Journal article
Experimental methods in accounting: A discussion of recurring issues
Contemporary accounting research, Vol.6(2), pp.825-849
03/1990
DOI: 10.1111/j.1911-3846.1990.tb00789.x
Abstract
“What economic problems do existing accounting institutions solve?” Experimental economics helps to answer this question. It can be applied to issues in disclosure and auditing, regulation and taxation, and the internal organization of the firm. One can experimentally examine questions such as “Why do firms disclose?” “Why is there a regular issuance of financial statements by firms?”, “Why do managers make forecasts?” “What is the role of regulation in accounting?” “What effects do various tax policies have on the demand for depreciable risky assets?” “What is the role of information in the organization of the firm?” “What costs and benefits are associated with decentralization?”
Experimental economics builds the interplay between theory and data, which is necessary for a discipline to become legitimate science. Theory is the guidepost in attempting to construct imaginative examinations of phenomena, and the results of the tests become a basis for revising theory. Experimental economics is a powerful tool for extending understanding of accounting phenomena.
Using this tool is not without its limitations. Most experiments make precise choice predictions even though the tastes and beliefs of experimental subjects are at most partially known. Because the phenomena of interest are often quite complex, there are usually several maintained hypotheses. As the complexity of these settings increases, there is also increasing need for statistical contributions.
This paper is intended to aid in the development of experimental economics as a research tool in accounting by assisting both those interested in conducting experiments and those interested in assimilating experiments to evaluate experimental work critically.
Details
- Title: Subtitle
- Experimental methods in accounting: A discussion of recurring issues
- Creators
- Joyce Berg - Washington UniversityDon Coursey - Washington UniversityJohn Dickhaut - University of Minnesota
- Resource Type
- Journal article
- Publication Details
- Contemporary accounting research, Vol.6(2), pp.825-849
- DOI
- 10.1111/j.1911-3846.1990.tb00789.x
- ISSN
- 0823-9150
- eISSN
- 1911-3846
- Publisher
- Blackwell Publishing Ltd
- Number of pages
- 25
- Language
- English
- Date published
- 03/1990
- Academic Unit
- Accounting
- Record Identifier
- 9984962553302771
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