Commentary and Projections Auditing Accountability

Question: Discuss about the Commentary and Projections Auditing Accountability. Answer: Introduction: The current assignment aims to provide an in-depth evaluation of the provided article, Half a Defence of Positive Accounting Research. The article focuses on positive accounting in the wider sense of a research program that intends to form causal descriptions of human behaviour in the accounting framework rather than profit after tax in accounting. In addition, the wide positivist research program has a number of deficiencies in practice. The most inherent complexities constitute of casual development of speculative models to be weathered, excessive dependence on the testing of hypotheses and lack of attention on the numerical values of the parameters. In order to evaluate the merits and demerits of positive accounting research, the researcher has evaluated the broader intellectual project with the assumptions of ontology and epistemology. In this context, Apostolou et al. (2016) remarked that critical review of positive accounting would review several loopholes, which restrict the same to make meaningful contributions to the broader research project. The assignment, thus, aims to provide a brief overview of the provided article. Moreover, the study would focus on identifying the research hypothesis along with description of its value and the method through which it has flowed from the literature review. Finally, the theoretical framework coupled with the significance and drawbacks of the article have been briefly illustrated. Summary of the article: The researcher, in the article, has attempted to investigate the positive approach associated with accounting research. As commented by Ballwieser et al. (2012), the accounting research of positive approach is linked with the broader intellectual project of scientific research, which aims to analyse the cause-effect relationships. The deficiencies in the positive accounting research have been demonstrated by selecting certain illustrative papers, which mainly include the papers from the auditing literature. It has been found that positive research is currently utilised in accounting; however, it has certain loopholes in accomplishing the scientific goal after choosing the illustrative papers to fit the purpose of this research. In addition, the description of Kuhn related to normal science suits with the positive research of accounting as well. The prospects are briefly elaborated for a Kuhnian revolution and crisis, which might accomplish positive accounting to accomplish its potent ial (Jones and Aiken 2015). The researcher has described Poppers criterion to prove that induction is not sufficient to measure the accuracy of any particular theory. In addition, the article has provided a brief review of the falsification of positive accounting theories. In order to describe the same, four classes of descriptions have been laid forward, which include error measurements, internal effects, external effects and the inefficiency of the relativity theory. Therefore, the researcher has inferred that a specific theory could not be anecdotal by observations; however, it could choose between two or more theories. In other words, the decisive observations falsify inaccurate theories; however, it is inherent only in case of support of a opposing theory. Along with this, the article has provided an in-depth dissection of the weaknesses and logic associated with the statistical hypothesis testing. However, it has been found that it has been a very dilute version of the logic of Popper. This is because every single test out of 20 could be wrongly rejected at the 5% level of significance. Moreover, the technical issue associated with hypothesis testing is the test statistic distribution falling under null hypothesis, which relies mainly on the supplementary assumptions. Furthermore, even if the technical issue could be resolved, there is high probability that hypothesis testing would fail. This is inherent when only a single alternate hypothesis is taken into account without adequate and careful specification. This is because it might be consistent with different accounting theories, which would provide different strength of association. Hence, the researcher has realised the ardent need to develop a better measurement procedure to unde rgo rigorous testing of the theoretical models prevalent in accounting. Research question/ hypothesis: The following research hypotheses have been set to examine the validity of positive accounting research: H0: There is existence of a universe, which is beyond the imagination level of an individual H1: The events in the world have reasons, which form a part of the universe themselves H2: The normal individuals could obtain highly reliable information about the global events with the help of vigilant observation H3: The intention of the intellectual property is to utilise observations for gaining a global understanding of the universe, especially causation In order to test the first hypothesis, various instances of positive research in accounting have been put forward. According to Bedford and Ziegler (2016), the operation of rational self-interest among parties interacted with implied or express contracts have resulted in theorising the phenomena of accounting. For testing the second hypothesis, the researcher has discussed scientific epistemology and ontology, which illustrates that the research of positive accounting is not identical as accounting research. In this context, Bromwich and Scapens (2016) advocated that events do not occur as random or the output of intervention from outside the universe. In order to assess the third hypothesis, the researcher has discussed falsification and hypothesis testing to determine its validity. Therefore, according to the provided theory, careful observation is required through which preliminary ideas could be developed. Accordingly, a formal theory could be developed with testable anticipations, which is consistent with the existing relevant and dependable empirical evidence (Chatfield and Vangermeersch 2014).After that, the anticipations of the new theory could be tested in contrast to new observations in circumstances, in which the old and new theories make various anticipations. Therefore, the above two steps need to be repeated. For testing the final hypothesis, the different models are tested with specific focus on measurement. In this context, Colasse and Durand (2014) stated that mental models could be used to map the causal procedures occurring in the universe. Therefore, the researcher has framed the hypotheses, which are adequately flowed in the section of literature review. Theoretical framework: The following theoretical frameworks have been used in the article to meet the objectives of the research: Instances of positive research in accounting: The operation of balanced self-interest among parties is the outcome of the accounting phenomena through implied or express contracts in various kinds of organisations. These cover the accounting choices on the part of the organisational managers, reporting and pricing decisions on the part of the auditors, the decisions of the regulators in terms of standard setting and the professional advices of academics. As stated by Crawford and Lepine (2013), it is necessary to determine the type of information, which the investor uses to make investment decisions. This deduces that the behaviour of the human beings is rational; however, not in the kind of games that happen from the theory of positive accounting (Smith 2014). In addition, after investigation of several accounting researches, the accounting settings have been evaluated in the absence of coherent behaviour, like the method through which audit professionals make judgements and the ways in which managers utilise discretion in the systems of performance evaluation. Therefore, these instances serve to demonstrate that the program of positive research is much wider compared to positive accounting theory (Deegan 2016). Therefore, any specific research that intends to gain an insight of the nature and causes of the accounting phenomena follows the scientific research of accounting. Scientific epistemology and ontology: In the words of Dyckman and Zeff (2015), epistemology is a scientific field, which aims to explain the different approaches available to gain an understanding of the world. Ontology, on the other hand, seeks to explain the activities and their association to answer the question. Firstly, the human agency and the socially developed nature of roles, associations and practices depict that the social earth does not have an objective subsistence devoid of the human beings, participants and the activities need not possess any rational reasons (Uno and Bartelmus 2013). In addition, the earth could not be observed devoid of the experiences of human beings and explanations of the participants (Gaffikin and Aitken 2014).Hence, because of such ontological and epistemological complexities, the agenda to gain an understanding of the reasons of accounting phenomena is like a futile exercise of flogging a dead horse. Therefore, the problem associated with the positive research is the exploration of experience and meaning, as it intends to explore reasons. The various research streams with diverse range of objectives could exist at the same time. Another major issue is related to that of agency. This is because if the human beings possess own will, their actions might result in causes that are not acquiescent to scientific study (Guthrie and Parker 2016). Henceforth, it is possible to describe the general behavioural trends; however, some accountants and auditors might tend to behave in a different manner. Thus, the behavioural causes would not be identified in the objective world; however, in a different place. Needs of an effective positive research program: From the provided article, it has been identified that stringent testing of the vulnerable models is needed for careful evaluation of the variable measurements. Along with this, the analytical modelling is necessary for testing and formation of the theoretical models. In order to implement analytical modelling in the positive accounting research program, the field pre-occupation is required to swing from tractability to plausibility (Henderson et al. 2015). The researcher has suggested that greater focus on measurement is required, instead of testing only. This is because in accounting, a bias related to strong publication is inherent against dimension, excluding when the same is linked with a theory. This is because the shortage of resources in accounting is inherent due to the lack of availability of adequate resources (Jones 2015). Significance and limitations of the article: After evaluation of the provided article, it has been found that the research has portrayed a broad gap between the current practices of positive accounting and the needs to make relevant contributions to the broader intellectual program. In case, there is absence of system optimisation, it is necessary to modify the same for rectifying the mistake. In addition, the article provides a rational insight of the scientific research, which is validated by the participating accounting groups. With the help of this research, it has been identified that there is need for better theoretical models, which are more reliable in nature. In addition, the article has proven that positive accounting research is a ramification of quantitative models, which are minimised to statements of the projected trend between two variables. However, the major limitation identified out from the article that this research would not contribute awareness of human behaviour in the context of accounting. This is because it lacks collection of real life data from various sources. This specific limitation has been acknowledged in the article. However, the lack of collection of secondary and primary data has hindered the quality of the research. In addition, the researcher has made inferences based on the statements of various authors regarding positive research accounting. Finally, the quantitative aspects are not provided adequate importance, which is crucial in the current era to estimate the future growth of the organisations in the long-run. Conclusions: The above assignment has aimed to evaluate the epistemology and ontology of positive accounting research to ascertain its loopholes and the methods through which such loopholes could be overcome. The researcher has recommended that certain theoretical models need to be formulated, for detailed testing of the accounting variables. Secondly, there is an increasing need for a better measurement tool to undergo rigorous testing of the theoretical models. In order to achieve the same, the concepts need to be operationalised through findings of proxies to present reliable associations. It has been determined that the behaviour of the human beings is rational; however, not in the kind of games that happen from the theory of positive accounting. However, the quantitative aspects of accounting need to be prioritised to predict the future performance of the organisations. Therefore, it could be inferred that slight modifications in positive accounting program is required to minimise the organi sational errors in terms of accounting. References: Apostolou, B., Dorminey, J. W., Hassell, J. M., and Rebele, J. E., 2016. Accounting education literature review (2015).Journal of Accounting Education,35, pp.20-55. Ballwieser, W., Bamberg, G., Beckmann, M. J., Bester, H., Blickle, M., Ewert, R., and Gaynor, M., 2012.Agency theory, information, and incentives. Springer Science Business Media. Bedford, N. M., and Ziegler, R. E., 2016. The contributions of AC Littleton to accounting thought and practice.Memorial Articles for 20th Century American Accounting Leaders,49, p.219. 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