Methodology in Financial Accounting Theory

Metaphysics, methodology and theory in classical accounting thought

“…In a section devoted to “the rejection of grand [that is, golden age] theories”, he reports one critic as providing “a denunciation of grand theory, suggesting that theories of accounting could not be assessed independently of their own assumptions” (p. 103, emphasis in original). Consistent with the view of its fate offered by these surveys, Van Mourik’s (2014b) discussion of methodology in financial accounting theory largely ignores classical accounting thought, mentioning a few studies very briefly but offering as the goals of theory (p. 45) only those of post-classical streams and reporting “methodological debates” only from “the social sciences” (p. 40).…”

“…A newcomer to accounting scholarship seeking advice on the relationship between theory, methodology and philosophy might consult Van Mourik’s (2014b) recent guidance, which explains that:…”

“…The areas of philosophy alluded to here are, of course, ontology and epistemology; a little later, Van Mourik (2014b, p. 40) further emphasizes “the importance of the ontological and epistemological assumptions for the formulation of theories”. A similar approach is to be found in, for example, Riahi-Belkaoui (2004, Sections 9.2 and 9.5) and Ryan et al (2002, Chapter 1).…”

“…But, in the words of the recent guide to philosophy in accounting quoted earlier, under a positivist epistemology, the task of researchers is to “seek to discover empirical regularities in order to explain and predict phenomena” (Van Mourik, 2014b, p. 38) and by this standard, as Nelson (1973, p. 4) famously pointed out, while awarding them their title, the golden-age theorists simply failed in their aspiration to be scientific. His attack describes “a golden age in the history of a priori research in accounting”, by which he means “the statement of hypotheses on how accounting should be done, without the testing of these hypotheses” (see also Gonedes and Dopuch, 1974).…”

“…I nonetheless want to argue that classical accounting thought provides accounting practice with a firm and tested connection to its empirical domain. I also want to argue that there is a stable and coherent structure to classical accounting theorising, one that applies across the field (though not, of course, to every single theorist) and that qualifies as a methodology in the proper sense of the term, that is as a “logic of scientific procedure” (Merton, 1967, p. 140, quoted by Van Mourik, 2014b, p. 36) or “the procedures to be used in the generation and/or in the testing of propositions by those wishing to obtain valid knowledge” (Gaffikin, 1988, p. 31). This structure provides the framework for the construction of individual theories, but because theories function in practice by the way in which they fit into models, the structure is also reflected in these models.…”