Research Methods in

Accounting and Finance

(ACFN2131)
Chapter 0ne
The Concept of Research

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1. Meaning of Research
 It is the application of scientific method in the
study of problems
 It is a systematic attempt to obtain answers

to questions about events by applying

scientific procedures.
 a scientific and systematic search for
pertinent information on a specific topic.
 is a systematic inquiry aimed at providing

information to solve problems.

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Cont...
 systematic process of collecting and
analyzing information for some purpose
 it is a search for knowledge through

recognized methods of data collection,

analysis, and interpretation.
 It is systematic because it uses some

steps or procedures in doing this.

 Generally, the purpose of research is to

discover answers to questions through

the application of scientific procedures.

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2. Methods of Acquiring Knowledge
A. Authority: When knowledge is obtained
from individuals who are qualified
producers of knowledge.
 E.g. knowledge about religion from priests

and sheiks
 Students get knowledge from teachers, etc…

B. Tradition: When we accept without

questioning the traditions, customs or culture
of our forefathers or the society.
 E.g. it is not culturally accepted for males to

wear females’ dresses.

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Cont...
C. Experience: Our personal experience or our
observation of the experiences of other
people
 We need no one to tell us about it.
 E.g. we know rainy months in a year from our

experience.
D. Reasoning: Knowledge can be obtained
based on some rules and forms of logic

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Cont...
A. Deductive reasoning:- is a thinking process
in which one will go from general
statements to specific statements.
 from the known to the unknown.
• It consists :
 Major premise: a previously established fact
 Minor premise: a particular case to which the

fact can be applied

 A conclusion
 e.g. All animals are mortal

Cat is an animal
Cat is mortal
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Cont...
B. Inductive reasoning: we need to go
from specific to general ideas.
 e.g.

Mammals are mortal

Insects are mortal
Birds are mortal
Fishes are mortal
Plants are mortal
Reptiles are mortal
All living things are mortal

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Cont...
E. Scientific Method: It integrates the most
important aspects of the inductive and
deductive methods.
 knowledge will be obtained through a step by

step process of:

 collecting data
 analyzing it and
 reaching at a conclusion

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Cont…
 Characteristics of Scientific method
 It relies on empirical evidence
 It utilizes relevant concepts
 It makes adequate and correct
statements about population objects
 Its methodology is known to all
concerned parties
 It aims at formulating most general

scientific theories

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3. Objectives of Research
 To gain familiarity with a phenomenon or to
achieve new insights (Exploratory or
formulative research studies);
 To show accurately the characteristics of a

particular individual, situation or a group

(Descriptive research studies);
 To determine the frequency with which

something occurs (Diagnostic research

studies);
 To test a hypothesis of a causal relationship

between variables (Hypothesis-testing

research studies).
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4. Significances of Research
 In solving operational and planning problems.
(by both business and government)
 Is an aid to economic policy both for government
and business.
 For instance, government’s budgets rest in part on:
◦ analysis of the needs and desires of the people
and
◦ on the availability of revenues to meet these
needs.
 Facilitates the decisions of the policy maker.

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Cont…
 Research has its special significance in
solving various operational and planning
problems of business and industry.
◦ market research
◦ Operations research
◦ motivational research

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Cont…
 Market research is the investigation of the structure
and development of a market for the purpose of:
 formulating efficient policies for purchasing,
production and sales.
 Operations research is the application of
mathematical, logical and analytical techniques to
the solution of business problems of:
◦ cost minimization or of profit maximization or
what can be termed as optimization problems.

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Cont…
 Motivational research is concerned with the
determination of motivations underlying the
consumer (market) behavior.
 Research is equally important for social
scientists in studying:
◦ social relationships and
◦ in seeking answers to various social problems.

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Cont…
 In addition, the significance of research is:
 To those students who are to write a master’s or
Ph.D. thesis, research may mean a careerism or a
way to attain a high position in the social
structure;
 To professionals in research methodology,
research may mean a source of livelihood;
 To philosophers and thinkers, research may
mean the outlet for new ideas and insights;
 To literary men and women, research may mean
the development of new styles and creative work;
 To analysts and intellectuals, research may mean
the generalizations of new theories.
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5. Motivation in Research
 Desire to get a research degree along
with its consequential benefits;
 Desire to face the challenge in solving
the problems;
 Desire to get intellectual joy of doing
some creative work;
 Desire to be of service to society;
 Desire to get respectability.

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6. Characteristics of Good Research
The purpose of the research should be
clearly defined in terms as unambiguous
as possible
The research procedures should be
described in sufficient detail
The procedural design should be
carefully planned
The researcher should report with
complete frankness and honesty

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Cont…
 Analysis should be sufficiently adequate
 methods of analysis used should be
appropriate
 The validity and reliability of the data
should be checked carefully.
 Conclusions should be limited to those
justified by the data of the research
 Greater confidence in the research is
warranted if the researcher is:
 experienced
 has good reputation in research
 is a person of integrity.
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Cont…
 In other words, good research is:
A. Systematic: structured with specified
steps in a specified sequence.
B. Logical: guided by the rules of logical
reasoning and the logical process.
C. Empirical: based on real situation
and deals with concrete data.
D. Replicable: results to be verified by
replicating the study for decisions.

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7. Types of Research
I. Applied Vs Basic Research
 Applied Research (action research):
 Prepared to solve an immediate or practical

problem.
 Aimed at certain conclusions (say, a solution)

facing a concrete social or business problem.

 E.g. Research to identify social, economic or

political trends that may affect a particular

institution or the marketing research or
evaluation research

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Cont…
Basic Research (pure /fundamental
research):
Aims at adding new knowledge to the
existing body of knowledge.
It does not necessarily provide results of
immediate, practical use.
Is a research to develop or improve on
theories, techniques and measurements.
E.g. Research related with pure
mathematics, human behavior

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II. Quantitative Vs Qualitative
Research
 Quantitative Research: Research based on the
measurement of quantity or amount.
 It is applicable to phenomena that can be
expressed in terms of quantity

 Qualitative Research: Phenomena relating to or

involving quality or kind
 involves studies that do not attempt to quantify
their results through statistical analysis.
 E.g. Investigating of human behavior

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III. Descriptive Vs Analytical Research
 Descriptive research:
 Is description of the state of affairs as it exists
at present.
 The researcher has no control over the

variables; he can only report what has

happened or what is happening.
 Are survey methods of all kinds, including

comparative and correlational methods.

 Analytical research:
 The researcher has to use facts or information
already available, and analyze these to make a
critical evaluation of the material.
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IV. Conceptual Vs Empirical Research
Conceptual Research: related to abstract
ideas or theories.
Philosophers and thinkers generally use it to

develop new concepts.

Empirical Research: relies on experience or
observation.
It is data based research coming up with

conclusions
verified by observation or experiment.
Can also be called experimental type research

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8. The Systematic Process of Research

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Establish need for Research

 Research May not be needed if:

 Information is already available
 There is insufficient time for Research
 Resources are not available
 Cost Outweigh the value of Research

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A. Formulating the Research Problem
 Is difficulty which requires solution
 Takes place when there is a
problematic situation and a need to
solve the problem.
 Can be identified from personal
observation, theory, professional
literatures and discussion with experts.
 Initially the problem may be stated in a

broad general way and then narrowed

down to a specific research problem.

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B. Review the Literature
 Extensive literature survey connected with the
problem.
Two types of literatures:

Conceptual: is concerned with related

concepts and theories.
Empirical: are studies made earlier which are
similar to the one proposed

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C. Formulating Hypothesis
 Is a tentative assumption made in order to draw out
and test its logical or empirical consequences.
 Provides focal point for research.
 The role is to guide the researcher by delimiting the

area of research and to keep him on the right truck.

 There are two types of hypothesis:

i. Null Hypothesis: is a default position.

 It hypothesizes that there is no relationship

between two variables.

ii. Alternative Hypothesis: is the opposite of null
hypothesis
 Hypothesizes that there is r/ship between two

variables .
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D. Preparing Research Design
 It is stating the conceptual structures with
in which research would be conducted.
E. Determining Sample Design:
 Deciding the way of selecting a sample

called sample design.

 Is a plan determined before any data are

actually collected for obtaining a sample

from a given population.

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F. Identify information types and sources:
 Two types of information are available

to a researcher i.e. primary and

secondary.
G. Determine Method of data
Collection: includes:
 telephone
 mail
 personal interviews
 Observations etc.

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H. Collecting the Data (Execution):
 Collecting the required data to solve the
research problem.
 Primary data can be collected either
through experiment or through survey.
 In the case of a survey, data can be
collected through:
 Observation
 Personal interview
 Telephone interviews
 Questionnaires, etc.

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I. Analysis of Data (Including Test of
Hypothesis):
 Entering data in to computer
 Inspecting it for errors
 Running tabulation and various statistical

tests.
J. Drawing Conclusions and Report the final
result:
 Making generalizations
 The conclusions must be based on the data

and the analysis within the framework of the

research study
 Communicating the result
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9. Value of Business Research for Managers

 Reduction of uncertainty
 improvement in the quality of
decision making
 Business Research Methods can be
employed in:
(1)Identification of problems or
opportunities
 For strategy planning
 For analysis of internal and
external organizational
environment
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Cont…
(2) Diagnosing and Assessment of problems
or opportunities
 Reasons and causes for the situation.
 It asks what happened and why?

(3)Selection of the best and Implementation

(4) Evaluating the Course of Action

 To determine whether activities have
been properly implemented and have
accomplished what they intended to do
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THE END!

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