Accounting research examines how accounting is used by individuals, organizations and government as well as the consequences that these practices have. Starting from the assumption that accounting both measures and makes visible certain economic events, accounting research has studied the roles of accounting in organizations and society and the consequences that these practices have for individuals, organizations, governments and capital markets. It encompasses a broad range of topics including

financial accounting Financial accounting is a branch of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of Financial statement audit, financial statements available for pu ...

research,

management accounting In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. Definition One simple definition of management accounting is th ...

research,

auditing An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon." Auditing al ...

research, capital market research, accountability research, social responsibility research and

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

research.Oler, Derek K., Mitchell J. Oler, and Christopher J. Skousen. 2010. "Characterizing Accounting Research." ''Accounting Horizons'' 24 (4): 635–670.

Academic An academy (Attic Greek: Ἀκαδήμεια; Koine Greek Ἀκαδημία) is an institution of tertiary education. The name traces back to Plato's school of philosophy, founded approximately 386 BC at Akademia, a sanctuary of Athena, the go ...

accounting research "addresses all aspects of the accounting profession" using the

scientific method The scientific method is an Empirical evidence, empirical method for acquiring knowledge that has been referred to while doing science since at least the 17th century. Historically, it was developed through the centuries from the ancient and ...

, while research by practicing accountants focuses on solving problems for a client or group of clients.Gordon, Teresa P., and Jason C. Porter. 2009. "Reading and Understanding Academic Research in Accounting: A Guide for Students." ''Global Perspectives on Accounting Education'' 6: 25-45. Academic accounting research can make significant contribution to accounting practice, although changes in accounting

education Education is the transmission of knowledge and skills and the development of character traits. Formal education occurs within a structured institutional framework, such as public schools, following a curriculum. Non-formal education als ...

and the accounting

academia An academy (Attic Greek: Ἀκαδήμεια; Koine Greek Ἀκαδημία) is an institution of tertiary education. The name traces back to Plato's school of philosophy, founded approximately 386 BC at Akademia, a sanctuary of Athena, the go ...

in recent decades have led to a divide between academia and practice in accounting.

Overview

Accounting research is carried out both by

academic An academy (Attic Greek: Ἀκαδήμεια; Koine Greek Ἀκαδημία) is an institution of tertiary education. The name traces back to Plato's school of philosophy, founded approximately 386 BC at Akademia, a sanctuary of Athena, the go ...

researchers and by practicing

accountants An accountant is a practitioner of accounting or accountancy. Accountants who have demonstrated competency through their professional associations' certification exams are certified to use titles such as Chartered Accountant, Chartered Certifie ...

. Academic accounting research addresses all areas of the accounting profession, and examines issues using the

; it uses evidence from a wide variety of sources, including financial information,

experiments An experiment is a procedure carried out to support or refute a hypothesis, or determine the efficacy or likelihood of something previously untried. Experiments provide insight into Causality, cause-and-effect by demonstrating what outcome o ...

, computer simulations, interviews, surveys, historical records, and ethnography. Research by practicing accountants "focuses on solving immediate problems for a single client or small group of clients" and involve, for example, decision-making on the implementation of new accounting or auditing standards, the presentation of unusual transactions in the

financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

, and the impact of new

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

laws on clients. Accounting research is also carried out by accounting organizations such as standard-setting bodies. For example, the International Accounting Standards Board (IASB) may initiat
research projects
for certain issues, the results of these may inform its decision whether to move the issues to its active agenda.

History of accounting research

Accounting research has undergone some significant changes in the past decades. In the 1950s, an accounting academia was established that adopted the requirements of

social science Social science (often rendered in the plural as the social sciences) is one of the branches of science, devoted to the study of societies and the relationships among members within those societies. The term was formerly used to refer to the ...

academia, such as

PhD A Doctor of Philosophy (PhD, DPhil; or ) is a terminal degree that usually denotes the highest level of academic achievement in a given discipline and is awarded following a course of graduate study and original research. The name of the deg ...

qualifications and research papers. The mid-1970s saw a shift from the dominance of

normative Normativity is the phenomenon in human societies of designating some actions or outcomes as good, desirable, or permissible, and others as bad, undesirable, or impermissible. A Norm (philosophy), norm in this sense means a standard for evaluatin ...

research to: * positive research "that uses methods from

finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

and

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

", * behavioral research drawing on psychology, * interdisciplinary research that has adapted methods from a wide variety of social sciences, *

public interest accounting Public interest accounting is a branch of academic accounting research that attempts to understand how accounting practices and the activities of the accounting profession impact the public interest. Public interest-focused accounting research she ...

research that examines the public interest consequences of different accounting practices, and * critical research using Marxian and other

critical theory Critical theory is a social, historical, and political school of thought and philosophical perspective which centers on analyzing and challenging systemic power relations in society, arguing that knowledge, truth, and social structures are ...

perspectives.

Academic research and accounting practice

Contribution of academic research to practice

The contribution of academic accounting research to accounting practice includes the assessment of current accounting practices, the development of new practices, and the development of

university A university () is an educational institution, institution of tertiary education and research which awards academic degrees in several Discipline (academia), academic disciplines. ''University'' is derived from the Latin phrase , which roughly ...

curricula In education, a curriculum (; : curriculums or curricula ) is the totality of student experiences that occur in an educational process. The term often refers specifically to a planned sequence of instruction, or to a view of the student's experi ...

: :"Academic research has an important role to play, both in assessing the extent to which existing practices are 'fit for purpose' and in developing new practices to address changing business, economic and societal needs. Research also informs the teaching curricula in universities, thus affecting the range of issues of which future generations will become aware and consider important." For example, academic accounting research "can improve the understanding of how stakeholders actually use the information accountants provide", and prior academic studies have contributed to

fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

risk assessment Risk assessment is a process for identifying hazards, potential (future) events which may negatively impact on individuals, assets, and/or the environment because of those hazards, their likelihood and consequences, and actions which can mitigate ...

, the future direction of the profession, and the impact of changing

accounting standards Publicly traded companies typically are subject to rigorous standards. Small and midsized businesses often follow more simplified standards, plus any specific disclosures required by their specific lenders and shareholders. Some firms operate on t ...

Gap between academia and practice

Several publications, including the recent accounting literature, have suggested a divide or gap between the academic and professional communities in accounting.Laughlin, Richard. 2011. "Accounting Research, Policy and Practice: Worlds Together or Worlds Apart?," in Bridging the Gap between Academic Accounting Research and Professional Practice, eds. Elaine Evans, Roger Burritt and James Guthrie. (New South Wales: The Institute of Chartered Accountants in Australia). Aspects of the divide have been suggested to include criticisms of academics for speaking with their own jargon and aiming to publish research rather than improve practice, and criticisms of practicing accountants for being resistant to changes to the status quo and reluctant to disclose data. The divide between accounting academia and practice was originally centered on whether a broader

or just technical training was the best way to educate accountants. From the 1950s, accounting academia and practice grew further divided due to the accounting academic community adopting requirements from

academia, while practicing accountants "maintained an emphasis on professional qualifications and technical skills".Guthrie, J., Roger Burritt and Elaine Evans. 2011. "The Relationship between Academic Accounting Research and Professional Practice," in Bridging the Gap between Academic Accounting Research and Professional Practice, eds. Elaine Evans, Roger Burritt and James Guthrie. (New South Wales: The Institute of Chartered Accountants in Australia). Aside from accounting academia and practice valuing different skills and requirements, a variety of factors have been proposed for the divide. One view is that a lack of training in reading academic research may lead practicing accountants "to dismiss what could be very helpful information as either too complicated or too disconnected to be useful"; while another view points to fundamental failures in academic research in

business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...

and

in general—for example that researchers have failed to effectively question prevailing economic and business models.

Types of academic accounting research

Academic accounting research addresses a range of broad ''topical areas'' within accounting, using a wide variety of ''methodologies'' and ''theories''. The following classifications highlight several important types of accounting research. They are by no means exhaustive, and many academic accounting studies resist simple classification.

Topical areas

;Financial accounting research : Examines

and the

financial market A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial marke ...

s, and focuses on the relationship between accounting information and the decision-making of external users of the accounting information in the

capital markets A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers t ...

. ;Managerial accounting research: Focuses on

and the relationship between management accounting information and its internal users, for example examining the

allocation of resources In economics, resource allocation is the assignment of available resources to various uses. In the context of an entire economy, resources can be allocated by various means, such as markets, or planning. In project management, resource allocation ...

and decision-making within an enterprise. ;Auditing research: Studies related to the

audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon." Auditing al ...

function, including auditor decision-making and the effects of auditing on financial reporting. ;Taxation research: Examines

-related issues such as market reactions to tax disclosures and taxpayer decision-making, and the relationship between accounting information and tax authorities.Coyne, Joshua G., Scott L. Summers, Brady Williams, and David a. Wood. 2010. "Accounting Program Research Rankings by Topical Area and Methodology." ''Issues in Accounting Education'' 25 (4) (November): 631–654. ;Governance research: Examines the overall corporate management of organizations. ;Accounting information systems (AIS) research: Examines issues related to

accounting information system An accounting information system (AIS) is a system of collecting, storing and processing financial and accounting data that are used by decision makers. An accounting information system is generally a computer-based method for tracking accountin ...

s, such as system security and design science. Accounting education research Focuses on the development of relevant curriculum, decision making, and applied research at the undergraduate and graduate levels.

Methodologies

;Archival research: Research that examines "objective data collected from repositories", including data collected by the researchers. ;Experimental research: Research that examines data "the researcher gathered by administering treatments to subjects". ;Analytical research:Research "based on the act of formally modeling

theories A theory is a systematic and rational form of abstract thinking about a phenomenon, or the conclusions derived from such thinking. It involves contemplative and logical reasoning, often supported by processes such as observation, experimentation, ...

or substantiating ideas in mathematical terms". ;Interpretive research: Research that emphasizes the role of language, interpretation and understanding in accounting practice, "highlighting the symbolic structures and taken-for-granted themes which pattern the world in distinct ways." ;Critical research: Research that emphasizes the role of power and conflict in accounting practice. Other possible methodologies include the use of

case studies A case study is an in-depth, detailed examination of a particular case (or cases) within a real-world context. For example, case studies in medicine may focus on an individual patient or ailment; case studies in business might cover a particular fi ...

, computer simulations and

field research Field research, field studies, or fieldwork is the collection of raw data outside a laboratory, library, or workplace setting. The approaches and methods used in field research vary across disciplines. For example, biologists who conduct fi ...

Theories

;Agency theory: Research that seeks to explain and predict accounting practices related to the principal-agent relationship between

shareholder A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...

s and

managers Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a government bodies through business administration, nonprofit management, or the political science sub-field of public administr ...

, including issues related to

information asymmetry In contract theory, mechanism design, and economics, an information asymmetry is a situation where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can sometimes c ...

and

moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs associated with that risk, should things go wrong. For example, when a corporation i ...

. ;Institutional theory: Research that focuses socially-generated rules that structure accounting practices in organizations and society. ;Structuration theory: Research that draws on the

structuration theory The theory of structuration is a social theory of the creation and reproduction of social systems that is based on the analysis of both ''Social structure, structure'' and ''Agency (sociology), agents'' (see structure and agency), without giving p ...

Anthony Giddens Anthony Giddens, Baron Giddens (born 18 January 1938) is an English sociologist who is known for his theory of structuration and his holistic view of modern societies. He is considered to be one of the most prominent modern sociologists and is ...

, and that seeks to explain accounting practices as an interaction between an individual's capability to make choices and the social rules and structures that constrain individual choices, and which are reproduced through individual behavior. ;Foucauldian theory: Research influenced by

Michel Foucault Paul-Michel Foucault ( , ; ; 15 October 192625 June 1984) was a French History of ideas, historian of ideas and Philosophy, philosopher who was also an author, Literary criticism, literary critic, Activism, political activist, and teacher. Fo ...

that sees accounting practices as dependent on historical circumstances, and as tools for disciplining individual behavior. ;Latourian theory: Research influenced by

Bruno Latour Bruno Latour (; ; 22 June 1947 – 9 October 2022) was a French philosopher, anthropologist and sociologist.Wheeler, Will. ''Bruno Latour: Documenting Human and Nonhuman Associations'' Critical Theory for Library and Information Science. Librari ...

that is "concerned with understanding accounting technologies in the context of networks of human and non-human 'actants'." ;Linguistic theory: Research that sees accounting as a discursive practice, and which draws on linguistic theory and hermeneutics.

References

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