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Illustration 3 - limitation of behavioural research

How generalizable are the results derived from behavioural accounting research
Suggested solution
Care would need to be taken in generalising the results from behavioural research. lf we were to
try to generalise the results from the research to the real world' we would need lo ensure that the
experiment was undertaken in a setting that was as possiblein practice this will be difficult. In
the real world there would typically be real incentives and ongoing implications from making
particular decisions--this usually cannot be replicated in a laboratory setting. Related to the
above point is the realism of the cues provided to the subjects. It is very difficult to replicate the
various cues that would typically be available in The workplace. Also knowing that the result on
a particular judgement are being carefully scrutinised could clearly be expected to have an effect
on the decision-making processes being employed.
A number of studies also use students as surrogates for auditors, lending officers, and so on. This
has also been seen as a limitation in terms of generalisability because such people have limited
training in the area and have not had the same background experiences as the parties for whom
they are acting as proxies (there has been some research that shows students do make
Judgements comparable to those of experts. However, such findings are not universal)
A further criticism that we can raise relates to the typically small number of subjects used in
experiments. Whether results based on relatively small samples can be expected to be
generalisable to the larger population can be questioned
Also, there is typically no real accountability for the decisions being made within the
experiments, such that the implications of making inappropriate decisions within an experimental
setting have very different implications than making such decisions in the 'real world'. Hence,
care would need to be taken in generalising the results of the research.
Lastly, there are also the issues of differences in cultures, religions and so forth. Because it is
reasonable to argue that an individuals use of particular cues will be influenced by factors such
as culture and religion, great care would need to be taken in generalizing the results of
behavioural research across different countries.

Illustration 4
Positive accounting theory and Agency Theory make certain central assumptions about what
influences peoples decisions. How does this differ from perspectives embraced within
behavioural research in accounting?
Suggested solution (continued)
Economics-based theories such as Positive Accounting Theory and Agency Theory make
assumptions about what motivates human actions (for example, a quest to maximise personal
wealth), and such motivations are attributed to all individuals. By contrast behavioural research
studies individuals' actions and choices and typically does not make broad-based assumptions
about how all individuals behave, or about what motivates them to behave in a particular way
(although there could be an acceptance that many individuals will tend to adopt specific
strategies or biases when making decisions).
Further behavioural research is typically grounded in organisational theory, and theories from
psychology and sociology rather than from economics. However, like theories such as Positive
Accounting Theory. Legitimacy Theory and Institutional Theory (discussed in Chapters 7 and 8),
behavioural research can be thought of as positive research', because it seeks to explain particular
actions or behaviours (in contrast to normative research', which prescribes activities should be
undertaken). However, unlike some theories that strictly limit their attention to explaining and
predicting behaviour at an individual level, behavioural research typically also concerns itself
with improving the quality of decision making hence there can ultimately be a nonnative
component to behavioural research.