The role for empirical research in management accounting

Abstract

The dominant research methods in management accounting are a priori reasoning, deductive analysis from well-specified models, and controlled laboratory experiments. None of these methods puts researchers in the field attempting to understand how accounting information is developed or used in actual organizations. As a consequence, the vast majority of management accounting research papers are neither informed by data nor tested on data. A review of the literature on the process of scientific inquiry reveals that observation and description must be the starting points for scientific research. Observations are the building blocks for subsequent scientific activities, such as classification, measurement and theory building. Observations are also necessary for testing the generalizability and limits of any theory. Cost accounting and management control procedures function in complex organizational settings. Any empirical research method would need to capture this complexity. Field research methods, including case studies, field studies and field experiments or process tracing studies, provide an opportunity to study management accounting systems in their organizational context. Initially, case studies can provide the basis for a taxonomy of cost accounting and management control practices. Subsequently, field studies and process-tracing studies can lead to a more informed basis for modeling, theory-building, and hypothesis-formation activities, activities that today occur in the absence of data and observations. Finally, these empirical studies can be used to test the validity and limits of our theories. In a theory testing mode, empirical studies can not only test predictions on the existence of certain practices but also to confirm “how” and “why” these practices, or have not, been implemented. Therefore, empirical research methods provide a rich, but virtually untapped, research method for the study of management accounting phenomena.