There is anecdotal evidence to support the assertion that accounting research, or what is alleged to be research, is of little or no value to the practice of accounting, nor to the development of accounting as an academic discipline. The problem is not that efforts have not been made to conduct research, but rather there is a fundamental flaw in the accounting research process itself.
Tricker suggests that the research process can be understood using two models. One is a set of relationships which “feed-forward”. That is, a known theory suggests a hypothesis, which is tested through the accumulation of data. If the hypothesis is proven to be true, it is added to the body of knowledge, enhancing the legitimacy of the underlying theory. The second model is intended to provide “feed-back”. That is, the real world is observed and a model of it is proposed, based on known theory. Data is collected and processed, and the model is refined. When the model is consistent with the real world and known theory, it is added to the body of knowledge. These research models depend on the existence of known theory for their usefulness.
The central problem of accounting research is that there is no known theory to use as a reference for creating hypotheses or models to be empirically researched. The absence of theory can be seen in education, practice, and the research literature itself. Practitioners, for example, because of their training and lack of experience with and interest in research tend not to look to research findings to meet their professional needs. Accounting researchers, on the other hand, have created what appears to be a highly advanced research context which, in effect, is an environment dominated by sophisticated methodology, rather than theory. The research basically emulates the hard sciences, which makes its pursuit academically acceptable, but it lacks substance. This explains the failure of accounting research to improve accounting practice.
The report of the American Institute of Certified Public Accountants’ (AICPA’) Special Committee on Financial Reporting (Jenkin’s Committee) entitled Improving Financial Reporting—A Customer Focus (AICPA, 1994) provided the first empirical evidence that financial reporting was not effectively meeting user needs. Some of the problems are rooted in the failure of financial accounting to remain relevant. We assert that there has been an inadequate investment in substantive, appropriately-focused and structured research to identify the continuing and emerging needs of users of accounting information and to develop “products” to meet those needs.
This paper is based on two premises. The first is that accounting research is largely trivial, because of absence of referent theory for testing and evaluating accounting theorising. The second premise arises from the first. This is that accounting research is inadequately related to practitioner and user needs because of lack of meaningful and constructive communication between and among researchers, practitioners, and users.
The attributes of research suggested by Ijiri (1975) are not found in accounting research because of the lack of theory. There is a lack of novelty in research methods and questions; the conclusions and findings are not readily subjected to independent replication and, therefore, may not be defensible; and academic researchers may be prevented from sharing controversial findings as a result of self-protective tendencies of senior academics, some journal editors and reviewers.
We have suggested that the “decision usefulness” theory of accounting, on which GAAP is based, is a grounded theory. It is normative, based on a set of assumptions which have not been tested. Accounting, as a discipline, is not a science and as suggested by Goldratt, research results in this context are limited to correlation analyses. The use of sophisticated scientific research methodologies does not change the basic situation.
Research is an important aspect of the development of both education and practice. Accounting “education” in most universities has been committed to training new accountants for practice. The more intellectual dimensions related to questioning and the evaluation of purpose and alternatives have not been emphasised. The questions of interest to academic researchers have been constrained by the domain of GAAP and the biases of research publication editors and reviewers. These questions have tended not to be the questions of practitioners or users. We suggest that the university training process has inculcated in the practitioners and users a disrespect, and disregard, for intellectually motivated accounting research. Thus there are different agendas being served, or not being served, by accounting research.
We suggest that accounting be understood as a communication activity required by society and the real world. Accounting researchers, therefore, must look outside of the self-defined “decision usefulness” theory to other disciplines/sciences for referent theories related to communications, economics, philosophy, and quantum mechanics, for example. Researchers need to ask practitioners and users questions about issues of importance to them. The academic community must infuse the accounting curriculum with the intellectual demands and benefits of research as a socially desirable objective. The “gate keepers” of dissemination vehicles, for example, editors, reviewers, and dissertation supervisors, must be more tolerant and supportive of research that is novel and controversial.
Research must be considered in a complex environment of many constituencies with diverse interests and information needs. Each has its unique cognitive sets and world contexts. Accounting research, if it is to be relevant, must be tailored to a specific context, but not excluding appropriate interrelationships and interdependencies. Perhaps in time, some general theory of accounting as a communication process, capable of servicing a wide range of user needs with generally accepted and understood constructs and models will emerge. The theory will relate to communication of information to diverse users. It will be sufficiently robust to provide a basis for global communication of economic events that have occurred and will be linked logically to the decisions of today and tomorrow.
