What is accounting research?

Introduction

Accounting research is hard to define because it has shifted over time. As a rough overview, early accounting research (pre-1960s) was mostly normative (i.e., argued for the “correct” accounting treatment, or what should be). With the advent of the Journal of Accounting Research, advances in finance such as the efficient market hypothesis, creation of large data sets and the statistical abilities to analyze them (i.e., computers), and the publication of Ball and Brown’s seminal work in 1968, accounting research moved into positive research (i.e., examining what is rather than what should be). Although this change has had its critics, it has resulted in a significant increase in research output (and many new journals).

A cynical definition of research is: any paper that cites a lot of other accounting papers must be accounting research. This “quick and dirty” definition restricts accounting research to topics and methodologies that are well established in the literature; it is “safe” but somewhat limiting. More rigorously, Oler, Oler, and Skousen (2009) attempt to characterize accounting research by looking at the topics, research methodologies, and citations made by papers published in a set of six top accounting journals (AOS, CAR, JAE, JAR, RAST, and TAR). Their work can be criticized, though, because they do not consider all accounting journals, and because their categorizations of topics (6 of them) and research methodologies (7 of them) are broad. In spite of shortcomings, their paper appears to be the first that attempts to characterize and define accounting research, which they define as follows: “accounting research is research into the effect of economic events on the process of summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of reported information on economic events.”

Professors typically will choose a subject area and a methodology in which to focus their efforts. Subject areas include the topical areas considered under the umbrella term "accounting." These include information systems, auditing and assurance, corporate governance, financial, forensic, managerial, and tax.

Accounting Research Topical Areas

The following definition of research come from a research paper by Coyne, Summers, Williams, and Wood (2010, available here).

Accounting Information Systems (AIS)

Studies which address issues related to the systems and the users of systems that collect, store, and generate accounting information. Users are defined broadly to include those involved in collection, storage, or use of accounting information or even the implementation of the system. These systems may be electronic or not. Research streams include, but are not limited to design science, ontological investigations, expert systems, decision aides, support systems, processing assurance, security, controls, system usability, and system performance.

Auditing

Studies in which the topical content involves an audit topic. These studies vary widely and include, but are not limited to, the study of the audit environment—external and internal, auditor decision making, auditor independence, the effects of auditing on the financial reporting process, and auditor fees.

• For a summary of audit fee research see Hay, Knechel, and Wong (2006, available here)

Financial

Studies that address the topical content of financial accounting, capital markets, and decision making based on financial accounting information.

• For a review of the financial reporting research see Beyer, Cohen, Lys, and Walther (2010, available here)
• For a review of the capital markets research in accounting see Kothari (2001, available here)
• For a review of empirical research on accounting choice see Fields, Lys, and Vincent (2001, available here)

Managerial

Studies that examine issues regarding budgeting, compensation, decision-making within an enterprise, incentives, and the allocation of resources within an enterprise.

• For a review of empirical research in Managerial Accounting see Ittner and Larcker (2001, available here)

Tax

Studies that examine issues related to taxpayer decision-making, tax allocations, tax computations, structuring of accounting transactions to meet tax goals, tax incentives, or market reactions to tax disclosures.

• For a review of tax research see Hanlon and Heitzman (2010, available here) and Shackelford and Shevlin (2001, available here)
• For a review of research in accounting of income taxes see Graham, Raedy, and Shackelford (2010, available here)

Other Topical Areas

Studies that do not fit into one of the other topical areas. The topical areas in these studies vary significantly and include such things as education, methodologies, law, psychology, history, the accounting profession, work environment, etc.

Accounting Research Methodologies

A researcher will select a methodology to determine how the research is to be conducted. There are three main methodologies for research in accounting: archival, analytical, and experimental.

One thing to avoid when discussing methodologies is to refer to one of the methods as "empirical" to differentiate from other methods. This is most often done by archival researchers who refer to their research as empirical and not to include experimental research under the "empirical umbrella." Empirical research is research that is verifiable based on observation or experimentation; thus, archival and experimental research are both empirical in nature.

Analytical

Researchers who utilize analytical methods base analysis and conclusions on formally modeling theories or substantiated ideas in mathematical terms. These analytical studies use math to predict, explain, or give substance to theory.

• For a recent example of analytical research in accounting, see Gao (2010, available here)

Archival

Researchers who utilize archival methods base analysis and conclusions on objective data collected from repositories of third parties. Also included are studies in which the researchers collected the data and in which the data has objective amounts such as net income, sales, fees, etc.

• For a recent example of archival research in accounting, see Ball and Shivakumar (2008, available here)

Experimental

Researchers who utilize experimental methods base analysis and conclusions on data the researcher gathered by administering treatments to subjects. Usually these studies employed random assignment; however, if the researcher selected different populations in an attempt to “manipulate” a variable, we also included these as experimental in nature (e.g., participants of different experience levels were selected for participation). Experimental research can include analyzing both economic and behavioral factors.

• For a recent example of experimental research in accounting, see Magilke, Mayhew, and Pike (2009, available here)

Other Research Methodologies

Studies that did not fit into one of the other methodological categories. The methodologies in these studies vary significantly and include such things as surveys, case studies, field studies, simulations, persuasive arguments, etc.

How accounting research can make a difference in the world

• Affect practice (usually high level decision makers, through textbooks)
• Mentors researches thinking who then changes world through consulting, professional service, teaching
• Affect standard setters

For a thorough description of each methodology as it applies to each subject area, the following matrix has been created:

	AIS	Auditing	Financial	Managerial	Tax	Other Topics
Analytical	Analytical AIS	Analytical Auditing	Analytical Financial	Analytical Managerial	Analytical Tax	Analytical Other Topics
Archival	Archival AIS	Archival Auditing	Archival Financial	Archival Managerial	Archival Tax	Archival Other Topics
Experimental	Experimental AIS	Experimental Auditing	Experimental Financial	Experimental Managerial	Experimental Tax	Experimental Other Topics
Other	Other AIS	Other Auditing	Other Financial	Other Managerial	Other Tax	Other Other Topics

---

Main Page ► So you want to get a Ph.D.? ► What is accounting research? Here are the different research areas in accounting. Great entry-level article on understanding accounting research.