ACC563 Assignment 2 - Week 4: Assignment #2 Week 4:...

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Week 4: Assignment #2 1 Week 4: Assignment #2 ─ Research Methodologies and the Use of Accounting Information Strayer University Acc 563 – Advanced Accounting Theory Professor: Alfred Greenfield January 28, 2011
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Week 4: Assignment #2 2 Week 4: Assignment #2 ─ Research Methodologies and the Use of Accounting Information Compare and Contrast the Deductive, Inductive and Pragmatic Research Methods While the deductive, inductive and pragmatic research methods all can be used to develop theories of accounting, these three methods still have differences as the following. Different Rationale Deductive method. In accounting, the deductive method begins with the basic accounting premises and proceeds to derive by logical means the accounting principles that serve as guides and bases for the development of accounting techniques (Porwal, 2007). This method is usually described as “going from the general to the specific” (Schroeder, Clark, & Cathey, 2011). The steps used to derive the deductive method in accounting will include the following: (a) specifying the objective of financial statements, (b) selecting the postulates of accounting ─the basic accounting premises, (c) deriving the principles of accounting, and (d) developing the techniques of accounting. Thus, the sequence is – objectives, postulates, principles and techniques. The objectives of accounting should be properly formulated. The entire structure of accounting theory is based upon objectives. However, its conclusion follows logically from premises. If premises are false, conclusion may also be false. Inductive method. The inductive method in accounting begins with observations and measurements and moves toward generalized conclusions.This method is described as “going from the specific to the general” because the researcher generalizes about the universe on the basis of a limited number of observations (Schroeder, Clark, & Cathey, 2011). This method to develop a theory involves the following four stages: (a) recording all observations, (b) analysis and classification of these observations to detect recurring relationships, (c) inductive derivation
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Week 4: Assignment #2 3 of generalizations and principles of accounting from those observations that depict recurring relationships, and (d) testing the generalizations (Porwal, 2007). In induction, the truth of the propositions depends on the observation of sufficient instances of recurring relationships. That is, the truth or falsity of the propositions must be empirically tested, which needs the observation of a sufficient number of instances of recurring relationships. Pragmatic method. The pragmatic method is characterized by its conformity to real world practices and is based on the concept of utility (Schroeder, Clark, & Cathey, 2011). Once a problem has been identified, the researcher attempts to find a solution that will resolve the problem. In this method, accounting techniques and principles are chosen because they are useful
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ACC563 Assignment 2 - Week 4: Assignment #2 Week 4:...

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