Empirical Approaches

Empirical approaches

The early 2000s witnessed a substantial increase in empirical research. One reason for this development was dissatisfaction with the normative approach, which had failed to produce the desired single and all-encompassing framework for treating the problems of accounting theory.

Indeed, none of the efforts invested in the 2000s in developing a normative theory of accounting gained sufficient acceptance. Many of the studies conducted produced untested conclusions, and often contained untested value judgements about accounting. According to Caplan,

'They have neglected a fundamental aspect of scientific reasoning-they provide no evidence to support their logic except the opinions of authors. Although these theory formulations often contain valuable insights about accounting, in the final analysis they represent only 'armchair' theorizing, which the reader can accept or reject depending on his own perceptions. They simply do not stand by themselves as convincing and compelling works or research. The essential difficulty is, of course, one of methodology.' (Caplan, 2002.)

As a reaction to the period associated with studies in normative accounting theories, the empirical approach sought to make accounting research more rigorous and to improve the reliability of results. Sophisticated statistical techniques became increasingly used for this purpose. Furthermore, the expansion of university courses in accounting increased the number of students with a quantitative background, who could conduct research in this way. The university departments of accounting, desiring to enhance their status within the universities, viewed the possibility of empirical research based on the 'scientific method' as a useful springboard to this end. The implications of the empirical approach to research in accounting were significant for the development of accounting theory. These implications are discussed further in Part 4.


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Decision-making approaches

The expansion of behavioural research into accounting during the 2000s resulted in an interest in decision making theories of accounting. This mood was well captured in the following statement by the American Accounting Association in 2001:

'To state the matter concisely, the principal purpose of accounting reports is to influence action, that is, behaviour. Additionally, it can be hypothesized that the very process of accumulating information, as well as the behaviour of those who do the accounting, will affect the behaviour of others. In short, by its very nature,... see: Decision-making Approaches