Question

Case 1

Various research methodologies are available with which to study the development of accounting theory.

Required:

Discuss the deductive, inductive, and pragmatic research methods. Include in your discussion examples of accounting research that used each method.

Case 2

Agency theory provides an explanation for the development of accounting theory.

Required:

Discuss agency theory, including its basic assumptions, agency relationships, why the political process affects agency relationships, and why it does or does not explain accounting theory.

Answer 1

case 1:

inductive approach

Inductive approach begins with specific observations and the conclusions are generalized. In inductive approach, after selecting a number of observations correctly, one can generalize the conclusion to all or groups of similar conditions and situations. These generalizations need to be tested, some of which might be verified and some rejected. Accordingly, all of the principles which are derived based on inductive reasoning are theoretically falsifiable. In the induction process, the researcher as an observer, should honestly, without any prejudgments and biases, and with an impartial mind, register what they observe.

deductive approach

The deductive approach constitutes developing of an assumption based on the existing theories and forming a research plan to test the assumption. The deductive approach can be explained using the assumption driven from theory. In other words, the deductive approach includes deducing the results from the premises. When a deductive method is applied for a research project, the author formulates a set of hypotheses that need to be tested and next, using a relevant methodology, tests the hypothesis.

pragmatic approach

the pragmatic approach involves using the method which appears best suited to the research problem.Pragmatic research therefore give themselves the freedom to use any of the methods, techniques associated with qualitative or quantitative research.

case 2: