AcFn3111 Ch01 2016-4st

RESEARCH METHODS
IN ACCOUNTING & FINANCE

ACFN 3111
I SEMESTER 2023/24 AY
DEPARTMENT OF ACCOUNTING AND FINANCE

COLLEGE OF BUSINESS AND ECONOMICS
ADDIS ABABA UNIVERSITY
ACFN 3111 (Compiled by Andualem) 1

Syllabus
1. Concepts of Scientific Research /Introduction/
1.1 Concept of research 1.2 Types of Research

Meaning of research Basic research
Motivation for research Applied research
Quantitative research
Importance of research
Qualitative research
Purpose of studying research methods Exploratory research
Managerial value of research Descriptive research
Causal research
Characteristics of good research

Syllabus
1. Concepts of Scientific Research (Cont’d)
1.3 The Systematic Process of Research (Main Stages)
 Determining a research problem
 Formulating a Research question/ Hypothesis
 Designing the study
 Developing data collection instrument
 Data collection
 Data analysis and presentation
 Determining research implications & findings
 Making recommendations

Syllabus
2. Research Problem: The Heart of the Research Process

2.1 What is a Research Problem 2.3 Testing Hypothesis
Defining the research problem State the hypothesis
Sources of research problems Determine the appropriate test statistics
Guidelines for problem statement Specify the significance level
Determine the decision rule
2.2 Hypothesis Formulation Collect data & perform the needed
Defining hypothesis conclusion
Hypothesis vs. Research problem Decide to reject or not reject and produce
Possible sources of hypothesis conclusion
Null and Alternative hypothesis
Basic characteristics of good hypothesis

Syllabus
3. Research Proposal
3.1 The purpose research proposal
3.2 Structure of a research proposal
 Background of the study
 Statement of the problem
 Research objectives
 Research question/ hypothesis
 Significance of the research
 Literature review (Preliminary)
 Research methodology/design
 Work plan (Timetable/Timescale) and budget (resources)
 Other sections of the proposal (cover page, abstract, references/citation…)
3.3 Proposal writing (hand in assignment )

Syllabus
4. Sampling Design
4.1 Sampling design
4.2 Census and sample survey
4.3 The need for sampling
4.4 Steps in sampling design
4.5 Criteria for selecting a sampling procedures
4.6 Types of sample design
4.7 Probability sampling design
4.8 Non probability sampling design

Syllabus
5. Sources and Collection of Data
5.1 Types and sources of data
5.2 Methods of primary data collection
5.3 Methods of secondary data collection
6. Data Presentation and Analysis Methods

6.1 Descriptive versus inferential data analysis
6.2 Spread sheet application in data analysis
6.3 Article review

Chapter I
Concepts of Scientific Research

Contents
1. Meaning of Research
2. Characteristics of Research (what’s and what’s not)
3. Objectives of Research
4. Importance/Significance of Research
5. Motivation in Research
6. Managerial value of Research
7. Characteristics/Criteria of Good Research
8. Types of Research
9. The systematic process of research

Introduction – The Meaning of Research
 While research is important in both business and academia, there is no consensus in the
literature on how it should be defined. The definitions are legion.
 However, from the many definitions there appears to be conformity that research:
 is a process of enquiry and investigation;
 is systematic and methodical; and
 increases knowledge.

Introduction – The Meaning of Research…
 The ‘process of enquiry and investigation’ suggests that research is all about having a
predetermined set of questions, and then aim to answer these questions through the
gathering of information and analysis.
 “Systematic and methodical” implies that your research must be well organized and go
through a series of stages.
 i.e. research is done in an organized manner.

 A research project has a well-known structure: a beginning, a middle, and an end
(i.e. research cycle).

 “Research increases knowledge” means that:

 Not only your own knowledge about the subject improves as a result of your research,
but so too will that of your audience.
 Research = knowledge advancement/generation or search for knowledge/ a course of
critical or scientific inquiry.
 Hence, research can be defined as:

 a systematic (step-by-step) process of collecting, recording, analyzing, and interpreting
information—data— in order to increase our understanding of a phenomenon/subject
about which we are interested or concerned.

 The term “Research” consists of two words:

 Research = Re + Search
 “Re” means again and again
 “Search” means to find out something. The process is:
 Thus, research means to observe the phenomena again and again from different
dimensions. It is the art of scientific investigation.
 Research is a process of intellectual discovery, which has the potential to transform our
knowledge and understanding of the world around us.

 Business research
 is the application of the scientific method in searching for the truth about business phenomena (activities include defining
business opportunities and problems, generating and evaluating ideas, monitoring performance, and understanding the
business process).
 is systematic and organized effort to investigate a specific problem encountered in the work setting that needs a solution.
 the systematic inquiry that provides information to guide business/ managerial decisions.

 Business research (cont’d)

 an organized, systematic, data‐based, critical, objective, inquiry or investigation into a specific problem, undertaken with the purpose of
finding answers or solutions to it.
 it is a process of planning, acquiring, analyzing, and disseminating relevant data, information, and insights to decision makers in ways
that mobilize the organization to take appropriate actions that, in turn, maximize performance.
 Accounting research
 is a systematic process of investigating an issue of concern to the accountant.

 Accounting research – is a systematic process of investigating an issue of concern to the

accountant.
 E.g. IASB due process

 Business research
 is a systematic inquiry that provides information to guide a specified managerial
decision.
 More specifically, it is a set of processes that include planning, acquiring, analyzing, and
reporting relevant data, information, and insights to decision makers in ways that
mobilize the organization to take appropriate actions.
 These actions are designed to maximize performance and help accomplish
organizational goals.
 Typically, the overall process is divided into the following stages:
1. Clarify the research question.
2. Design the research.
3. Collect and prepare the data.
4. Analyze and interpret the data.
5. Report insights and recommendations.

 What research is… (often called primary/original research) – The steps in formal research –
the researcher:
1. begins with a problem—an unanswered question;
2. clearly and specifically articulates the goal of the research endeavor;
3. often divides the principal problem into more manageable subproblems;
4. identifies hypotheses and assumptions that underlie the research effort (assumptions
are equivalent to axioms in geometry self evident truths, the sine qua non (prerequisite)
of research);
5. develops a specific plan/design for addressing the problem and its subproblems – in the
formative stages of a research project, much can be decided: e.g. data – existence,
access, analysis, etc;
6. collects, organizes, and analyzes data related to the problem and its subproblems; and
7. interprets the meaning of the data as they relate to the problem and its subproblems.
 What research is…
 The two important points related to the foregoing seven-step process are:
 First, the process is iterative - A researcher sometimes needs to move back and
forth between two or more steps along the way
 Second, the process is cyclical - research typically involves a cycle—or more
accurately, a helix (spiral)—in which one study spawns additional, follow-up
studies. Research begets more research. Research is rarely conclusive.

 The Research cycle

 What research is not … (often called ‘secondary research’?)

 Research is not merely gathering information/information discovery (e.g. get information
about intellectual property from the library)
 Research is not merely rummaging around for hard-to-locate information (e.g. for trading
property) - Rummaging—whether through records in one’s own office, at a library, or on the
Internet—is not research. It is more accurately called an exercise in self-enlightenment.
 Research is not merely transporting facts from one location to another (e.g. a FA course
assignment to write ad present about AABE? )– fact transcription, fact documentation, fact
organization, or fact summarization.

 Example 1 – Topic – Auditing - Audit Pricing

 Main problem: What are the determinants audit fees in Ethiopia?
 Subproblems
 Sub-problem 1. what are the determinants of (factors affecting) audit fees paid by
public sector organizations to their external auditors?
 Sub-problem 2. What are the determinants of (factors affecting) audit fees paid by
private sector organizations to their external auditors?
 Sub-problem 3. Do the determinants of (factors affecting) audit fees in the public and
private sector organizations discern any pattern of variation in audit pricing and why…?

 Exercise 1 – Topic – Financial Accounting/Reporting – Financial reporting practices

of construction companies/firms in Ethiopia?
 Main problem:
 Subproblems
1. …
2. …
3. …

 Research methods
 the techniques and range of tools you use to do research are called.
 provide the needed information that guide policy makers to make informed
decisions by reducing uncertainty.
 With the right sort of methods you should be able to convince other people that
your conclusions have some validity

Introduction – Objectives of Research
 The role of research has increased in modern times b/c research

 provides the basis for nearly all government policies.
 helps in solving various operational and planning problems of business and industry.
 reduces uncertainty for policy makers, planners, business managers, and other
stakeholders by providing information that improves the decision-making process
 Contributes to Policy/Practice/Literature

Introduction – Objectives of Research…
 Research can be used to (what can be done with research?):
 Categorize - involves forming a typology of objects, events or concepts and can be useful in
explaining which ‘things’ belong together and how.
 Describe - attempts to examine situations in order to establish what is the norm- the what
question.
 Explain - aims to move beyond ‘just getting the facts’ in order to make sense of the myriad other
elements involved – the why question.
 Evaluate - involves making judgments about the quality of objects or events.
 Compare - Two or more contrasting cases can be examined to highlight differences and similarities
between them, leading to a better understanding of phenomena.

Introduction – Objectives of Research…
 Correlate - relationships between two phenomena are investigated to see whether they
move in the same direction.
 Predictions- if there has been a strong relationship between characteristics or events in
the past, then similar circumstances should exist in the future, leading to predictable
outcomes.
 Control- Once you understand an event or situation, you may be able to find ways to
control it. If the cause and effect relationships are identified you are able to exert control
over the vital ingredients.

Introduction – Motivation (Interest/s) in Research
 The motivation to do research may be due to the desire:
 to get a research degree along with its consequential benefits
 to face the challenge in solving the unsolved problems, i.e., concern over
practical problems initiates research
 to get intellectual joy of doing some creative work
 to be of service to society
 to get respectability, etc.

Introduction – Factors Affecting Social Research
 Although research is important, it is not a panacea for all the problems that an
organization faces.
 Therefore, an organization should decide upon the option of conducting research
after considering various factors.
 time constraints,
 availability of resources,
 availability of data, and
 nature of information that the organization is expecting and the costs involved.

Introduction – Factors Affecting Social Research…
 When is Business Research Needed?

Introduction – Sources of knowledge (Generation/Acquisition?)
 What is Knowledge?
 information about or awareness of something, an issue, a fact;
 an understanding of a matter, a fact, an issue.
 Research is about generating knowledge - an awareness of something or an
understanding of a matter.
 Knowledge of our social world comes from a range of different sources: through
reasoning, through intuition, or through the use of appropriate methods.
 But, not all roads to knowledge are equally useful/reliable.

Introduction – Sources of knowledge…
 The methods of obtaining knowledge can be categorized as:

 scientific and
 non-scientific methods.
 Non-Scientific Method
 gaining knowledge through senses, experience, intuition, and revelation.
 Senses and Experiences (Experiential knowing)
 gaining knowledge through physical senses - seeing, sound/hear, touch, taste, and
smell - and experience, e.g. when one gets too close to a fire and gets burned, he or
she gains the knowledge that it is dangerous to be too close to the fire.

 Non-Scientific Method…
 Intuition/Tenacity
 Knowledge is obtained if one strongly believes what one perceives is real and true.
 Believing something because, based on your view of the world and your assumptions, you don’t want to give
up your belief.
 It is subjective, because if two people hold mutually contradictory beliefs, both cannot be true.
 Willingness to accept ideas as valid knowledge despite contrary evidence and/or lack of supporting evidence.
 Revelation (Authoritative knowledge)
 An alternative to an individual’s belief in what is true, could come from what authorities say is true.
 We may feel convinced that something is true because an authority (the Bible, Koran, a leader or teacher) tells us it
is true.
 But, experts with different perspectives will hold different beliefs. How is one to know which expert/authority is
right?

 So, knowledge acquired through nonscientific methods cannot be subjected to objective

testing.
 Scientific Method:
 the most valid and reliable approach of gaining knowledge is through science, which
is objective and self-correcting
 knowledge obtained by scientific method can be subject to testing (verification).
 a standardized set of techniques for building scientific knowledge, such as how to
make valid observations, interpret results, and generalize those results.

 The Scientific Method…

 The scientific method consists of a systematic observation, classification and
interpretation of data – appropriate methods are used.
 Scientific knowledge relies on observations which are objective, data-driven,
public, and potentially replicable.
 The process is also incremental, with a series of small steps rather than a giant
leap.
 Science insists on following systematic, methodical “rules“ for gathering
empirical evidence. Because, evidence that is obtained in an unsystematic way
is regarded as problematic; i.e. it is seen as less trust worthy or unreliable.


 The actual practice of science also shows that there are alternative methods
of gathering information and of analyzing the data.
 What constitutes a ‘science’ and the nature of its methods are open to
dispute.
 In general science is interested to discover “ laws“ or regularities of both the
physical and social worlds (e.g. the law of gravity, demand and supply)
 Some sciences, deal with the physical and material world- natural science.


 The subject matter of the natural sciences is the physical world, and is independent
of the researcher and the way it is understood. For example, a tree has a physical
structure of its own, regardless of the scientist who is studying the way it grows.
 Other sciences involve the study of people – their beliefs, behavior, interactions,
attitudes, institutions, and so forth- social sciences. They are sometimes also called
soft sciences.
 The subject matter in social science (human life) is fluid, formidable to observe,
and hard to measure precisely with laboratory instruments. But, it does not
mean it lacks rigor.


 We arrive at scientific laws or theories through a process of logic and evidence.
 Logic (theory) and evidence (observations) are the two, and only two, pillars
upon which scientific knowledge is based.
 In science, theories and observations are interrelated and cannot exist without
each other.
 Theories provide meaning and significance to what we observe, and
observations help validate or refine existing theory or construct new theory.


 Science
 etymologically, the word “science” is derived from the Latin word scientia meaning
knowledge.
 refers to a systematic and organized body of knowledge in any area of inquiry that is
acquired using “the scientific method”
 Goals of science
 Description – understanding the behaviors and events we study.
 Explanation – identifying the conditions within which behaviors and events operate.
 Prediction – foretelling the occurrence of behaviors or events in the future.
 Control – means that we can make a behavior or event occur and not occur (i.e.
regularity).

 In Sum – How do we know what we know?

 Tenacity – knowing by force of habit or superstition (accept ideas as valid knowledge
despite contrary evidence and or lack of supporting evidence – accept mindless repetitions
(e.g. in a campaign or ad) as true. Disadvantage – knowledge acquired is often inaccurate.
 Intuition – direct acquisition of knowledge without intellectual effort or sensory processing
(e.g. extrasensory perception) – disadvantage – the only way to determine its accuracy is to
act on that belief.
 Authority – knowledge gained from others – disadvantage – knowledge largely remains
unchecked.

 In Sum – How do we know what we know?...

 Reason – relying on logic and rationality – disadvantage – often leads to erroneous
conclusions.
 Empiricism – knowledge based on experience – disadvantage – not everyone
experiences/observes the world in the same way – perception is often illusory and
memory is inherently biased.
 Science – relying on systematic empiricism (combines reason/rationalism and
empiricism)




Introduction – Steps in the Scientific Method of Research
 The main steps in the scientific method include:

1. Choose a question to investigate
2. Identify a hypothesis related to the question
3. Make testable predictions in the hypothesis
4. Design an experiment to answer hypothesis question
5. Collect data (experiment)
6. Determine results and assess their validity
7. Determine if results support or refute your hypothesis

Introduction – Characteristics of the Scientific Method (SM)
 A set of overriding principles govern the scientific investigation.

 It is based on empirical evidence
 The scientific method is based on empirical evidence and utilizes relevant concepts
 It is concerned with the realities that are observable through the use of verifiable
experience or observation.
 it is based on logical reasoning (Critical thinking)
 The scientific method practices logical reasoning which allows determination of the truth
through steps different from emotional and hopeful thinking
 Science is fundamentally a rational activity, and the scientific explanation must make sense.
 Religion may rest on revelations, custom, or traditions, gambling on faith, but science must
rest on logical reasons.

Introduction – Characteristics of the Scientific Method…

 It possesses skeptical attitude
 any proposition is open to analysis and critique
 This is the constant questioning of your beliefs and conclusions – it requires the possession of
skeptical attitudes.
 A skeptic holds beliefs tentatively, and is open to new evidence and rational argument
 It is Verifiable: Observations made through SM are to be verified by using the senses to confirm or
refute the previous findings.
 The more the results are replicated or repeated, the more we will gain confidence in the
scientific nature of our research.


 It is Cumulative: Prior to the start of any study researchers try to scan through the
literature.
 Instead of reinventing the wheel researchers take stock of the existing body of
knowledge and try to build on it -knowledge keeps on growing.
 A linkage between the present and the previous body of knowledge has to be
established, and that is how the knowledge accumulates.
 Every new idea does not have to start from a scratch;


 It is Deterministic: Science is based on the assumption that all events have
antecedent causes that are subject to identification and logical understanding.
 for the scientist, nothing “just happens” – it happens for a reason.
 events occur according to regular laws and causes.
 the scientific researchers try to explain the emerging phenomenon by
identifying its causes.
 the researcher tries to narrow down the number of reasons in such a way that
some action could be taken.


 It possess ethical and ideological neutrality: The conclusions drawn through
interpretation of the results of data analysis should be objective;
 i.e., they should be based on the facts of the findings derived from actual data,
and not on our own subjective or emotional values.
 Researchers are human beings, having individual ideologies, religious
affiliations, cultural differences which can influence the research findings.
 Therefore, follow the principle of objectivity, uphold neutrality, and present the
results in an unbiased manner.


 It lends to statistical generalization: The scope of the research findings in one
organizational setting applicable to other settings.
 The more generalizable the research, the greater its usefulness and value.
 Science Is Public: Scientists only recognize research as valid or useful when they
can scrutinize it.
 Generally, we accept research as valid if it has undergone a peer review process.

 The hallmarks of scientific research:

1. Purposiveness: start with a definite aim or purpose, purposive focus.
2. Rigor: carefulness, scrupulousness, the degree of exactitude in research investigations.
Good theoretical base and a sound methodological design. Every effort is made to
minimize error.
3. Testability: researcher develops certain hypotheses, then these can be tested by
applying certain statistical tests to the data collected for the purpose.
4. Replicability: the results of the tests of hypotheses should be supported again and yet
again when the same type of research is repeated in other similar circumstances (similar
results when repeated).


5. Precision and confidence: - Precision: the closeness of the findings to “reality” based
on a sample. Reflects the degree of accuracy or exactitude of the results on the basis of
the sample – to what really exist in the universe - Confidence: the probability that our
estimations are correct
6. Objectivity: the conclusions drawn through the interpretation of the results of data
analysis based on the facts of the findings derived from actual data and not on our own
subjective or emotional values.


7. Generalizability: refers to the results of the research and how far they are applicable
to locations and situations beyond the scope of the study. The research sampling
design has to be logically developed and a number of other details in the data-
collection methods need to be meticulously followed.
8. Parsimony: simplicity in explaining the phenomena or problems that occur, and in
generating solutions for the problems. Introduced with a good understanding of the
problem and the important factors that influences it; good conceptual theoretical
model.

Introduction – Importance of Research
 All progress is born of inquiry.
 All development and progress in the society is an outcome of a research work.
 Research –
 develop logical thinking.
 fountain of knowledge
 an important source of providing guidelines for solving different business, governmental and social problems.
 provides base for the policies formation of the government related to agriculture, industries and infrastructural
services in the country. Research provides for predicting of future prospects of the country.
 facilitates the decisions of the policy maker.

Introduction – Importance of Research…
 Research has special importance in relation to

 solving various problems of business and industries. Market research, operation research and motivation
research are conducted in the business for various requirements.
 social scientists for analyzing the social relationships and seeking explanations to various social problems.
 its application in socio political sector in order to find out solution to social and political problem of the
society.
 those students, professionals, among others who are to write project, thesis, dissertation, among others
research may mean of careerism or a way to attain a high position in the social structure.

Introduction – Managerial value of research
 The prime managerial value of business research is that it reduces uncertainty by

providing information that improves the decision-making process.
 The decision making process associated with the development and implementation
of a strategy involves three interrelated stages.
 Identifying problems or opportunities
 Diagnosis and assessment problems or opportunities
 Selecting, implementing, evaluating a course of action

Introduction – Characteristics/Criteria of good research
 Purpose clearly defined

 Research process detailed
 Describe research procedure in sufficient details to permit another researcher to repeat the research for further advancement
 Research design thoroughly planned
 Efforts should be made to minimize the influence of personal bias in selecting and recording data.
 High ethical standards applied
 Include safeguards against causing mental or physical harm to participants and makes data integrity a first priority should be highly valued.

Introduction – Characteristics/Criteria of good research…
 Limitations frankly revealed

 report with complete frankness, flaws in procedural design and estimate their effects upon the findings.
 Adequate analysis for decision maker’s needs (i.e. Robustness)
 check the validity and reliability of the data
 use appropriate descriptive and inferential techniques
 apply the criteria of statistical significance
 Findings presented unambiguously
 Conclusions justified
 Researcher’s experience reflected

 Qualities of a good researcher

 Qualities of Evaluate your personal qualities and research skills

Weak Strong
Intellectual skills (eg ability to learn, analyse, 1 2 3 4 5
a good
synthesise)
researcher Communication skills (written and verbal) 1 2 3 4 5
…
IT skills (eg Excel, statistics, database searching) 1 2 3 4 5
Organisational skills (eg administration, time mgt) 1 2 3 4 5
Independence (eg work alone with only guidance) 1 2 3 4 5
Motivation (reasons for doing the research) 1 2 3 4 5
Perseverance (eg overcome problems/complete) 1 2 3 4 5

 Research Ethics – Addressing ethical issues
 Harm to participants
 Lack of informed consent
 Invasion of privacy
 Deception
 Protecting research subjects


 The value of research depends on its ethical veracity (truthfulness).
 Ethics are the rules of conduct in research.
 How can we believe the results of a research project if we doubt the honesty of the
researchers and the integrity of the research methods used?
 Ethics is not just considered from the point of view of the researcher, but also from
the viewpoint of those with a vested interest in the research- individuals,
organizations and governments.
 Ethical responsibility is required to do the work honestly and with integrity.
 Researchers, subjects, funding bodies and society may have conflicting
incentives/interests.


 Due to its focus on people, ethical issues are centrally important in research.
 Researchers must ensure the accuracy, appropriateness, of data and research results.
 Two examples that necessitated the use of research ethics:
 The way German scientists had used captive human subjects in gruesome
experiments during WW II.
 In the 1950s and 1960s, the Tuskegee Syphilis Study involved the withholding of
known effective treatment for syphilis from African-American participants who
were infected
 Nowadays when working with human participants, it is often necessary to obtain some
kind of ethical approval – from ethical boards.


 To treat participants in your research with respect and due consideration is a basic
tenet of civilized behaviour.
 Research stakeholders

 Honesty and integrity in your work

 It is easy to cheat, but the penalties resulting from discovery are stiff and humiliating.
 Honesty is essential to engender a level of trust and credibility for the development of
knowledge.
 Do not fabricate, falsify, or misrepresent data.
 Do not deceive colleagues, research sponsors, or the public.
 Researcher/s – Researcher/s relation/s (Intellectual ownership)
 Unless otherwise stated, what you write and the ideas will be regarded as your own work.
 Directly copying someone else’s work into your report, thesis etc. and letting it be assumed
that it is your own – plagiarism - is the worst offence in academics

 Plagiarism
 is the unauthorized use of someone else's thoughts or wording either by
 incorrect documentation, failing to cite your sources altogether, or
 simply by relying too heavily on external resources.
 includes copied data/information, falsification, fabrication or omission of significant results.
 includes informal published material such as the "buying" of a paper from another student.
 undermines your academic integrity and betrays your own responsibilities.
 is considered as an academic crime with punishment because it is intellectual theft.
 can easily be detected through peer reviews

 Plagiarism…
 Some examples of plagiarism include
 The verbatim (exact) copying of another person’s work without acknowledging it.
 The close paraphrasing of another person’s work by simply changing a few words
or altering the order of presentation without acknowledging it.
 The unacknowledged quotation of phrases from another person’s work and/or the
presentation of another person’s idea(s) as one’s own.
 Citation and acknowledgement
 In no field of research can one rely entirely on own ideas, concepts and theories alone.
 Standard practices have been developed to permit the originators of the work and
ideas to be acknowledged within your own text
 This is called citation.
 You should acknowledge the assistance of others and any collaboration with others.

 Responsibility and Accountability of the Researcher

 You do have responsibilities to fellow researchers, respondents, the public and the
academic community.
 Accurate descriptions are required of
 what you have done,
 how you have done it,
 the information you obtained,
 the techniques you used,
 the analysis you carried out, and
 the results of experiments , etc.

 Responsibility and Accountability of the Researcher…

 Fabrication and falsification of research results are serious forms of misconduct.
 Falsifying results—to make them fit your conclusion.
 Trimming—removing data that does not fit in with your analysis.
 Biased or inappropriate analysis.
 Researcher should avoid either a false statement or an omission that distorts the truth
- Objectivity.
 A researcher has an obligation to maintain a clear and complete record of data
acquired to preserve accurate documentation.
 It is unethical to conduct research that is badly planned or poorly executed.

 Responsibility and Accountability of the Researcher…

 Fraud must be avoided in research and this can come in several forms:
 Being selective in sampling.
 Not reporting survey response/participation rates.
 Deliberately biasing the data collection instruments—for example, asking leading
questions in surveys.
 Making up data—because you can’t be bothered doing the data collection.

 Data and Interpretations

 There is often a temptation to be too selective in the use of data and in presenting the
results of the analysis.
 Irresponsible policy advise
 Waste of research fund, etc.
 Silently rejecting or ignoring evidence which happens to be contrary to one’s beliefs
constitutes a breach of integrity.
 What could be of vital importance in developing a theory could be lost.
 Scientific objectivity should be maintained.

 Data and Interpretations…

 It is considered a breach of research integrity to fail to report data that contradict or
merely fail to support the conclusions.
 Negative (unexpected) results must also be reported.
 Records should include sufficient detail to permit examination for the purpose of
 replicating the research,
 responding to questions that may result from unintentional error or
misinterpretation,
 establishing authenticity of the records, and
 confirming the validity of the conclusions.

 Researcher/s and Funding bodies

 Pressure and sponsorship from sources which might influence the impartiality of the
research outcomes should be avoided.
 Fund allocations directing research - ‘money buying research results’?
 Researcher/s and Research subject/s
 Some ethical principles governing data collection include: harm to respondents,
informed consent, respect for privacy and safeguarding the confidentiality of
data.
 In collecting data researchers need to be guided by principles of respect for persons and
obtaining informed consent.
 There are two standards that are applied in order to help protect the privacy of
research participants.
 There are two standards that are applied in order to help protect the privacy of research
participants
 Confidentiality
 Participants are assured that identifying information will not be made available to
anyone who is not directly involved in the study.
 If you promise anonymity to questionnaire respondents, then that means that no one,
including you, will know who has completed the questionnaire.
 Anonymity
 means that the participant will remain anonymous throughout the study -- even to the
researchers themselves.
 means that no one will see (your completed questionnaire/interview transcript) except
the researcher and all questionnaires and records will be deleted once the research is
completed.
 the anonymity standard is a strong guarantee of privacy, but it is sometimes difficult to
accomplish, especially in situations where participants have to be measured at multiple
time points (e.g. a pre-post study).

 Researcher/s and Research subject/s…

1. Harm to participants
 Physical harm, humiliation, embarrassment, loss of trust, harm to participant’s
development, loss of self-esteem, stress, etc.
 Ethical standards require that researchers should not put participants in a situation
where they might be at risk of being harmed as a result of their participation.
 Harm can be defined as both physical and psychological.
 Minimize harms and risks and maximize benefits; respect human dignity, privacy, and
autonomy; take special precautions with vulnerable populations.

2. Lack of informed consent
 The principle of voluntary participation requires that people should not be coerced into
participating in research.
 Voluntary participation requires informed consent.
 This means that prospective research participants must be fully informed about the procedures
and risks involved in research and must give their consent to participate.
 i.e. getting the informed consent of those you are going to interview, question, observe or
take materials from.
 Informed consent implies that persons who are invited to participate in the research
activities should be free to choose to take part or refuse.
 Participants should be given as much information as needed to make decision on participation
 They are free to decide after having been given the fullest information concerning the nature and
purpose of the research.

3. Invasion of privacy
 This is linked to informed consent
 Covert methods are violations of the privacy principle on the grounds that
participants are not being given the opportunity to refuse invasions of their privacy
 Participants may refuse to address specific questions even though they have agreed to
participate
 Protecting research subjects
 Legal protection
 Professional associations and universities (ethics committees)


4. Deception
 Occurs when researchers present their research as something other than what it is.
 Researchers usually want to limit participants understanding of what the research is
about so that they act naturally to the experiment.
 Collection of data illegally, under false pretenses (from minors, etc.) is unethical.
 Getting access and consent to do research is essential.
 Debriefing: is talking to participants following their role in the research.
4. It is often important to provide participants with any additional info they need to
develop their understanding of the research after the data have been collected.
5. In some cases, participants may also be interested in a summary of the research
findings.
 So, there needs to be a procedure that assures that researchers will consider relevant ethical issues
in formulating research plans.
 Formulating an Institutional Review Board (IRB)
 A panel of persons will review proposals with respect to ethical implications and decide whether
additional actions need to be taken to assure the safety and rights of participants.
 Ethics committees
 have a duty to consider all possible sources of harm.
 play an important part in ensuring that no badly designed or harmful research is permitted.
 make sure that the researcher has thought through all the relevant issues prior to granting
permission to proceed
 By reviewing proposals for research, IRBs help to protect both
 the organization, and the researcher against potential legal implications of neglecting to
address important ethical issues of participants.

 In sum some important shared values for the responsible conduct of business research
include:
 honesty — conveying information truthfully and honoring commitments,
 accuracy — reporting findings precisely and taking care to avoid errors,
 efficiency — using resources wisely and avoiding waste, and
 objectivity — letting the facts speak for themselves and avoiding improper bias.
 social responsibility-strive to promote social good and prevent or mitigate social
harms through research.

 The Evolution of
Ethical Principles for
Research with Human
Participants: The
Belmont Report (1979)
presents three basic
principles of ethical
treatment of human
participants underlying
all medical and
behavioral research:
1. Respect for persons,
2. Beneficence, and
3. Justice

Introduction – Types /Classification of Research
 Research comes in many shapes and sizes.
 Classifying research is a useful way of analysing studies according to key characteristics

 There are different criteria for classifying research activities.
 Hence, the classification may be in terms of:
 the research (data collection)techniques used in it,
 the time dimension,
 research environment,
 data used, and
 the intended uses of research
ACFN 3111 (Compiled by Andualem)

83
Introduction – Types /Classification of Research…
 Four main typologies based on
 Purpose of the research
 Process of the research
 Outcome of the research
 Logic of the research
 Time dimension of the research

84
Introduction – Classification of Research – Purpose
 Exploratory/Formulative research – used to gain an initial understanding where there is

little or no existing knowledge (rarely provides conclusive answers but offers guidance for
future research)
 E.g. What motivates a group of employees to increase their productivity?
 Descriptive research – used to describe phenomena as they exist identify and obtain
information on characteristics of the problem/issue (also termed ‘ex post facto research’ )
 E.g. How are the employees rewarded and how are productivity levels measured?
 the researcher has no control over the variables; he can only report what has happened
or what is happening

85
 Goals of Exploratory Research:

 Become familiar with the basic facts, setting, and concerns;
 Develop well-grounded picture of the situation;
 Develop tentative theories, generate new ideas, conjectures, or hypotheses;
 Determine the feasibility of conducting the study;
 Formulate questions and refine issues for more systematic inquiry; and
 Develop techniques and a sense of direction for future research.
 For exploratory research, the researcher may use different sources for getting information
like: Experience surveys, Secondary data analysis, Case studies, Pilot studies.

86
 Goals of Descriptive Research:

 Describe the situation in terms of its characteristics i.e. provide an accurate profile of a
group;
 Give a verbal or numerical picture (%) of the situation;
 Present background information;
 Create a set of categories or classify the information;
 Clarify sequence, set of stages; and
 Focus on ‘who,’ ‘what,’ ‘when,’ ‘where,’ and ‘how’ but not why?

87
 Analytical/explanatory research - goes beyond description to establish relationships

that explain how and why
 E.g. Is there a positive association between the rewards given to employees and
productivity level?
 Predictive research - goes even further by generalising from the analysis to make
predictions on the basis of hypothesised general relationships
 E.g. Which rewards predict productivity levels?

88
Introduction – Classification of Research – Exercise
Exercise 2. Exploratory, descriptive, analytical or predictive studies?
1.Why have the sales of our products in the UK been so high?
2.What are our sales in the UK compared to France over the last five years?
3.How can we improve our sales in France?
4.Why are our sales lower in Germany than in the UK or France?
5.Will a change in packaging improve our sales in France?
6.Is it possible to identify the factors that reduce the sale of illegal copies of our products?

89
Introduction – Classification of Research – Process/Data/Enquiry
 Quantitative approach
 focus is on measuring phenomena and analysing quantitative research data using
objective, statistical methods to gain understanding
 is based on the measurement of quantitative figure or quantity or amount.
 E.g. What is the absentee rate among a particular group of employees (in
offices)/students (in schools)?
 Qualitative approach
 is concerned with subjective assessment of attitudes, opinions, and behavior.
 Words, pictures, and narrative can be used to add meaning to numbers. Numbers
can be used to add precision to words, pictures, and narrative.
 E.g. What are the feelings of employees faced with redundancy?

90
 Mixed method approach
 research is often pluralistic - researchers often combine quantitative and
qualitative research methods within the same study.
 Mixed-method research strategies are particularly effective in policy-oriented
research and the contribution that qualitative research can make to policy
evaluation is increasingly being recognized.

91

Introduction – Classification of Research – Outcome/Use/Audience
 Research may be undertaken either to understand the fundamental nature of a social

reality (basic research) or to apply knowledge to address specific practical issues
(applied research).
 Applied research
 aims at finding solution for an immediate pressing problem facing a society or an

industrial unit or business organization (designed to apply its findings to solving a
specific, existing problem)
 E.g. How can energy be saved in a particular workplace?

93
Introduction – Classification of Research – Outcome/Use/Audience
 Basic/Pure/Fundamental research
 is designed to make a contribution to general knowledge and theoretical understanding,
rather than solve a specific problem
 is mainly concerned with generalizations and with the formulation of a theory.
 It is primarily concerned with the understanding of the fundamental nature of social
reality.
 It is the source of most scientific ideas and ways of thinking about the world.
 It is mostly exploratory in nature.
 E.g. How can business travellers be encouraged to reduce their carbon footprints?

94
Introduction – Classification of Research – Outcome

Introduction – Classification of Research – Logic
 Deductive research - a theoretical framework is developed and then tested by

empirical observation
 From the general to the particular
 E.g. Does motivation theory explain productivity levels among a particular group of
employees?
 Inductive research - theory is developed from the observation of empirical reality
 From the particular to the general
 E.g. Productivity levels are lower in the afternoon than the morning, so you
conclude they vary with the number of hours worked
 Deductive Reasoning
 Inductive Reasoning
 Hypothetico – Deductive Reasoning

 But, choosing between one position and the other is somewhat unrealistic in practice.
 The hypothetico-deductive method combines inductive and deductive reasoning.

 inductively developing hypotheses (testable theories) from observations, charting
their implications by deduction, and testing them to refine or reject them in light of
the results.
 The combination of experience with deductive and inductive reasoning is the foundation
of modern scientific research.
 Most social scientific research involves both inductive and deductive reasoning as the
scientist shifts endlessly back and forth between theory and empirical observations –
research cycle.
99
 Hypothetico – Deductive Reasoning…
 7 steps of the hypothetico-deductive research method:

1. Observation
2. Preliminary information gathering (unstructured literature review)
3. Theory formulation
4. Hypothesizing
5. Further scientific data collection
6. Data analysis
7. Deduction
Compiled by Andualem (2015/2023) 100

Introduction – Classification of Research - Exercise
Exercise 3. Classifying research (delete as appropriate)

1.A study to find out what factors made an advertising campaign for a major client such a success is
an example of
 Exploratory/ Descriptive/ Analytical/ Predictive research
2.Pilot projects are a common type of
 Exploratory/ Descriptive/ Analytical/ Predictive research
3.A study that tests relationships between variables takes a
 Quantitative/ Qualitative approach
4.A factory manager notes that productivity levels are higher when the weather is cooler and
concludes that employees work harder in cold weather. This is an example of a
 Deductive/ Inductive process
Introduction – Classification of Research – Time dimension
 Time dimension in research - Time is an important element of any research design.
 Research Can be one time or longitudinal research,
 Quantitative research may be divided into two groups in terms of the time dimension
 A single point in time (cross sectional)
 Multiple points research (longitudinal research)
 Cross –sectional research
 takes a snapshot (at specific/given point in time) approach to social world.
 cross sectional data - consists of a sample of individuals, households, firms, cities, states, countries,
or a variety of other units, taken at a given specific point in time.
 the simplest and less costly research approach.
 limitation – cannot capture social processes or changes.

Introduction – Classification of Research – Time dimension…
 Longitudinal research
 examines features of people or other units more than one time.
 usually more complex and costly than cross sectional research but is also more
powerful especially with respect to social changes.
 Time series research
 this is longitudinal study on a group of people or other units across multiple
periods (e.g. time series data on inflation, stock price).
 a time series data set consists of observations of one or more variables over time.

Introduction – Classification of Research – Time dimension…
 Longitudinal research …
 Panel study – consists of a sample of study units (people, firms, etc.) randomly selected, who are
questioned on two or more occasions.
 A panel data set consists of a time series for each cross-sectional member in the data set.
 The researcher observes exactly the same people group or organization across time periods,
each time using the snapshot approach.
 The focus is on individuals or households or firms. E.g. interviewing the same people in 1991,
1993, etc., and observing the change- a panel data set.
 A cohort Analysis – is similar to the panel study, but rather than observing the exact same
people, a category of people who share similar life experience in a specified period is studied.
 Hence the focus is on group of individuals not on specific individuals or households, e.g.
students from a particular year of matriculation.

Introduction – Steps in the systematic process of Research
 The following order concerning various steps provides a useful procedural

guideline regarding the research process:
1. Formulating the research problem………………………ch02
2. Preliminary/Extensive literature survey……..............ch03
3. Developing the hypothesis/research question……..ch02
4. Preparing the research design………………………….….ch03
5. Determining sample design…………………………………ch04
6. Developing instrument for collecting data……………ch05
7. Collecting the data……………………………………………….ch05
8. Data analysis and interpretation…………………………..ch06
9. Determining the implications and findings……………ch06
10. Making recommendations……………………………………ch06

Introduction – The research process: an eight-step model


Introduction – AcFn 3111
 End of Ch. 1 – Next Ch. 2

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RESEARCH METHODS

IN ACCOUNTING & FINANCE

DEPARTMENT OF ACCOUNTING AND FINANCE

ACFN 3111 (Compiled by Andualem) 1

1. Concepts of Scientific Research /Introduction/

1.1 Concept of research 1.2 Types of Research

ACFN 3111 (Compiled by Andualem) 2

ACFN 3111 (Compiled by Andualem) 3

2. Research Problem: The Heart of the Research Process

ACFN 3111 (Compiled by Andualem) 4

ACFN 3111 (Compiled by Andualem) 5

ACFN 3111 (Compiled by Andualem) 6

6. Data Presentation and Analysis Methods

ACFN 3111 (Compiled by Andualem) 7

Concepts of Scientific Research

ACFN 3111 (Compiled by Andualem) 8

ACFN 3111 (Compiled by Andualem) 9

ACFN 3111 (Compiled by Andualem) 10

 i.e. research is done in an organized manner.

ACFN 3111 (Compiled by Andualem) 11

 “Research increases knowledge” means that:

 Hence, research can be defined as:

ACFN 3111 (Compiled by Andualem) 12

 The term “Research” consists of two words:

ACFN 3111 (Compiled by Andualem) 13

ACFN 3111 (Compiled by Andualem) 14

 Business research (cont’d)

ACFN 3111 (Compiled by Andualem) 15

 Accounting research – is a systematic process of investigating an issue of concern to the

ACFN 3111 (Compiled by Andualem) 16

ACFN 3111 (Compiled by Andualem) 17

 What research is…

forth between two or more steps along the way

 Second, the process is cyclical - research typically involves a cycle—or more

accurately, a helix (spiral)—in which one study spawns additional, follow-up

studies. Research begets more research. Research is rarely conclusive.

ACFN 3111 (Compiled by Andualem) 19

 The Research cycle

ACFN 3111 (Compiled by Andualem) 20

 What research is not … (often called ‘secondary research’?)

ACFN 3111 (Compiled by Andualem) 21

 Example 1 – Topic – Auditing - Audit Pricing

ACFN 3111 (Compiled by Andualem) 22

 Exercise 1 – Topic – Financial Accounting/Reporting – Financial reporting practices

ACFN 3111 (Compiled by Andualem) 23

decisions by reducing uncertainty.

your conclusions have some validity

ACFN 3111 (Compiled by Andualem) 24

 The role of research has increased in modern times b/c research

ACFN 3111 (Compiled by Andualem) 25

 Research can be used to (what can be done with research?):

ACFN 3111 (Compiled by Andualem) 26

ACFN 3111 (Compiled by Andualem) 27

 The motivation to do research may be due to the desire:

 to get a research degree along with its consequential benefits

 to get respectability, etc.

ACFN 3111 (Compiled by Andualem) 28

 availability of data, and

ACFN 3111 (Compiled by Andualem) 29

 When is Business Research Needed?

ACFN 3111 (Compiled by Andualem) 30

ACFN 3111 (Compiled by Andualem) 31