Professional Research and Analysis for Accountants - Coursework Example

Name: Tutor: Title: Accounting Research Course: Date: Accounting Research Qualitative versus Quantitative Research In the process of participating in accounting research several methodologies are applicable. Qualitative as well as quantitative research approaches are used to engage in accounting research. In the recent past, qualitative research was largely applied in accounting process but its limitations have necessitated the use of quantitative research. The basis of qualitative research happens to be findings of available hypothesis and theory. This lead to its first major drawback; lack of practical application in research. Theories can be biased as they tend to falsify phenomenon meaning which can be clear through a set of observation. Hence, accounting phenomenon could be understood through the use of qualitative or quantitative research processes (Ahrens and Chapman, 2006). Qualitative research approach depends on obtainable research about accounting phenomenon. It is mainly founded on the existing concepts which have been developed and hence may be used in estimating accounting phenomenon with a high degree of confidence since this methodology is verifiable in nature. Moreover, qualitative research may be substituted with other sub-models or parameters to enhance its effectiveness. Although qualitative research is widely used in accounting research, it has numerous limitations. This methodology entails the use of several complexities and hence misunderstanding of any of these complexities can result in biasness and inaccuracy in accounting research. Qualitative research approach relies on existing theories of accounting touching on different phenomenon (Sale, Lohfeld and Brazil, 2002). In the accounting process, qualitative approach is mostly used in capital markets as capital research is carried out in form of event research and studies. Individuals or firms tend to rely on existing theories and research to determine how they can strategically position themselves in the capital markets and how they may influence the market effectiveness to their benefit. Moreover, firms and individuals use the qualitative approach to be able to effectively interpret the market dynamics. Capital markets trends can be analysed fully by use of existing theories and research. Qualitative research use theory with the main aim of measuring specific variables and determine association between several variables by using existing theories so as to come up with certain conclusions about different capital markets variables that are being tested (Ahrens and Chapman, 2006). On the other hand, quantitative approach entails setting up of several experiments with the aim of obtaining accurate data. Hence, quantitative research has its foundation on the authentication of information using a series of experiments. Generally, calculations are based on observations. The data obtained from a series of experiments which are carried out help in the practice of accounting for the fact that it provides calculation in terms of the link between various parameters and equations. Hence, the process of explaining particular phenomenon and their existence using quantitative research is based on facts. Quantitative statements are largely reliant on a set of observations and therefore it is this process of observation that obtains the same outcome over time. Therefore, quantitative research in accounting is not absolute in nature rather it is statistical. Quantitative approach involves an accounting phenomenon which is observed over time whereby statistical results are obtained (Sale, Lohfeld and Brazil, 2002). In contrast to qualitative research that engages in theory testing process, quantitative research carry out a set of experiments so as to come up with data which will help the researcher to correctly measure the research variables. Hence, quantitative research does not create stories during research. In accounting, quantitative research may be used in taxation process, such as when determining the effects of tax capitalization or the effect of prices of explicit taxes. Quantitative research can also be used in the auditing accounting process, whereby accounting books can be analysed for purposes of maximization of resources in a specific company and for accountability. In this case, accounting books are observed so as to obtain data and calculations (Bryman, 2007). In contrast to qualitative approach that uses existing theories to obtain data, quantitative approach uses the process of observation as well as analysis of variables under observation to obtain primary data. Hence, qualitative approaches to research are generally criticized for lack of scientific vigour and credibility evident in quantitative methods. Quantitative research is credited for attaining an up-to-date data because of its accuracy in the process of collecting data. It allows for such aspects as science in form of calculations to be engaged in the process of collecting data and data analysis. This means that all conclusions that are arrived at are based on concrete form of evidence which is collected by use of real life experiences (Bryman, 2007). In quantitative approach, analysis is expected to take place in a value-free context and depend on the measurement as well as inquiry of causal relationships between research variables. Quantitative approaches are unbiased, objective and value-neutral. They allow for reliability and validity. Usually, qualitative research operates from the premise that it is impossible to detach the researcher from the research and hence it is prone to biases. It is impossible to ensure reliability and validity in qualitative research as it relies on theories and theories are an outcome of a particular person, time and place; theories can be interpreted differently by different people, at different time and different place. Theory development is an individual as well as co-operative enterprise and hence qualitative research is not value-free. Qualitative research is not an academically rigorous approach as quantitative research (Bryman, 2007). Cross-sectional versus Longitudinal Research Cross-sectional research can increase our understandings of constructs and relations normally researched empirically. It can deepen our understanding by identifying cross-case patterns in certain issues which are entrenched in comprehensive case reports. For instance, cross-sectional research can identify and document deviation in analyses of practice-defined variables like balanced scorecards, activity-based costing or significant measurements of theory-defined variables through a social analysis like flexibility or goal difficulty. Cross-sectional approach presents researchers with an efficient method for capturing complex phenomena in a confined field. Moreover, it helps researchers to unearth reasons which may explain conflicting outcomes, uncertainties or tensions in previous study. Cross-sectional approaches are relevant where the sophistication of the phenomena to be studied and the significance of circumstantial issues are reduced. Cross-sectional research is mostly employed by marketing researchers, especially in conducting capital market research (Lillis and Mundy, 2005). Cross-sectional research is limited in reliability and breadth as a result of the researcher’s influence when collecting data, lack of generalizability and lack of randomness. Cross-sectional research cannot produce statistically valid inferences when used to analyse models whose parameters vary over time. Apart from the estimation failing to detect the true model parameters, the estimates obtained might not be efficient. Hence, cross-sectional research cannot be used to estimate time-varying parameters. Since cross-sectional researches are conducted by one respondent during one point in time, it is prone to potential bias and hence longitudinal research is seen as the solution as temporal separation decreases the cognitive openness of responses to interpreters collected at a previous time and this decreases the probability that these previous responses will influence later responses to result variables (Lillis and Mundy, 2005). Cross-sectional approach relies on single year data and thus can fail to identify the true nature of the phenomenon under study. Moreover, relying on a single year data makes it very difficult for strategy researcher in accounting process to identify any trend effects in their research. Furthermore, cross-sectional approach has been criticized for its failure to determine the accurate causal relationship and the inferences about the importance of the descriptive variables may be biased. The inability of the cross-sectional research to account for tie-varying effects makes it very difficult to understand the exact nature of the relationship being studied. Depending on single year information for analysing and making inferences regarding a theoretical relationship can be very problematic as systematic year-to-year differences radically change the outcomes depending on the period of investigation (Lillis and Mundy, 2005). The advantage of cross-sectional research is that it enables the researcher to compare numerous different variables at a single point in time. However, it does not provide accurate data regarding cause-and-effect relationships. The similarity between cross-sectional and longitudinal researches is that they are both observational in nature. But longitudinal research involves several observations of the same variables under study over time, at times lasting many years. As a result of the limitations of cross-sectional research, accounting researchers are now increasingly using longitudinal approaches in their accounting process. Longitudinal approaches do overcome the shortcomings of cross-sectional approach as it can be effectively used to analyse for variance in models parameters over time (Salterio, 2010). Longitudinal research can be defined as the analyses of change over time. It therefore entails observing how a certain practice changes over a period of time. Moreover, it can determine such trends through comparing the outcomes of studies which are carried out in different years. In contrast to cross-sectional approach, longitudinal research does not rely on a single year data to make its inferences. Longitudinal approaches to research help accounting researchers to identify and analyse differences and trends among persons, such as differences in salary among employees. In longitudinal research, the researcher observes the variables under study so as to collect data without any kind of modifications (Godfrey, Hodgson and Holmes, 2003). Longitudinal research can be used by stockholders in the accounting process to make financial predictions since financial investments are reliant on of particular factors. The different factors in financial investment are associated with one another and dependent on one another for several reasons. Longitudinal research forms a critical part in the analyses of the several correlation relationships between variables under study to determine the level of correlations. For example, it can be used to determine the correlation between organization climate and worker satisfaction (Godfrey, Hodgson and Holmes, 2003). While longitudinal research is desirable, it also has its own limitations too. Although it reveals changes, it gives us little insight as to why or how the change occurred. Longitudinal researches are very costly as they involve repeated measure of same variable under study over time. Longitudinal research also requires complex statistical techniques as the repeated interpretations are usually significantly correlated. To obtain valid inferences, correlation needs to be accounted for. The problem with longitudinal research is that if the investigator finds more than two variables which are correlated with each other, it becomes very difficult to determine which causes the other. It is always critical to remember that correlation does not always mean causation. Conducting a longitudinal research need a lot of time and hence may not suitable for marketing researchers faced with limited time. Hence, longitudinal research may be easier to advocate compared to implementing. Longitudinal researches are raise several potential problems like confounds as a result of intervening events and a decrease in sample size as a result of respondent attrition (Salterio, 2010). Bibliography Ahrens, T. and Chapman, C.S. (2006) Doing qualitative research in management accounting: positioning data to contribute to theory, Accounting, Organizations and Society, 31, 819-841. Bryman, A. (2007) Barriers to integrating quantitative and qualitative research, Journal of Mixed Methods Research, 1, 8-22. Godfrey, J, A Hodgson and S Holmes, 2003, Accounting Theory, (5 ed), Milton, John Wiley & Sons Australia Ltd. Lillis, A.M. and Mundy, J. (2005) Cross-sectional field studies in management accounting research – closing the gap between surveys and case studies, Journal of Management Accounting Research, 17, 119-141. Sale, J.E., Lohfeld, L.H. and Brazil, K. (2002) Revisiting the quantitative-qualitative debate: implications for mixed methods research, Quality and Quantity, 36, 43-53. Salterio, S. 2010, Contemporary Accounting Research: 2010 Editor’s report. Available at http://www.caaa.ca/CAR/EditorRpt/index.html Read More