Bundled Forecasts In Empirical Accounting Research Essay


Discuss about the Bundled Forecasts in Empirical Accounting Research.



The given assignment reflects about the article “Half a Defence of Positive Accounting Research” by Paul V Dunmore. The article reflects different aspects of positive accounting from a wide range approach instead of normal approach of “profit after tax” in financial statements. Several forms of complexity lie in the normal approach, which are in terms of over-dependence in hypothesis testing or giving no attention to the respective numerical parameters.

In addition to this, it can be inferred that there are different forms of advantages and disadvantages of positive accounting theory as well. These are in the form of different assumptions of epistemology and ontology. The given assignment will throw light on the positive accounting theory described in the article. In addition to this, it will also reflect upon the significance of the given theoretical framework along with the given demerits of the selected article. Based on the significance and demerits of the article, appropriate conclusion of the article will be drawn.

The article reflects about positive accounting theory approach which is associated to the world of accounting. Positive approach in accounting can be associated to scientific research approach in a broader manner (Gaffikin and Aitken 2014). Along with this, it can be further inferred that it reflects about the cause and affect relationships in an intellectual manner. It can be also inferred that the concept of positive accounting is yet to be utilized in the broader context of accounting. The characteristics of the theory can be explained from different articles of past authors who have studied in the field of auditing. With the help of these articles, it can be also inferred that the concept of positive accounting can be easily fitted in case of scientific approach. On the other hand, it can be further inferred that there is a direct correlation between positive accounting theory and normal science. In addition to this, theoretical induction cannot be considered as the tool to measure the accuracy of the accounting theory. The given article “Half a Defence of Positive Accounting Research” reflects about the four different classes of the relative theory. The author of the article has inferred that observations cannot help in case of any specific accounting theory. Due to this reason, a range of theories can be ascertained with the help of observations. This has been further described with the criteria given by Popper.

The article has presented the broader sense of positive accounting considering a research program. This aims to develop accounting settings of human behaviour concentrating mainly on casual explanations and PAT existence in accounting. Popper’s falsification criterion has been found to be a weaker method of statistical hypothesis testing. The positivist research program has been found to be extremely powerful, however, while implementing it, several deficiencies have been found. Therefore it can be said that the practical implementation of such research program is not useful. Some of the common problems that have been identified while practical implementations are the casual construction of theoretical model, inappropriate hypothesis testing, parameters’ numerical value having the lack of interest, warrant confidence having insufficient replication and finally theories explaining only qualitative data but not data testing. Through positive research approach, it has been found that scientific objectives were not achieved. Ultimately, the ‘normal’ science description by Kuhn is found to fit positive accounting research through Kuhnian crisis and revolution.

In addition to this, it can be further deduced that Popper has given different views in terms of logic behind statistical hypothesis. On the other hand, weakness of the same has also been reflected. A proper reason has also been justified for the same case as it has been seen that around 5 percent of the tests can be said to be rejected at 5% level of significance. In addition to this, the current article also reflects different concepts of ontology and epistemology with relation of hypothesis testing (Guthrie and Parker 2016). The article evaluates the aspects of positive accounting theory in relation to qualitative aspects of accounting. The given article also evaluates the importance of arriving into some kind of conclusion in case of carrying a quantitative research related to positive accounting theory. There is an extreme need for advanced theoretical models, which will reduce the vulnerability of the given variable of the research (Henderson et al. 2015).

Several research questions are framed in the given research article. These are as follows:-

  • To investigate whether positive research programme can be taken as an alternative to positive accounting theory
  • To analyse whether positive research programme is fruitful in case of scientific analysis
  • To critically evaluate different aspects ontology and its impact in the positive accounting research program.

However, there are several research hypotheses that can be framed from the given study. These are as follows:-

H0: There exists a universe and the existence is beyond the level of imagination of individuals

H1: Every events in this universe is because of a reason and these reasons form the universe

H2: Every happening in the universe could be observed and this is through vigilance in the observation

H3: the basic urge in to analyze the universal observation that is the root of understanding the universe especially causation

To analyze the first hypothesis there are different means of positive research that has been looked forward. It is noticed through different studies that the procedure of rational self interest amongst different groups for interaction is implied through different theories of accounting. This emphasizes on express contracts.

In order to test the second hypothesis the learner had to understand different perspectives of ontology an epistemology. This sheds light on the fact that the research conducted on positive research is not the same as accounting research. In this context, it was stated by () that most of the events have random occurrence in universe or maybe due to the result of intervention.

In the third hypothesis, the researcher or the learner would validate the research through hypothesis testing and falsification. Careful observation is the prime need as per the theories that would be helpful in dealing preliminary ideas of the research. As per () the formal theory that can be formulated would help in getting consistent performance on testable participants. This would serve as the empirical evidence for the research. The anticipations of the new theory would be checked along with the new observations. In such situation, it is important to consider the old theories and the new theories. The above steps and the theories are to be analyzed to come to a conclusion. This would enrich the findings of the research.

In order to test the final hypothesis it important to note that all the models is to be accurately and precisely tested. This should be in terms of the specific focus on the measurement. In this aspect, it was stated by Deegan (2016), it is justified that mapping the casual occurrence in the universe is pivotal. Hence, the formulation of the hypothesis would be further tested with the help of the literature review.

Positive research as found in accounting

In various kinds of companies or organizations balance self respect amount different groups is the outcome of any accounting phenomena. The accounting choices of the managers, pricing decisions and the reporting are covered on the part of the auditors. In this regard Dyckman and Zeff (2015) opine that it is necessary to know the right decision in terms of investment. Information relayed to investment determines most of the activities of the managers. The risk of positive theory of accounting is lowered with the help of the rational behavior of the individuals.

After going through all the facts and the decisions, it is decided that judgments in terms of performance evaluations and discretion play pivotal role. It is seen that the positive research and the associated program is wider with respect to the positive accounting theory. Scientific research in accounting is the final call that helps in gaining the right idea and insight to fruitfully analyze different causes (Gaffikin and Aitken 2014).

Importance of an effective positive accounting research programme

There is a need of an effective positive accounting research programme. This is mainly because, in case of different forms of vulnerable variables, more stringed hypothesis testing is required. In addition to this, it can be also inferred that formation of theoretical models requires different forms of analytical tools of modelling (Guthrie and Parker 2016).

Needles, Powers and Crosson (2013) opine that the field of epistemology is based on scientific terms which are mainly aimed to explore different approaches related to the research. On the contrary, the concept of ontology reflects the activities of the given variables in accordance to the given question. Both these concepts are related to the positive accounting theory. The main problem of positive accounting theory is that there are several problems associated in case of exploring new form of experiences. Agency can be considered as another major problem in case of application of such theories in the field of accounting.

Significance and Limitations of the article

The given article provides deep insights of positive accounting theory from a wider point of view with respect to causal relations of human contact. It also throws light on different intellectual forms under scientific approach of accounting. In addition to this, it helps to establish cause and effect relationship in relation to human interactions in accounting. This can be further evaluated by providing a rational insight of scientific research methods. In addition to this, the article throws light upon the various merits of a positive accounting theory programme.

The participating accounting groups have further validated this. On the contrary, it can be further inferred that the given article has failed considerably to create a human awareness and participation with respect to accounting. There is no evidence of human data collection in the given article. In addition to this, there is no evidence of primary and secondary data in the article. There is a need of effective theoretical models which are more reliable in nature in terms of positive accounting theory. In addition to this, the article is based on inferences of past authors which are qualitative in nature. Due to lack of quantitative data, the feasibility of the article can be questioned. Another de-merit of the given article is that it is written in reflective format. This further interprets that the author has given his viewpoint based upon qualitative and secondary approach and ignored primary and quantitative data. However, the given article can be considered as significant in terms of importance of positive accounting theory.


It can be concluded that positive accounting theory has several merits and demerits presented in the given article. Positive accounting research programme has a wide range of importance with relation to scientific accounting theory. In addition to this, the given research article provides a deep insight of epistemology of positive research accounting theory in terms of diverse accounting practice. On the other hand, it is reflected that positive accounting research programme needs to focus on properly framed research hypothesis in order to avoid repetition in case of statistical analysis of a specific sample. It is also important to draw a conclusion from a particular hypothesis in order to get an accurate data according to the opinion of positive accounting theory.


Deegan, C., 2016. Twenty five years of social and environmental accounting research within Critical Perspectives of Accounting: Hits, misses and ways forward. Critical Perspectives on Accounting.

Dyckman, T. R., and Zeff, S. A., 2015. Accounting Research: Past, Present, and Future. Abacus, 51(4), pp.511-524.

Gaffikin, M., and Aitken, M., 2014. The Development of Accounting Theory (RLE Accounting): Significant Contributors to Accounting Thought in the 20th Century. Routledge.

Guthrie, J., and Parker, L. D., 2016. Whither the accounting profession, accountants and accounting researchers? Commentary and projections. Accounting, Auditing & Accountability Journal, 29(1), pp.2-10.

Henderson, S., Peirson, G., Herbohn, K., and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.

Jones, S. (Ed.)., 2015. The routledge companion to financial accounting theory. Routledge.

Jones, S., and Aiken, M., 2015. Evolution of early practice descriptive theory in accounting. The Routledge Companion to Financial Accounting Theory, p.91.

Miller, P. and Power, M., 2013. Accounting, organizing, and economizing: Connecting accounting research and organization theory. Academy of Management Annals, 7(1), pp.557-605.

Modell, S., 2015. Theoretical triangulation and pluralism in accounting research: a critical realist critique. Accounting, Auditing & Accountability Journal, 28(7), pp.1138-1150.

Needles, B.E., Powers, M. and Crosson, S.V., 2013. Principles of accounting. Cengage Learning.

Rogers, J.L. and Van Buskirk, A., 2013. Bundled forecasts in empirical accounting research. Journal of Accounting and Economics, 55(1), pp.43-65.

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