Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

PREAMBLE: RESEARCH METHODS AND TECHNIQUES

A method1 is a systematic and orderly approach taken toward the collection and analysis of data
so that information can be obtained from those data. Data are raw, specific, meaningless, while
information is what you get when data have been arranged, queries resolved and questions
answered. The main available methods in accounting research are:
- archival method: based on written sources, concerning issues and events in the past;
- case-study: explores both past and present;
- survey: questions are directed at relatively large groups of people;
- field experiment: focus on the relative importance of some issues.
The approach might be qualitative or quantitative, given the research questions, method, and
researchers interests:
Quantitative approach
- identify variables and ignore the less
important ones;
- measure variables;
- generalize;
identify
relationships
(correlation,
determination) between variables;
- establish/verify general laws (hypothesis).

Qualitative approach
- understand a specific context/problem;
- observe complex situations and include
obvious but also detailed aspects
- identify peoples role, propose explanations;

A research technique is a particular, step-by-step procedure which is followed in order to gather

data, analyze them for the information they contain. These techniques refer to how to do
something rather than what youre doing, or why youre doing it.
- Semi-structured, open-ended techniques: the conversation, the individual interview, the
key informant interview, and the focus group;
- Fully-structured techniques: the structured questionnaire, the structured interview;
- Additional techniques: the repertory/analysis grid, attitude scaling, observation.

CHAPTER 2. POSITIVIST ACCOUNTING RESEARCH

The steps of a positivist research project generally include:
1. Research objectives/questions/problems formulation research aims and questions are
formulated as to reflect the nature of positivist (empirical, quantitative) research (generalizability,
constructs that can be measured, relationship between constructs
Example:
Bova and Pereira2 (2012) investigate the IFRS adoption in Kenya a country with limited
enforcement resources. Literature review indicates that the adoption of international accounting
standards, namely the IFRS, at the country level has sparked two contrasting, but not mutually
exclusive, viewpoints. One view is that IFRS engenders better reporting standards, and uniform
adoption allows for greater comparability. The upshot is that IFRS adoption will improve a firms
information environment and hence contribute toward a lower cost of capital. The alternative
view is that disclosure quality is shaped by political and economic forces, and hence higherquality accounting standards will not necessarily translate into higher quality reporting. (p. 83)

Jankowicz, A.D. (2000) - Business research projects, Ed. Thomson Learning, p. 209-211.
Bova, F., Pereira, R. (2012) The determinants and consequences of heterogeneous IFRS compliance levels following
mandatory IFRS adoption: Evidence from a developing country, Journal of International Accounting Research, vol.
11: 83-111
2

Prof. Nadia Albu

Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

Research questions (p. 84):
Why do firms comply with IFRS in a country where enforcement of the standards is lax?
Do firms reap capital market benefits to higher IFRS compliance levels in a country where enforcement of
the standards is lax?

2. (Optional) Research hypotheses formulation derived from prior literature and related to the
aim and research questions.
Example (cont., p. 90-92):
H1: Public firms, in comparison to private firms, will display greater IFRS compliance in a weak
enforcement environment.
H2: Foreign ownership will positively impact IFRS compliance in a weak enforcement environment.
H3: The level of IFRS compliance positively impacts trading volume in a weak enforcement environment.

3. Data collection
Example:

(Source: p. 100)
4. Data analysis
p. 98 difference in means and medians (H1)

p. 103 regression analysis (H2 and H3)

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Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

5. Research presentation
Example of methods: archival (financial statements, databases), survey, experiments.
Examples of techniques: structured questionnaires, spreadsheets derived from databases etc.

Prof. Nadia Albu

Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

Example: surveys
Surveys are based on mainly structured questions. Sample selection is one of the main issues.
Random sampling is usually deemed desirable, but it may not produce a sample that is either
representative or useful. Directed sampling obtained from specified groups might be preferred
in practice. The determination of the most appropriate sample size is largely a cost-benefit
exercise.
Variables and questions
There are four types of measurement scale:
- nominal - mutually exclusive, no ordering: male/female; manufacturing/other etc.;
- ordinal mutually exclusive, ordered: large/medium/small;
- interval - mutually exclusive, ordered, no ratio relationships exist: score (a score of 2 is
not double the size of a score of 1);
- ratio continuous data, where specific intervals have the same meaning, and relationship
exists: age, weight, monetary units etc.
Example: Ionacu et al. (2007)
Research design:
p. 170 research topic: to study the harmonization of Romanian accounting with international
regulations from the vantage point of a wider cost-benefit analysis.
p. 170 motivation: global (theory)/local (differences); motivator questions: is the new direction
imposed by the accounting regulator fitting a trend in the Romanian business environment? How
extensive was the effort that Romanian enterprises had to make? And particularly, is this effort
justified from a costbenefit point of view?
p. 170: research questions; method; techniques: we have surveyed the companies listed;
p. 184 The three main objectives pursued by our study are: (i) to identify the extent to which
Romanian companies feel the need for IAS/IFRS; (ii) to identify and evaluate the costs involved
in the harmonization of Romanian accounting with international regulations; and (iii) to capture
the perception of finance directors regarding the costs and benefits linked to the harmonization
process.
p. 185 hypotheses. Examples: Enterprises making recourse to foreign financial markets have
applied IAS/IFRS before they became mandatory through the Harmonization Regulations.; Large
enterprises incurred bigger IAS/IFRS implementation costs than the rest of the enterprises.
p. 186 questionnaire (e-mail) sent to 62 entities, 38 received (61% response rate)
p. 187 types of variables; Examples: nominal (advantages, types of costs, use of consultants);
ordinal (recourse to foreign markets, costs and benefits)
Types of questions and Excel spreadsheet preparation
- multiple-choice format: choose a single alternative from a list (the list might include Other,
please specify, or Dont know, but this would be difficult to be analyzed).
Examples:
1. How long is your experience with IFRS?
a) less than 5 years; b) between 5 and 10 years; c) more than 10 years.
2. The IFRS adoption was made mainly because of:
a) the legal requirement; b) the requirement of the parent company; c) the requirement of
investors.
3. Your company uses management accounting techniques:
a) for less than 3 years; b) for more than 3 years.
Excel: one column for the question
Examples:
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Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

Resp.
1
2

Q1
a
b

Q2
b
b

- free choice format: choose one or more alternatives from a list;

Examples:
1. Which of the following techniques are used in your firm?
a) costing techniques; b) budgets c) performance measurement
2. Which of the following costs have been incurred with the IFRS implementation?
a) training b) consultants c) IT systems d) auditing e) Others please specify.
Excel: one column for each alternative in the question. Assert 1 for each alternative selected, 0
otherwise
Examples:
Resp.
1
2

Q1
a
1
0

b
1
1

c
0
0

- ranked format to put all the alternatives into rank order;

Example:
1. Please rank the role of accountants in your firm in the following areas (from 1 the most
important to 4 the least important):
a) bookkeeping b) information for decision making c) partner in strategy implementation
Excel: one column for each part of the question. Insert the rank indicated by the respondent
Examples:
Resp.
1
2

Q1
a
1
2

b
2
1

c
3
3

- rating format assign points based on a scale;

Example:
1. Please assess on a 5-point Likert scale the importance of the accountants roles in your firm in
the following areas (1 unimportant; 5 - very important):
a) bookkeeping b) information for decision making c) partner in strategy implementation
Excel: one column for each part of the question. Insert the value indicated by the respondent
Examples:
Resp.
1
2

Q1
a
5
4

b
3
5

c
3
1

- open-ended format respond in his/her own words (rare in positive research)

Example:
1. Please comment on the role of accountants in your firm.
Length of the questionnaire
- it depends on objectives and topic;
- filling in should take a reasonable amount of time (app. 15-30);
- a reasonable number of questions is between 15 and 20;
- questions include and usually are divided into several categories (demographics, company,
techniques etc.).

Prof. Nadia Albu

Research methology in accounting, CAIG master program, 2015-2016 tutorials 3&4

Tips:
- alternate the types of questions;
- answer to a research question/objective with several questions;
- develop clear questions, use simple words, clarify the type of the question;
- the questions should allow for correlations, analysis (think about your variables and the
potential relationship when formulate questions);
- in the questions and sampling assure the stratification of your sample (various types of
companies, industries, sizes, types of respondents).
Additional types of sources of data for empirical research:
- databases (Amadeus, Thomson, Compustat etc.);
- hand-collected data from annual reports (in some cases it involves coding), websites etc.
Example: Chau and Gray (2010)3
This paper empirically examines the relationship between the extent of voluntary disclosure and
levels of family ownership and board independence including the influence of an independent
chairman, using hand-collected data on voluntary disclosure for a sample of 273 listed firms in
Hong Kong for the year 2002.
p. 99

Example of items coded (p. 107):

Chau, G., Gray, S.J. (2010) Family ownership, board independence and voluntary disclosure: Evidence from Hong
Kong, Journal of International Accounting, Auditing and Taxation, vol. 19: 93-109

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