applies to “positivist mainstream” quantitative research is missing from qualitative research, and that correct literary styling – for which, unfortunately, there are no hard-and-fast rules because of the changing nature of the researcher, subject, and audience relationships – is important to establish a sense of validity in the results. (Modell & Humphrey, 2008, pp. 96-97) Thus the literature examining qualitative research can lead us to draw a number of conclusions. Qualitative research can be a valuable approach to research problems for which established theory does not provide obvious clues, in areas of narrow focus such as a particular kind of organisation or management accounting application, or where the researcher’s main interest is relating theory to real-world practise. Qualitative research, however, seems to fall under some suspicion because methodology is not necessarily fixed and can be questioned; the only frame of reference for establishing any sort of standards in methodology is prior work, which may be of such wide variety as to prevent a fair comparison of approaches. As a consequence, qualitative research can easily become more concerned with the approach rather than the results. To help avoid questions of validity, recognising and constantly re-evaluating the social aspects of qualitative research – the interaction of the researcher with the subject and the audience – is necessary to ensure that the results presented are accurate and relevant. Grounded Theory in Interpretive Research The second research concept receiving much examination in recent literature is Interpretive Research, which is similar to qualitative research in terms of focusing on real-world situations, but is a little more formalised in its methodological approach than purely qualitative research. Like qualitative research, interpretive research has it focus on “the everyday life of organisations as they exist ‘on the ground’; rather than exploring abstract problems and providing artificial solutions, ‘sitting at a distance’ and using some remote lens held by a ‘detached’ researcher.” (Elharidy, Nicholson & Scapens, 2008, p. 141) One apparent difference between research described as “interpretive” and that described as “qualitative” is that the latter is more likely to address a single subject, whereas interpretive research is more hermeneutic in nature, comparing several different examples of reality to reconstruct a single example. This concept of ‘working backwards’ is the underlying idea behind Grounded Theory, which is the main idea that sets interpretive research apart from qualitative research. (Elharidy, Nicholson & Scapens, 2008, pp. 141-143) Grounded Theory means that instead of starting with an established theory and testing it against data which is discovered through research, the researcher starts with the data and looks for a theory to emerge from the relationships within it. The research process is characterised by three questions to be asked continually: What produced the data or what does the data represent? What category or descriptive property can be ascribed to the data? What is happening, or what is the effect of the data? From these questions, the appropriate theoretical framework to describe the subject of the research should emerge. (von Alberti-Alhtaybat & Al-Htaybat, 2010, p. 211) The interpretive and grounded theory concepts are not without their critics, however. The same problem of the researcher’s relationship to that which is being researched in qualitative methodology can also affect the interpretive approach. The researcher still has his prior theoretical knowledge, personal background and biases, and experience, and cannot take a purely “open-minded” stance in his research. (Gurd, 2008, p. 132) One way this can be manifested is in an ostensive approach to the research, which relates to the way in which the observed and collected data may be sorted and categorised by the researcher. For example, in deciding on categories in which to place data, the researcher might refer to Contingency Theory to define certain observations; Contingency Theory provides distinct archetypes of strategy management behaviour, and thus may be a useful means of describing what the researcher sees. (Boedker, 2010, p. 596) The problem is that as an established, pre-existing theory, Contingency Theory is normative, and assumes that strategy is stable, whereas in the real world, as discussed above in relation to qualitative research, strategy and behaviour is fluid. With specific regard to accounting, moreover, Contingency Theory assumes a certain linear relationship between strategy and accounting, wherein the objective is to predict the accounting controls needed to achieve particular strategy ideas. (Ibid., pp. 596-597) The one solution suggested for avoiding the potential for fitting the data into wrong categories and thereby reaching the wrong conclusions about it is to maintain a reflexive account of the research, assessing the researcher’s pre-conceived ideas and prior knowledge and continually re-evaluating them as they change throughout the research process. (Gurd, 2008, p. 132) Conclusion While there is still great interest in the specialisation of accounting research noted with some concern by Guthrie and Parker in 2006, the more recent trend in accounting research seems to be toward the more interdisciplinary approaches of qualitative and interpretive research. While these can be valuable additions to the body of knowledge because of their “real-world” focus, as the literature explains, they have their own unique challenges and are subject to questions of validity and broad application if they are not done wisely with regard to their potential risks. The conclusion that can perhaps be drawn from this is that neither strictly quantitative nor qualitative research should be judged to be a better approach; which one is appropriate is completely determined by the context of the research, and it may be that in many research activities, both approaches should be applied. References von Alberti-Alhtaybat, L., and Al-Htaybat, K. 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