Discuss about the Defense of Positive Accounting Research.
The topic under discussion in this paper relates to the deficiencies witnessed in practice that has let down the powerful broad positivist research program. The main of this paper is to critically review the article “Half a Defense of Positive Accounting Research” written by Paul V Dunmore in order to show that the deficiencies in practice is letting down the potential of the powerful broad positive accounting theory research program. The main argument in this critique is that with sufficient practice in positive accounting theory research program, the potential powerful of the broad positivist research program cannot be realized (Dunmore 2011).
It is argued that the current practice in positive in accounting appears vastly unqualified of realizing the scientific objectives. It is further argued that despite the discrepancies in accounting practice, Kuhn’s “normal’ science descriptions gives a reprieve and a framework anchored on Kuhnian crisis and revolution as it is potential to liberate positive accounting to attain its full potential. To comprehensively capture the main argument mentioned above, the critique takes the following structure (Dunmore 2011).
The first subsection gives the brief summary of the article which focuses primarily on the main argument of the paper. This part will comprise of the aims of the article, the article’s overal findings as well as the article’s theoretical argument alongside its contribution. The second subsection delves deep into research question. This subsections will primarily identify the research question presented in the article or hypotheses.
It will also discuss the value of the hypothesis or the research question acknowledged as well as explicate whether and how the hypothesis or research question flowed from the literature review. The next third section details the theoretical framework of the article whereby the identification and discussion of this framework is featured or the article’s theoretical substance that informed the element of the research. The fourth subsection comprehensively discusses the significance and limitation of the article.
The literature is utilized in this subsection to discuss the shortcomings of the theory and the methodology utilized. It affirms whether the author has recognized such weaknesses and whether the author has drawn conclusions from the study which are justifiable by the methodology. The subsection further showcase whether such shortfalls have affected the substance and contribution of the article with respect to the accounting discipline based on the findings the author established against the study method. The last section gives the brief conclusion that summarizes the primary points as well as deducting implication for the critique.
The article being critiqued in this paper is entitled, “Half a Defense of Positive Accounting Research” written by Paul V Dunmore. It is basically circumventing around the positive accounting theory research program as coined by Watts and Zimmerman. The duo staked the claim to the Positive Accounting Theory (PAT) for their give theory. The author sought out to scrutinize the positive approach to the accounting research.
The author viewed the positive accounting research as component of the broader intellectual project of scientific research which is poised to fathom and comprehend the cause-and-effect relationships in the underlying world of research (Dunmore 2011). The article has regarded the positive accounting in the wider perspective of study program that aims at the development of the causal explication of the human behavior in the context of accounting.
The article has also undertaken an examination of epistemology and ontology of such positivist accounting program. Various tests including those of logic of statistical hypothesis while cursorily analogous to falsification criterion of Popper have also been acknowledged to stay inferior. The article has also acknowledged that despite the broad positivist research program remains potentially powerful, the deficiencies in practice impedes the realization of its full potential.
The common challenges in the impeding the program have also been recognized in the article including the casual construction of the theoretical models that needs testing besides the undue dependence on the logic of hypothesis testing (Dunmore 2011). Absence of interest in the numerical values of parameters alongside inadequate imitation to merit confidence in finding acceptance have also been further identified as common impediments to the program. The utilization of theories as the lenses for examining qualitative data instead of as explications to be tested is another common challenge facing this program. The article has further considered illustrations from relevant and good articles to justify the arguments.
The author reviewed the broader intellectual project alongside the ontological as well as epistemological assumptions to comprehend the both the significance and discrepancies of positive accounting study. From the review, it was discovered serious deficiencies in the manner that positive accounting study is performed, which impedes it from making meaningful contribution to the broader project (Watts and Zimmerman 2012).
The author held that as currently positive research is being practiced in accounting, it stays vastly incompetent to attain the scientific objectives. Nevertheless, the author remains optimistic that with the Kuhn’s explication of the “normal” science efficiently fits the positive accounting research (Dunmore 2011). The prospects of Kuhn’s description are explained in brief based on Kuhnian crisis besides revolution. It is held that such a crisis and revolution is potential to liberate the positive accounting thereby achieving its full potential (Williams 2009).
The author has used various hypotheses alongside research questions which he explained that he is not asserting their truth, but rather merely probing for an “ enthusiastic postponement of incredulity” to allow their deliberation. A list of four hypotheses has been given by the author and advanced fairly hesitantly, conscious that for several of human existence they might have been imagined outrageous and impious and that seemingly a great proportion of humanity might continue to discover the same (Dunmore 2011). The following list gives the working hypotheses imagined in a stream of intellectual enquiry in this article.
The main research questions being explored in this article are;
The theoretical framework adopted for this article emerges from a positivist perspective of a disappointed theoretical physicist whose accounting research remains positivist stressing either model building or testing (Dunmore 2011). The criticisms of the author, therefore, anchored the perspective of an individual who thinks that the research project is significant, and disillusioned by the inefficient and ineffective versions that are presently practiced in accounting. The author uses this perspective to urge both editors and referees to embrace such actions to nudge the current systems towards the liberation of positive accounting research to attain its full potential.
The theoretical substance of this paper, therefore, builds from the acknowledgment from the auditing literature review that serious deficiencies exist in the present practice in accounting research that hinders PAT research program from making a substance contribution to the broader project. This is aimed at establishing positive accounting research as a well-established social system to contribute to the scientific research project (Dunmore 2011).
This is based on the realization that adoption of Kuhn (1970) study findings, it would be hopeless to persuade elites to embrace a more than ever effective paradigm. The author further acknowledges a reprieve presented by the data that arose from Fogarty and Markarian (2007) that hinted that the comparative stance of the elite could be diminishing. Accordingly, the author held anticipated an upcoming future crisis besides an opportunity for embracing a more than ever useful paradigm (Dunmore 2011).
The author subsequently basis his argument on offering suggestions for actions by editors and referees to nudge the current systems towards liberating PAT research to hit its full potential. The author is this informed by the acknowledgement that it is significant to understand the Modus Operandi of the world and subsequently considered it as an undesirability that the associated research stream is inefficient and ineffective, and, hence he has offered specific suggestions for improvement.
The systematic review of the auditing literature through the qualitative method applied in this study faces some limitations. One of these limitations is that there is a possibility of carrying forward certain mistakes or errors made by previous authors into the current study. In addition, the method limits the generation of new findings since there is no room to gather the primary data by using secondary data that might not capture the changes effectively.
The other problems in the theory used in this study is the absence of theoretical models that are extremely specified and hence vulnerable to allow detailed testing (Dunmore 2011). The author has recognized these limitations by suggesting the need for better theoretical models. This is because the emerging elaborate models from analytical research are never framed to be testable because of their insufficient development and concentration on tractability based on concepts which are never effectively defined theoretically to enable operationalization.
The author has also acknowledged the absence of better measurements to enable rigorous testing of theoretical models due to failed operationalization of concepts (Dunmore 2011). The other limitation acknowledged is the lack of standardized reliable linear relationship-based way to be upheld in measuring every study. The frequent re-invention of measurement and re-estimation of parameters with individual sample per study has been acknowledged as the limitation that hinders positive research from hitting its full potential (Watts and Zimmerman 2010).
The author has effectively drawn theoretical conclusions from the research that are methodologically justifiable. This is because the limitations have been identified from the systematic review of the past auditing literature which have then formed the basis for suggesting improvements to enable positive research meet its full potential (Dunmore 2011). For example, the suggested the need for shifting focus away from the hypotheses testing towards parameters’ estimation after being informed by the concentration of hypothesis testing from the past studies reviewed.
The limitations have substantially adversely affected the significance of the study while they have concurrently positively affected the contribution of the article to the discipline. This is because the ineffectiveness in methodology and theories in the article did not give room to present reliable outcomes, but the discipline is enhanced going forward through suggesting recommendation that should inform subsequent studies to enable positive research meet its full potential (Dunmore 2011).
Conclusion
The article has comprehensively undertaken an examination of both epistemology and ontology of positive research besides detailed consideration of the manner in which the present practice of such a research falls short of the expectation or the requirements to run the research program satisfactorily. It has offered several suggestions for the qualitative positive research. The first discovery is a need for better theoretical models (Dunmore 2011).
The author has unearthed that models that are extremely specified and hence exceedingly vulnerable, besides that are undertake seriously as detailed testing subjects are needed. The author has also acknowledged that disappointing progress is ongoing in positive accounting research as a direct aftermath of utilizing ad hoc quantitative models that are diminished to mere statements of the anticipated sign of a connection between two variables (Dunmore 2011).
There is a finding that the exceedingly elaborate models emerging from analytical study remain unstructured for testing. This is due to either the increased concentration on tractability or insufficiency in their development based on concepts which are never theoretically well-sufficiently defined for operationalization (Christie 2007).
Another discovery is the need for much effective measurement boost the testing of theoretical models rigorously. There is a need to carefully operationalize the concepts by unearthing proxies for attention-grabbing concepts capable of showing dependable correlations with proxies for additional interesting concepts. The author calls for increased attention towards selecting accurate functional form that will usually be that with a linear association with additional concepts (Baiman 2010). The measurement has to be utilized as a benchmark in consequent researches instead of re-invention of the measurement for individual study.
The implication of this critique, therefore, is that limitations to the positive research have been identified and counteractive strategies for improvement suggested. Thus adopting such improvements will saw positive research achieving its full potential.
References
Baiman, S., 2010. Agency research in managerial accounting: A second look. Accounting, Organizations and Society, 15(4), pp.341-371.
Christie, A.A., 2007. On cross-sectional analysis in accounting research. Journal of Accounting and Economics, 9(3), pp.231-258.
Dunmore, P.V., 2011. Half a Defence of Positive Accounting Research. Available at SSRN 1955419.
Watts, R.L. and Zimmerman, J.L., 2012. Positive accounting theory.
Watts, R.L. and Zimmerman, J.L., 2010. Positive accounting theory: a ten year perspective. Accounting review, pp.131-156.
Williams, P.F., 2009. The logic of positive accounting research. Accounting, Organizations and Society, 14(5), pp.455-468.
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