Accounting Research

Pertemuan 15

pnm

Dari berbagai sumber, tidak untuk disebarluaskan

Source: Wakhid Slamet Ciptono (2013)
Source: Wakhid Slamet Ciptono (2013)
Source: Wakhid Slamet Ciptono (2013)
Wakhid Slamet Ciptono (2013)
Source: Wakhid Slamet Ciptono (2013)
3 Research Methods:

Mix
Methods
Quantitative Qualitative
(Quan +
Qual)
• Quantitative method:
• using statistical formulas in identifying and processing variables that arise from the
problem to be answered.

• Qualitative method:
using narration and description of the variables to be discussed without having to
take measurements.

• Appropriate to be used for research topics where it is difficult to

determine quantitative indicators or measure variables, data is not yet
available, and theory has not been established.

• Mix methods (quantity + cauldron) = triangulation: combining quantitative

and qualitative methods.
SOURCE: Mixed Methods Seminar: “Transforming, triangulating, and quantitising data –
How CAQDAS supports data integration”, 2010

Wakhid Slamet Ciptono (2013)

Accounting Research
• Is an effort made to find the truth in accounting area

• Accounting research results are a link between social phenomena in the

accounting field and the structure of accounting theory.

• Social phenomena are poured in the form of scientific statements so that they
become theories.

• Theory is used to explain about:

• Existing truth (descriptive)
• Support existing theory (justification)
• Denying the old truth (refute)
• Generating a new theory
Paradigms ??
• Paradigm (Belkaoui 1985):
It is a fundamental characteristic of something that is being discussed in the area of
science, what is discussed is: what will be studied, what will be questioned, how it
should be asked, and what rules must be followed in translating it to get an answer.

• SOATATA (Statement on Accounting Theory and Theory Acceptance) issued

by AAA in 1977 identified 3 areas to discuss Accounting Theory:
• Classic Approach– true income (inductive approach)
• Decision usefulness approach
• Information/Economics approach
6 (enam) Paradigma Akuntansi:

The Decision
The The Decision Usefulness
Anthropological Usefulness (decision
(inductive (decision model maker/individual
paradigm) paradigm) user paradigm)

The True Income The Decision The Information

(deductive Usefulness (economics
paradigm) (aggregate paradigm)
market behavior
paradigm)
Faktor-faktor yang memengaruhi arah riset akuntansi
menurut Beaver (1996):

Internal Factors External Factors

(Endogenous Factors) (Exogenous Factors)
 Availability of Accounting
research journals Conferences

Internal
Factors
 Availability of electronic
Influence from other databases
disciplines (e.g. CRSP, Bloomberg
(e.g psychology, database, Osiris, etc.) Changes in the financial
mathematics, econometrics, reporting environment
and statistics)

External
Factors
Research in Accounting Area
Capital
market
research
The Decision Behavioral Isla
Model Ac mi
Approach
Research co c in
un
tin
g
Accounting
Deconstruti
Research
on &
Marxism in
Agency
Accounting Theory
Information
Economics
Accounting and Capital Market Research Topics in USA (& Indonesia)

Methodology

Capital Market

Organizational

Management
 Topic in Managers Level

1. Related to the opportunistic behavior perspective (the issue of how

managers behave opportunistically using accounting methods to
increase their wealth). Managers tend to manipulate earnings to
their advantage – Earnings Management. Underlying Theory:
Agency Theory.

2. Ownership
 Topics in Organizational Level
2 groups:
• Accounting earnings for efficient contracting perspective
• Accounting data other than earnings as a measurement

1. Accounting profit for efficient contracting perspective

• Shows how accounting methods are used to improve contracts within companies.
• Watts & Zimmerman (1986) proposed two hypotheses related to positive accounting theory (the
debt/equity hypothesis = debt/equity hypothesis, and the political cost hypothesis).
• Earnings management by means of income smoothing. The goal is to make the company's risk
smaller by keeping profit fluctuations low.
2. Accounting Data Other Than Earnings as a Measurement

• For example, the researchers is using cash flow data used to predict
future earnings.

• Other accounting data is in the form of ratios. Altman (1968) used

financial ratios to predict corporate bankruptcy. Other researchers
use accounting ratios (e.g leverage) as a proxy for proximity to
covenants. Other researchers using an alternative profit is EVA
(economic value added).
Topics in Market Level

Includes:
1. Earnings information content
2. Economic consequences study
3. Consequences of regulation
4. Earnings response coefficient
5. Information content other than profit
6. Information transfer
7. Implications for the financial sector: market efficiency, efficient
market anomalies, etc.
Topics in Methodology

• Methodological issues began to emerge in the 1980s to improve existing

methodologies.

• These methodological issues are drawn from Beaver (1982), Bernard

(1989), and Kothari (2001).

• Methodological issues are grouped into 4 (four) matters:

1. Issues in model specifications
2. The issue of increasing the power of the test in the event study
3. Issues about the time series property of earnings
4. The issue of statistical bias

Source: Jogiyanto HM
 1. Issues in model specifications

• Accounting and financial research face two hypotheses simultaneously

(joint hypothesis), namely the hypothesis about the phenomenon to be
studied and the hypothesis about the truth of the model.

• The validity of the model is very important, because if one chooses the
research model it will mislead the research results.

• For example: the CAPM model is used to calculate expected returns and
abnormal returns to see market reactions. If it turns out that the reaction
results are not significant, can it be said that the market is not reacting or
because the model cannot capture the market reaction. For this reason, it
is necessary to continuously improve the model.

Source: Jogiyanto HM
 2. The issue of increasing the power of the test in the event
study
• Event study is a popular methodology in capital market research.

• This methodology is used to see the reaction of an event announcement

and is used to test the information content of an event or to test the
efficiency of the semi-strong form of the market. Brown and Warner (1980)
tested several abnormal return calculation models for event studies.
• The models tested are the average model, the market model, and the
market adjusted model.
• The results of the research show that the simplest model is better than the
complicated model. Thus, the power of the test in the event study becomes
important.

Source: Jogiyanto HM
3. Issues about the time series property of earnings

• Earnings variable is still considered as an important variable in

accounting research.

• Predicting future earnings is still important.

• Earnings predictions are used for management forecasts, analyst

forecasts, and others.

• The most effective way to predict earnings is to use past earnings on

a time series basis.
Source: Jogiyanto HM
 4. The issue of statistical bias
• Some biases in the statistics need to be corrected or reduced.

• Bias that occur, for example, are biases in the calculation of beta which is the regression
coefficient of market returns on company returns. This bias will get bigger as the stock
trading gets more out of sync.

• Another bias is the bias in the ERC coefficient. Macinga (1999) suggests there are seven
ways to reduce this habit, and the best way is the Fuller method.

• Kothari (2001) proposes to include control variables to reduce bias in ERC, for example by
including ownership variables, firm life cycle, firm strategy, and differences in accounting
earnings.

• Another way to overcome statistical bias is to use computer technology (eg bootstrapping
and randomization techniques).

Source: Jogiyanto HM
Future Directions of Accounting Research

Beaver (1996) proposes the direction of future accounting research into three
factors:
1. Combining theory, empirical analysis, and in-depth institutional knowledge.

2. Accounting research should emphasize context specific rather than general

research. Research that relates accounting earnings to stock prices is generic
research. Research in certain contexts or situations that have not been
discussed and has a certain context will be very interesting to do.

3. Factor wild cards (free cards). This means that research is carried out
depending on the creativity of researchers, research has never been done
before, dramatic that has not been thought of before. For example, research
that tries to introduce a new theory about accounting.