PowerPoint to accompany

Chapter 1
Understanding Theory

Gaffikin Accounting Theory 2008 Pearson Education Australia

WHAT & WHY THEORY?

WHY that from which practice

proceeds WHAT multiple meanings

eg linked hypotheses or propositions Terms: postulates, principles, concepts,

reasoning, logical analysis, explanation, description, prescription

RESEARCH & THEORY

Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

PHILOSOPHICAL FOUNDATIONS
ONTOLOGY (world view) REALIST SOCIAL CONSTRUCTIONIST
Solipsism

EPISTEMOLOGY (theory of

knowledge) METHODOLOGY
METHODS
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

Development of Western Epistemology

Classical Greek Scholars Socrates
Definitions Induction

Plato
Objectivism

Aristotle
Deduction - syllogism

Scholastics hermeneutics
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

MODERNITY
Renaissance THE ENLIGHTENMENT (18th Century -) Scientific reasoning Atomistic
Descartes method value freedom Hobbes rational choice theory Adam Smith rational self-interest invisible hand

Organic

Empiricism
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

The tenets of positivism - the (scientific) status of knowledge claims included

Scientific statements have to be empirically

grounded. Scientific observations have to be repeatable A single (scientific) method is necessary to ensure the universality of statements and observations. Science will advance through theories which, if empirically verified, become scientific laws. Scientific laws in time will be integrated into a single system of knowledge and truth. Methodology also involves notions of reduction, causality and simplicity
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

LOGICAL POSITIVISM
[20th century positivism]
ALL MEANINGFUL KNOWLEDGE MUST

BE: Empirical (it is an empiricist epistemology) Objective (value neutrality) Scientific Inductively derived Verifiable
adhere to the verification principle testable
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

FALSIFICATIONISM
[Popper]
A proposed solution to the problem of

induction Meaningful statements must be falsifiable

Example: profit announcements do not affect

share prices
NOT falsifiable: share prices either respond or ignore profit announcements

Testing crucial
Importance of statistical inference
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

SCIENTIFIC REVOLUTIONS
[Thomas Kuhn]
Knowledge is NOT cumulative Paradigms
Normal and revolutionary science

Knowledge claims are incommensurable Other explanations of scientific knowledge Lakatos

Research programs

Feyerabend
Methodological pluralism

Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia

ACCOUNTING KNOWLEDGE
Is the method of science an appropriate

basis for developing accounting knowledge? The genealogy of accounting knowledge

The notion of discipline The importance of the past (in generating

accounting knowledge)
Gaffikin Accounting Theory: Research, regulation and accounting practice 2008 Pearson Education Australia