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ACFI 3001
Accounting
Theory
Week 1 – Part 1
Research Proposal

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Research proposal
• Research proposal can help you develop and master three
essential skills: (1) research skills; (2) critical thinking skills; (3)
communication skills (writing in academic English).
Research skills – you may use University of Newcastle Library and
Google Scholar to identify academic publications that you need for your
research proposal.
Critical thinking skills – in order to demonstrate that your research
proposal can contribute to prior academic publications, you need to
show what is missing in them.
Communication skills – your research proposal is expected to be
written in academic English with consistent and correct referencing.
• Research proposal serves as a bridge to Bachelor of Commerce
(Honours).

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Research proposal
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Structure

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Research proposal
• What should be included in a research proposal?

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3 2

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Elements of the Research Process

Here you can write down

your research proposal.

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Step I

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1. Select topic & 4. Decide research questions

• Research questions must be relevant in

terms of the topic and the justification
for studying it.

• Research questions must also be

researchable in terms of scale and scope
and answerability.

• Research questions usually comprise two

concepts/ terms.

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1. Select topic & 4. Decide research
questions
• A good example: The impact of the
JOBS Act on management
opportunism*
• Concept A = the JOBS Act (the
Jumpstart Our Business Startups Act,
or JOBS Act, is a legislation intended to
encourage funding of small businesses
in United States)
• Concept B = management opportunism
(a manager exploiting opportunities in
his/her own self-interest) 10
1. Select topic & 4. Decide research
questions
• The relationship between Concept A
and Concept B can be association OR
causation.
• Is the relationship described in our
example association or causation?
• For Assessments 1&2, you may discuss
association, because causation is very
difficult to establish in accounting
research.

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1. Select topic & 4. Decide research
questions
• An association research question
template: How is Concept A associated
with/ related to Concept B?

• A causation research question template:

How does Concept A affect/
cause/impact/ contribute to/ lead to
Concept B?

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Association or causation is very critical.

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Decide which area of accounting you want to focus
in your research proposal
• Financial accounting – it focuses on the link between accounting
information and capital markets
• Management accounting – it considers the link between accounting
information and internal users
• Auditing – it is about the audit function
• Tax – it examines the link between accounting information and
taxation authorities as well as the capital markets
• Corporate governance – it focuses on how organizations are governed,
which in turn driving or being drove by accounting information
• Information systems – it is about systems that collect, store and
generate accounting information
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Research Of or About Accounting

• Research of or about accounting considers the role of accounting itself

• It considers questions such as:

1. What is the role of accounting?
2. Is accounting information useful in investment decisions?
3. Should accountability or decision usefulness be the key goal of
accounting?
4. What impact does culture have on accounting?
5. What role has accounting played in the rise of capitalism or
environmental degradation?

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Research In Accounting

• Research in accounting focuses at the more micro level on issues within

accounting

• It considers questions such as:

1. What measurements are being used?
2. What measures should be used?
3. What impact do changes in specific accounting policies have on share
prices?

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1. Select topic & 4. Decide research questions
• Where can you identify a research question?
Brainstorming
Shortcut 1:
https://www.cpaaustralia.com.au/about-cpa-
australia/our-organisation/grants-honours-and-
awards/global-research-perspectives-program
Shortcut 2: https://www.afaanz.org/afaanz-
research-grants
• Your research question MUST be in the fields
of accounting.
• ONE (and JUST ONE) research question is
sufficient.
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Step II

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2. Review literature – This step is the ESSENTIAL basis of
research proposal development. WHY?
Carefully reading prior studies helps you to understand the following five
aspects:
1. What are the authors doing? (Research question should be relevant/ similar/
identical to yours)
2.Why are they doing it? (Motivations: how does it add to literature – gap /
extend streams of literature in the same vein, addressing problems,
investigating different settings i.e. countries, accounting regimes, economic
significance of the settings)
3.How did they develop hypotheses/ propositions? (Which theories/ theory they
use?)
4.How did they do it? (Research method: different sample construction, sample
size, periods, measures used and any innovative/new measures etc.)
5. What did they find? (Findings: you need to know their findings to argue that
your research proposal can add to literature)
6.What are the implications of results? (Practical implications: results are
beneficial to which group e.g. investors, regulators and standard setters and
WHY? Any potential future research and untested ideas which aim to grow
the body of literature) 19
2. Review literature – How to reassemble what you learnt
from review of literature to develop your own research
proposal?
Review of literature Your research proposal
• What are the authors doing? • Introduction
• Why are they doing it?
• Research aim and
• How did they develop
hypotheses/ propositions? question
• How did they do it? • Review of literature
• What did they find? • Study/project design
• What are the implications of
results?
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2. Review
literature

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2. Review literature
• It is important that you plan this
search carefully to ensure you
locate relevant and recent
literature.

• This will enable you to establish

what research has been
previously published in your
area and to relate your own
research to it.

• Literature searches are a time-

consuming process which takes
far longer than expected.
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2. Review literature
Step 1 – Define parameters
You need to be clear about the following:
• language of publication (for example English);
• subject area (for example accountancy);
• business sector (for example manufacturing);
• geographical area (for example Europe);
• literature type (for example journals and books).
Step 2 – Generating key words
The identification of key words or search terms is the most important part of planning your
search for relevant literature. Key words are the basic terms which describe your research
question(s) and objectives. Key words can be identified using one or a number of different
techniques or a combination. These might include:
• Authors names
• Discussions;
• Initial reading;
• Brainstorming;
• Relevance trees. 25
2. Review literature
Step 3 – Relevance trees
• which key words are directly relevant to your research question(s) and objectives;
• which areas you will search first and which you will search later;
• which areas are more important, as these tend to have more branches.

To construct a relevance tree you proceed as follows:

1. Start with your research question or objective at the top level.
2. Identify two or more subject areas which you think are important.
3. Further subdivide each main subject area into sub-areas which you think are of
relevance.
4. Further divide the sub-areas into more precise sub-areas which you think are of
relevance.
5. Identify those areas which you need to search immediately and those on which
you particularly need to focus.
6. As your reading and reviewing progresses, add new areas to your relevance tree.

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2. Review literature

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2. Review literature

Step 4 – How to look: Your work with the literature should always
involve a set of questions
What do I need to know?
How will I know when I’ve found it?
How precise an answer do I require?
How much effort should be devoted to related data that could be relevant,
but might not be?
How important is it that I should find the answer?
How long will I spend in looking for the answer?’
How recent should the answer be?
Is there anything I really must know?
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2. Review literature
Step 5 – Evaluating the literature

Sufficiency

• When further searching provides mainly

references to items you have already read.

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2. Review literature
Step 5 – Evaluating the literature

Relevancy

• How recent is the item?

• Is the item likely to have been superseded
• Is the context sufficiently different to make it marginal to your research question(s) and
objectives
• Have you seen references to this item (or its author) in other Items that were useful?
• Does the item support or contradict your arguments? For either, it will probably be worth
reading!
• Does the item appear to be biased? Even if it is, it may still be relevant to your critical review.
• What are the methodological omissions within the work? Even if there are many, it still may
be of relevance!
• Is the precision sufficient? Even if it is imprecise, It may be the only Item you can find and so
still be of relevance.
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2. Review literature
Step 6 – Recording the literature
Journal Book Chapter in an edited book

Author(s)— surname, first Author(s) — surname ,first Author(s) of chapter—

name initials name initials surname, first name initials

Year of publication (in Year of publication (in Year of publication (in

brackets) brackets) brackets)
Title of article Title and subtitle of book Title of chapter
(underlined or in italics)
Title of journal (underlined Edition Author(s) of book —
or in italics) surname,first name initials
Volume Place of publication Title and subtitle of book
(underlined or in italics)
Part/issue Publisher Edition

Page numbers Place of publication

Publisher

Page numbers of chapter 31

Step III

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3. Devise conceptual framework

After critically reading the literature, you are expected to:

1. Develop an expected answer to your research question;
2. Refer to a theory/ theories to justify your expected answer;
3. Clearly communicate your expected answer as a hypothesis.

Apparently, this expected answer is based on your understanding of

the literature.

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3. Devise conceptual framework

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3. Devise conceptual framework

The inductive and deductive approaches provide an objective

alter­native to the conduct of research.
• The inductive approach – new theory is developed on the basis
of fresh observations (as is most commonly the case in hard
sciences, like astronomy);
• The deductive approach – theory provides the basis for the
testing of empirical observations (and which is the most
common form of positivist accounting research).

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3. Devise conceptual
framework
• Which theory is appropriate for our
example on the 10th slide?
• Given that we talk about management
opportunism, agency theory is a good
option.
• In Assessments 1&2 (Research Aim and
Question section), you need to describe
and apply a theory that is relevant to your
research question.

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3. Devise conceptual
framework
To apply agency theory to our example on
the 10th slide, we need to discuss at least
three questions in Assessments 1&2:
• Why the implementation of the JOBS Act
motivates managers to take advantage of
investors?
• Which agency problems (i.e., horizon
problem, risk aversion and dividend
retention) are relevant here?
• Are there alternative explanations
challenging agency theory? 37
3. Devise conceptual
framework
• A probable template of
hypothesis: there is a positive
OR negative (but not both)
relationship between Concept A
and Concept B.
• Another probable template of
hypothesis: there is a significant
relationship between Concept A
and Concept B.

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Step IV
Decide which research method you want to
mention in your research proposal
• Archival
• Experimental
• Surveys
• Case studies
• Field studies

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5. List information needs & 6. Decide research
strategy
• Qualitative approach versus quantitative approach
• In your research proposal, ONLY ONE approach is
necessary.

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5. List information needs & 6. Decide research
strategy

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5. List • Operational definitions depend on the knowledge
that you acquired from reading prior literature. In
information Assessments 1&2, you may ‘copy’ how prior
needs & 6. literature measures or specifies a concept, rather
than improvising operational definitions.
Decide research
• Why? A concept can be straightforward. However,
strategy how to measure the concept can be problematic.
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5. List information
needs & 6. Decide
research strategy
• Audit Quality (as a concept):
“greater assurance that the
financial statements
faithfully reflect the firm‫׳‬s
underlying economics,
conditioned on its financial
reporting system and innate
characteristics” (DeFond
and Zhang, 2014, p. 281).
• How to measure Audit
Quality?

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5. List information needs & 6. Decide research strategy

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5. List information needs & 6. Decide
research strategy
• Operational Definition A = the implementation
of the JOBS Act (you may have other options,
including the announcement of the JOBS Act)
• Operational Definition B = earnings
management (you may have other options,
including the use of language in annual report)
• Operational definitions measure or specify
Concepts. For example, when we discuss a
person’s physical health (Concept), we need to
consider blood pressure, height, weight, bone
mass measurement, etc. (they are Operational
definitions of physical health).
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5. List information needs & 6. Decide
research strategy
• For our example on the 10th slide, we propose two operational definitions:
(1) the implementation of the JOBS Act, and (2) earnings management.
• In Assessments 1&2 (Study/ project/ research design), you need to
elaborate many details of the operational definitions. For examples, how to
measure earnings management? Which formula you will use? Which
sample period will be selected? Which country will be included in your
sample? Where to get data?
• In addition, you need to discuss which research method you would use to
analyse or test the relationship between Operational definition A and
Operational definition B.

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Where can you find more information about qualitative
and quantitative approaches?

• Shortcut: https://libguides.newcastle.edu.au/researchmethods
• Two textbooks (if you are interested in this regard)

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Homework
Would you find the following two papers?
1. Guthrie, J., & Parker, L. D. (1989). Corporate social reporting:
a rebuttal of legitimacy theory. Accounting and Business
Research, 19(76), 343-352.
2. Patten, D. M. (1991). Exposure, legitimacy, and social
disclosure. Journal of Accounting and Public Policy, 10(4),
297-308.

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