Abstract

Timo Salmi

The Finnish Journal of Business Economics 1/1986, 71-87.

Summary of the inaugural lecture originally given in Finnish

[To the fulltext paper ]

This paper contains two parts. In the first half I discuss the methodological nature of economic and business disciplines and their interaction with related fields. The disciplines are classified in relation to accounting and (business) finance along two dimension is Figure 1.

In the second half I present and discuss the structure of quantitative research in accounting and business finance. The research process in Figure 2 has its roots in the positivist tradition of natural sciences.

In the discussion on the research process I point out the special dual nature of accounting. It provides background theories for research in its role of a discipline. At the same time accounting provides data for empirical research in its role of an information producing process.

On the basis of the discussion I classify accounting research into three categories

• Research taking its background and theories from accounting and/or finance. The empirical data is gathered from publicly available financial statements and/or stock-exchange statistics. This research is mostly positive in nature.
• Research on internal accounting in business firms (management accounting) and developing internal accounting for decision making purposes. This kind of research is most of descriptive or normative in nature.
• Research on accounting principles, and developing methods of producing accounting data. This kind of research is most often philosophic and reflective in nature.

Figure 1.  Economic disciplines in
           connection with related fields


<--- quantitative              verbal --->
     deductive                 philosophic

S u b s t a n c e

          Economics
          micro-economics

                 Business-economics:
                 accounting
             finance
                   marketing
                          organizational behavior

                               General social
                               sciences
                                  Humanities
S u p p o r t

Mathematics                    Business Law
   Applied mathematics           Applied sociology
      Economic mathematics          Sociology
        Operations research

  Statistics
      Business statistics
                               Special languages

T e c h n i q u e s
                 Electronic data processing


Figure 2. Quantitative research process
          in accounting and finance

+----------------------+      +----------------------+
|   Research problem   | <--- |  S u b s t a n c e   |
+----------------------+      |----------------------|
           !                  | Business economics:  |
           !                  |    accounting        |
+----------------------+      |----------------------|
|    T h e o r y       |      |    financing         |
|  previous knowledge  |      |----------------------|
+----------------------+      | Economics:           |
           !                  | micro-economics      |
           !                  +----------------------+
+----------------------+
|      M o d e l       |      +----------------------+
|----------------------|      |    S u p p o r t     |
|     Theoretical      |      |----------------------|
|----------------------| <--- | Business statistics  |
|     Statistical      |   +- | Economic mathematics |
+----------------------+   !  | /operations research |
           !               !  +----------------------+
+----------------------+   !
| E m p i r i c i s m  |   !  +----------------------+
|----------------------|   !  |    Observations      |
|   Parameter esti-    | <-+  |----------------------|
|   mation / testing   |      |       data:          |
|   hypotheses         | <--- |     accounting       |
+----------------------+      |----------------------|
           !                  |     processing       |
+----------------------+      |       EDP            |
|   Implications       |      +----------------------+
|----------------------|
| Enhanced knowledge:  |
| Corroboration or     |
| refutation of theory |
|----------------------|
| To decision making   |
| if normative         |
+----------------------+