Research Method and Methodology in Finance and Accounting

Topics: Empiricism, Scientific method, Social sciences Pages: 39 (13049 words) Published: May 8, 2013
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Research Method and Methodology in Finance and Accounting
Second Edition

Bob Ryan Robert W. Scapens Michael Theobold

Australia . Canada . Mexico . Singapore . Spain . United Kingdom . United States

Licensed to: iChapters User

Research Method and Methodology in Finance and Accounting Copyright © Bob Ryan, Robert W. Scapens and Michael Theobold 2002

_______________________________________________________________________ The text of this publication, or any part thereof, may not be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, storage in an information retrieval system, or otherwise, without prior permission of the publisher. While the publisher has taken all reasonable care in the preparation of this book the publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions from the book or the consequences thereof. Products and services that are referred to in this book may be either trademarks and/or registered trademarks of their respective owners. The publisher and author/s make no claim to these trademarks. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library _______________________________________________________________________ ISBN: 978-1-86152-881-0 First edition published by Academic Press Limited 1992

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The philosophy of financial research

Research is a process of intellectual discovery, which has the potential to transform our knowledge and understanding of the world around us. In this chapter we examine some of the fundamental assumptions upon which research in the financial disciplines is based. These disciplines, like most others within the social sciences, are methodologically highly diverse. Scholars in these disciplines come from a variety of different backgrounds and sometimes make implicit but different methodological assumptions about the nature of reality, the role of theory and the significance of empirical experimentation. Part of our task in this chapter is to make clear what those assumptions are and how they influence the research process. We start our discussions about research at a somewhat abstract level but, as we will demonstrate in later chapters, the issues we raise here condition much of what we have to say later about such questions as: . What are the different assumptions about the nature of financial reality that

inform research?
. What is the role of theory in acquiring knowledge about financial and accounting

. How does research progress?

Given that research is fundamentally about the discovery, interpretation and communication of new knowledge there is still little agreement about the source of knowledge itself. The financial disciplines have, over the last 40 years, provided a new intellectual arena for some very old debates, and our purpose here is to discuss the range of issues and debates, which are of importance to the practising researcher. To illustrate the methodological issues presented by financial research, consider two studies recently published in the accounting literature. The first by Maines and McDaniel (2000) is typical of the type of article found in the mainstream US literature and examines the effect of a disclosure requirement on the processing of financial information by investors. This article draws upon prior work in psychology (Hogarth, 1987), which asserts that performance–assessment judgments are formed by individuals from a linear combination of cues. On the basis of this...
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