Research Methods in

Accounting and Finance

(ACFN2131)
Chapter One
The Concept of
Research
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 1. Meaning of Research
• The word Research is a combination of two words;

• Re- again and again

• Search- find out something.

Therefore; Research is finding something (truth) again

and again.
Research means searching something again. “Asa gorguari zendo
yawetal aynet neger” OR “Splitting hairs”.

• Research means the search for knowledge. 2

 Definition of Research (Scintific research)
• Research (Scientific research) may be defined as
an organized, systematic, data-based, critical, objective,
scientific inquiry or investigation into a specific problem, undertaken
with the purpose of finding answers or solutions to it.

• Actually related to our profession there is close

proximity in the methods used between research
and auditing.
• Research is a systematic investigation made to
solve problems facing individuals, businesses, the
government and society in general. 3
• Research is a diligent search, studious inquiry,
investigation or experimentation aimed at the
discovery of new facts and findings;

• Or, broadly, it may relate to any subject of

inquiry with regard to collection of
information, interpretation of facts, and
revision of existing theories or laws in the light
of new facts or evidence.

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 Research differ from unplanned
observation
Research is…
Systematic- so ordered,planned, &disciplined.
Controlled- researcher can have confidence on
the outcome/results.
Empirical- putting beliefs, ideas, assumptions to
test.
Critical- many truths are tentative and subject to
change as a result of subsequent research.
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 2. Methods of Acquiring Knowledge
(Methods of Knowing)

A. Authority (Credential Credential-Based Knowing Knowing)

knowledge is obtained from individuals who are qualified producers of knowledge.

“Truth is true because an authority says so”

E.g. knowledge about religion from priests and sheiks; Students get knowledge

from teachers, etc…

Problem
 Frequently our trust in experts is misplaced. Credentials don't always give experts

the corner on truth.

 Note too that authorities, however, credentialed they are, can sometimes

intentionally mislead us. Experts can distort information when it is in their vested
interest to do so. 6
 Methods of Knowing….
B. Tradition (The Method of Tenacity):

 When we accept without questioning the traditions, customs, or culture of our

forefathers or the society.

 acceptance of a belief based on Refers to the acceptance of a belief based on

the idea that “we have always known it to be this way”.

 Truth is true because one believes in it truly is true because one believes in it

 Acceptance of beliefs and customs, in which we have been socialized, as true

and then behave with it and ⇒ Stood still in front of contradicting evidence.

E.g. it is not culturally acceptable for males to wear female dresses.

Problem: It offers no means for correcting erroneous ideas. 7

Methods of Knowing….
(
C. Experience Method of Common Sense ): Our personal experience or our

observation of the experiences of other people

 We need no one to tell us about it.

 It is based on our own past experiences and our perceptions of the world

 E.g. we know rainy months in a year from our experience.

Problems
 Our experiences and perceptions of the world may be quite limited;
Because personal experience is tied to the individual and unique
circumstances, it is not the best basis for generalized knowledge.
 it may also prevent us from understanding new ideas 8
 Methods of Knowing….
D. Reasoning

Knowledge can be obtained based on some rules and forms of logic

I. Deductive (confirmatory) reasoning:- is a thinking process in

which one will go from general statements to specific statements.

 It is a top-down or theory/hypothesis testing approach to research.

 from the known to the unknown.

It consists :
i. Major premise, a previously established fact
ii. Minor premise, a particular case to which the fact can be
applied 9
 Example of Deductive (confirmatory) reasoning

All animals are mortal….Major premise

Cat is an animal….. Minor premise

Cat is mortal… Conclusion

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 Reasoning ...
B. Inductive (exploratory) reasoning: we need to go from
specific to general ideas.
- It is a bottom-up or theory generation approach to research.
 e.g.

Mammals are mortal….. Insects are mortal

Birds are mortal

Fishes are mortal
Plants are mortal………Minor premise
Reptiles are mortal…….Minor premise
All living things are mortal……. Conclusion Major premise
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Reasoning…..

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Cont...
E. Scientific Method: It integrates the most important
aspects of the inductive and deductive methods.

The scientific method of knowing is the scientific research

 knowledge will be obtained through a step by step process
of:
 collecting data

 analyzing it and

 reaching at a conclusion
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Scientific Method……..

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3. Purpose of Studying Research Methods

 Research has a fundamental phenomenon for

the world’s civilization.

 Research fosters development.

 The only way to become competent in research

is by doing it.

 But before research can be put in to practice,

some skills must be acquired. 15
Cont…

Acquiring research skills may be helpful:

 To get more information before making certain

decisions.
 To do a research study for a higher-level executives
when we called up.
 To evaluate research done by others.
 For a career position as a research specialist in

various areas of our discipline. 16

4. Objectives of Research
“The broad goal of scientific research is problem-solving
(Theoretical or practical)”

I. To gain familiarity with a phenomenon or to achieve new

insights (Exploratory or formulative research);

II. To show accurately the characteristics of a particular

individual, situation or a group (Descriptive research );

III. To determine the frequency with which something occurs

(Diagnostic research);

IV. To test a hypothesis of a causal relationship between

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5. 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.

• To 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 government for making appropriate policy.

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Cont…

 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 analysts and intellectuals, research may mean the

generalizations of new theories.

 To social scientists in studying social relationships

and in seeking answers to various social problems.
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6. 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 serve society (solving problem);

 Desire to get respectability (reputation). 20

Managerial value of research

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7. Value of Business Research for Managers

 Reduction of uncertainty
 improvement in the quality of decision making
 Research Methods has 4 stages

(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

 To know 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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8. 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

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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 of deduction and induction.

C. Empirical: based on real situation and deals with

concrete data.

D. Replicable: results to be verified by replicating the

study for decisions. 26
9. Types of Research
Commonly, Research can be classified based on:

Goals of Research

Specific Objectives of Research

Research Approaches

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 I. Based on Goals of Research

Applied Vs Basic Research

1.1 Applied (action/impact assessment/Evaluation research):

 Prepared to solve an immediate or practical problem.

 Aimed at certain conclusions (say, a solution) facing a concrete

social or business problem.

 Example. 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…
1.2. Basic (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. Based on Research Approaches
Quantitative Vs Qualitative Vs Mixed

2.1. Quantitative Research: Research based on the

measurement of quantity or amount.
 It is applicable to phenomena that can be expressed in terms of
quantity

2.2. Qualitative Research: Phenomena relating to or

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

2.3. Mixed research

It is the type of research in which a researcher
combines elements of qualitative and quantitative
research approaches for purposes of
 breadth and depth of understanding and
corroboration.
 To expand an understanding from one method
to another, to converge or confirm findings from
different data sources
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III. Based on specific objectives
Descriptive Vs Analytical Vs Exploratory

 Descriptive research:
 Is the description of the state of affairs as it exists at
present.

 The researcher has no control over the variables

 Report what has happened or what is happening.

 It tries to answer questions such as how many, how,

and what is happening. 32
 a) Descriptive research….
 Descriptive research presents a picture of the specific
details of a situation, social setting, or relationship.
 The major purpose of descriptive research, as the
term implies, is to describe characteristics of a
population or phenomenon.
 Descriptive research seeks to determine the answers
to who, what, when, where, and how questions.
 Labor Force Surveys, Population Census, and
Educational Census are examples of such a research.

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 b) Analytical(Explanatory/Causal) research:

 The researcher has to use facts or information already available

and analyze these to make a critical evaluation of the material.
 The desire to know “why,” to explain, is the purpose of
Explanatory Research.
 It builds on exploratory and descriptive research and goes on
to identify the reasons for something that occurs.
 Explanatory Research looks for causes and reasons.

For Example, descriptive research may discover that 10% of the

parents abuse their children, whereas the explanatory
researcher is more interested in learning why parents abuse
their children.

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 c) Exploratory /Formative Research

 You may be exploring a new topic or issue in order to

learn about it.
 If the issue was new or the researcher has written little
on it, you began at the beginning. This is called
exploratory research.
 The researcher’s goal is to formulate more precise
questions that future research can answer.
 Exploratory research may be the first stage in a
sequence of studies.
 A researcher may need to know enough to design and
execute a second, more systematic and extensive study.
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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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 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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10. The Systematic Process of Research

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A. Formulating the Research Problem
 Is difficulty that requires solution
 Takes place when there is a problematic situation
 Can be identified from:
personal observation
theory
professional literatures
discussion with experts
 Initially it is stated in a broad general way
 Then narrowed down to a specific research problem.
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A. Formulating the Research Problem

• In business research, the adage “a problem well defined

is a problem half solved” is worth remembering.

• Similarly, Albert Einstein noted that “the formulation of

a problem is often more essential than its solution.”

• These phrases emphasize that an orderly definition of the

research problem provides direction to the investigation.

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 Research Problem

• Careful attention to problem definition allows the

researcher to set the proper research objectives.

• When the purpose of the research is clear, the chances

of collecting the necessary and relevant information,

and not collecting surplus information, will be much

greater.
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B. Review the Literature
 Literature review a directed search of published works,
including periodicals and books, that discusses theory and
presents empirical results that are relevant to the topic at hand.

 Extensive literature survey connected with the problem.

Two types of literatures:

Conceptual/Theoretical literatures : is concerned with related

concepts and theories.

Empirical literatures : are studies made earlier which are

similar to the one proposed.
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C. Formulating Hypothesis
Hypothesis is a tentative assumption (prediction) made.

 Test logical or empirical consequences.

 Guide the researcher by delimiting the area of research

 Keep the researcher 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

 Research design a master plan that specifies the methods

and procedures for collecting and analyzing the needed
information.
 Stating the conceptual structures with in which research would
be conducted.

E. Determining Sample Design

 Deciding the way of selecting a sample

 A plan determined before data are collected for obtaining a

sample from a given population. 44
F. Identify Data types and sources

 Two types of data/information are available

primary and secondary.

G. Determine Method of data Collection

 includes:

telephone

mail

personal interviews

Observations etc. 45
 H. Collecting the Data (Execution)
 Collecting the required data to solve the research problem.

 Primary data can be collected either through experiment or

survey.

 In the case of a survey, data can be collected through:

 Observation

 Personal interview

 Telephone interviews

 Questionnaires, etc. 46
 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 (reporting the findings).

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THE END!

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 Quiz 5%

• Write down the major elements of

scientific research process.

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