Chapter IV: Basic Accountancy Research - Operationalization Process

Learning Sequence/Input

Chapter IV: Basic Accountancy Research - Operationalization Process

Topic Outline

1. Linking Conceptualization with operationalization

2. Developing the Framework

3. Research Design

4. Research Variables

5. Research Hypothesis

6. Measurement of Data

7. Research Proposal

After reading this chapter, the students should be able to:

1. Relate the operationalization process with the conceptualization process;

2. Construct an operational framework for a specific research endeavor;
3. Develop operational definition of terms based on a given operational framework,
4. Illustrate the different types of research design;
5. Differentiate the types of variables and analyze their relationships;
6. Formulate a research hypothesis in relation to the operational framework; and
7. Apply the measurement procedures for specific type of data and in relation to the
operational framework.

Basic Accountancy Research - Operationalization Process

• Operationalization is the process of defining a fuzzy concept and making it clearly

distinguishable or measurable.
✓ Technically, it is the process of transforming an abstract concept or theory into an
empirical, testable subject of research.
✓ Proper operationalization is crucial in improving the robustness of research design and
obtaining relevant results.
✓ Bad operationalization can introduce the researcher's preconceptions or biases into the
data or generate responses that do not adequately respond to the research question or
test the theory in question.

Linking Conceptualization with Operationalization

• The conceptualization process ends with the preparation of a conceptual framework that is
obtained from the theoretical framework.
• The review of related literature, on the other hand, is the basis of the theoretical framework.

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Chapter IV: Basic Accountancy Research - Operationalization Process

• The operationalization process takes off from conceptual framework. (The activities in the
operationalization process are shown in Figure 1.)
✓ In this process, the primary task is the preparation of the operational framework.
✓ The process extends up to the point when the researcher is ready to go on fieldwork
to gather data.
✓ Once the operational framework is done, the researcher can develop the research
design which serves as the basis of identifying the methods of measurement and
data-gathering.
✓ After the research design, the variables and the corresponding indicators are
identified and defined operationally, the data-gathering methods are determined,
and the research instruments are prepared.
✓ Finally, sampling plan is developed.

Developing the
Operational Framework Research Design
• Why – Purpose of Study
Research Variables and • Who – Unit of Analysis
Indicators • What – Point of Focus
• When – Time Dimension
•Identification
• Definition
• Measurement

Data Collection

• Data Gathering
Methods
• Instruments
• Sampling Plan

Figure 1. Activities in the Operationalization Process

Developing the Operational Framework

• The operational framework shows what will be performed in the research.

• This is usually shown in the research together with a diagram.
• Elements commonly presented in the operational framework
1. the variables of the study
2. areas covered in the study
3. phases or major stages to be undertaken

o In presenting the variables of the study, the operational framework usually shows the
variables that establish association or relationship such as cause and effect
relationship:
➢ independent variable is the cause. Its value is independent of the other
variables in the study.

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➢ dependent variable is the effect. Its value depends on changes in the

independent variable.
➢ Aside from the independent and dependent variables, a more complex
framework also captures the intervening, moderating, and controlling
variables.
✓ An intervening variable (also called mediator variable) is a
hypothetical variable used to explain causal links between
other variables. It explains how or why there is a relation between
two variables.
✓ A moderator is a variable that affects the strength of the relation
between the predictor and criterion variable. Moderators specify
when a relation will hold.
✓ Controlling variables is an important part of experimental design.
Controlled variables refer to variables or contributing factors that are
fixed or eliminated in order to clearly identify the relationship
between an independent variable and a dependent variable.

• The operational framework may also be a schematic presentation of the areas covered in
the study. It may also show the phases or major stages to be undertaken in the research.

Illustration: The Institutionalization of Small and Medium Enterprises

o The study and examines whether certain internal organizational factors (independent
variables) have relationship with the state of institutionality (dependent variables) of
small and medium enterprises (Figure 2).

Operational Framework in the Institutionalization

of Small and Medium Enterprises

INDEPENDENT VARIABLE DEPENDENT VARIABLE

State of SMEs as Organization State of SMEs as Institution

Internal Variables
Institutionality
• Leadership style
• Production policies • Technical competence
• Market access • Normative
• Human resources commitment
• Financial Resources • Innovative thrust
• Environmental image
• Spread effects of
External Variables
activities
• Enabling linkage • Autonomy
• Functional linkage • Influence
• Normative linkage • Public acceptance
• Diffuse linkage

Figure 2. Operational Framework Showing the Variables of the Study

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o The internal organizational variables include leadership style, production policies,

market access, technology, human resource, and financial resources.
o On the other hand, the dependent variables include the factors that determine the
state of institutionality such as technical competence, normative commitment,
innovative thrust, environmental image, spread effects of activities, autonomy,
influence, and public acceptance.

• An operational framework detailing the areas of study is shown in Figure 3. The study
focuses on three major areas concerning financial management as a system of good
governance. These areas are the system components, performance measurement, and
overarching goals.

Operational Framework in Analyzing Financial

Management as a System of Good Governance
E
X
PERFORMANCE OVERACHING
T SYSTEM
E MEASUREMEMT GOALS
R
N FINANCIAL
A MANAGEMENT AREAS FINANCIAL
L PERFORMANCE
• Treasury GOOD
E • Liquidity GOVERNANCE
• Accounting
N • Activity
• Budgeting • Transparency
V • Cost Efficiency
• Accountability
I
• Allied Areas (Other • Profitability
R • Predictability
Finance-Related • Leverage
O • Participation
Areas) • Stability
N
M
E
N
T

Figure 3. Operational Framework Showing the Areas of the Study

• The operational framework showcasing the phases of the study is shown in Figure 4. The
study entails four phases: conducting an inventory of organizations or institutions,
interpreting the data gathered from the inventory, selection of the units of further studies,
and analysis of the unit of study.

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Operational Framework for Institutional Mapping of Support System to

Financial Planning and Management

Phase 1 Phase 2 Phase 3 Phase 4

Inventory of Interpretation Selection of Analysis of

Organizations/ of Data Local LGUs
Institutions Government
• Roles and Units (LGUs) • Financial
• Internation relevance of managemen
al financial organizatio • Selection t processes
institutions ns criteria • Involvemen
• Non- • Difficulties • Selection t and
government and process participatio
organizatio constraints n
ns • Facilitating • Authorizati
• Academic factors on
institutions • Gaps and procedures
• Governmen overlaps • Leadership
t Partners

Figure 4. Operational Framework Showing the Phases of the Study

Operational Definition of Terms

• The operational definition of terms complements the operational framework through the
meaning of the variables, areas, phases or processes presented therein.
• Definition is one avenue that reduces the danger of confusion due to different meanings
that the readers may attribute to the concepts presented by the researcher.
• It gives meaning to a variable by spelling out what the researcher must do to measure it.
Example: Information seeking may be defined in terms of the
✓ number of hours spent listening to political radio programs;
✓ extent of reading a particular news story;
✓ number of media that a person exposes himself daily; or
✓ types of news stories to which the person would be exposed.

• Operational definition specifies:

a. The characteristics to be studied
b. the manner by which they are to be observed
c. the concrete terms of operations by which the observations are to be categorized.

✓ It must have empirical referents: one must be able to count, measure, or gather
the information through the senses.

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❖ One common mistake among researchers is the use of the nominal definition of
terms.
✓ This definition describes the meaning of the concept by using other concepts. It
specifies the observational strategy but it does not allow the process of
observation.

• To make the definition operational, the researcher must specify exactly:

o what he/she is going to observe,
o how he/she will do it, and
o what interpretations he/she is going to place on various possible observations.

✓ For example, socio-economic status is operationally defined as total family income

during the past 12 months and the highest level of school completed.
✓ When the data are processed, the researcher can include a system of categorizing the
answers, such as under P5,000; P5,001 to P10,000; and so on; and elementary, high
school, college or graduate school.

Research Design

• Research design is a scheme prepared to identify the different conditions necessary for the
measurement, collection, and analysis of data. It helps in determining the research
method(s) to be used.
• The research design is different from the research method, which refers to the data-
gathering techniques.
• A research design is not just a work plan that details what has to be done to complete the
study. The work plan, specifically with respect to the data collection and analysis will flow
from the research design.
• The research design should ensure that the evidence obtained will enable the researcher
to answer the research question unambiguously.
• Research design is a logical structure of the inquiry; that is, it deals with the logical problem
and not with the logistical problem. Thus, it is improper to treat research design as a mode
of data collection.
• In determining the research design, one must avoid committing
✓ reductionism
✓ ecological fallacy
✓ individualistic fallacy

Reductionism is an overly strict limitation on the kinds of concepts and variables to explain
a broad range of human behavior. Essentially, reductionism tends to deceive a researcher
into believing that certain particular units of analysis or variables are more relevant than
others.
✓ Examples:
o researchers with economics background may consider only economic
variables such as supply and demand
o sociologist may consider only sociological variables such as norms, values,
and roles
o accountants may consider only accounting variables such as profit, costs,
and revenues

Ecological fallacy is the process of erroneously drawing conclusions about individuals

based solely on the observation of groups.

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✓ For example, a researcher conducted a survey on the methods of assessing the

financial risk in the banking sector and found out that those involved in risk
management of the banks are adept in conducting risk assessment using
sophisticated models. Such researcher might commit an ecological fallacy if he/she
concludes that all accountants in the banking sector are skillful in risk assessment.

Individualistic fallacy entails conclusions derived from general patterns of attitudes and
actions of people whom the researcher has previous knowledge or familiarity.
✓ For instance, if a researcher knows a rich businessman who has no formal
education, he/she might commit this fallacy if the conclusion flows from the
previous observation that education has no influence on the wealth of a person.
Obviously, the general pattern of higher education relating to higher income is not
far-fetched.
• In preparing the research design, the conditions to be considered include
a. purpose of the research
b. unit of analysis
c. point of focus
d. time dimension

Purposes of Research

• The purpose of a research answers the question of "why" the research is to be conducted.
✓ A research can have any or a combination of the following purposes:
o description
o explanation
o exploration
✓ While it is useful to distinguish the three purposes of research, it makes sense to
note that many studies have elements of all three.

A descriptive research is concerned with delineating the way things are -- the current state of
condition or existing manner of doing things.
o This type of study has two primary purposes:
1. to portray accurately the characteristics of a particular phenomenon
2. to determine the frequency with which the phenomenon occurs or associated
with something else.
o It concentrates on the accuracy and completeness by which the phenomenon is
depicted and revealed.
o The researcher should be able to determine the appropriate measurement and data-
gathering methods to ensure the right quality of descriptions.

In an explanatory research, the researcher would like to find out why certain things happen
or why people prefer to do certain things.
o This type of research deals with the use of variables to find out the relationships
between these variables which could explain why certain things happen.
o The ability of a research to explain commonly gives it the ability to predict. This
predictive power assumes the ability to establish cause-effect relationship.

In an exploratory research, the researcher examines a relatively new and unstudied subject
matter.
o Exploratory studies are typically done for three purposes:
1. to satisfy the researcher's curiosity and desire for better understanding

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2. to test the feasibility of undertaking a more careful study

3. to develop the methods to be employed in a more careful study.

Unit of Analysis

• This part of the research design answers the question "who." It specifies the source of
data or the units of observations.
• The unit of analysis of a research can be one or a combination of the following:
1. individuals
2. groups
3. organizations
4. social artifacts

Individuals frequently serve as the unit of study. Understandably, social phenomena are
studied by examining and analyzing the individuals who are part of such phenomena.
✓ The individual, as a unit of analysis, may also be characterized in terms of their
membership in a social grouping.
✓ While the individuals serve as the unit of analysis, the write-up of analysis is not on
the individual level since any given individual's attitudes or behaviors are generally
of no interest to many researchers. Rather, the researcher is interested in the
attitudes and behaviors of an aggregate of individuals.

Groups that may be studied include the family, work group, position cluster, industry
sectors, geographical areas, or portion of an organizational hierarchy.

Organizations in business, professions, and society can also be the unit of analysis.
Examples:
✓ business organizations in the form of partnerships and corporations
✓ professional organizations
✓ churches
✓ socio civic organizations
✓ government agencies
✓ educational institutions
✓ non-profit organizations

Social artifacts are products of social beings or their behavior.

✓ These can be social objects, such as factory buildings, company cars, or records
of accounts, paintings, and the like.
✓ They can also be social interactions such as conferences, product launchings,
weddings, religious ceremonies, business meetings, congressional hearings,
and labor strikes.

Point of Focus

• The point of focus answers the question "what" that can be the (1) characteristics, (2)
orientations, and (3) actions.

Characteristics refer to the state of being of the unit of analysis.

o For instance, individual audit staff may be characterized in terms of sex, gender, age,
marital status, position, work habits, and the like.

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o Groups and organizations may be characterized by size, structure, location, and

aggregated description of their members.
o Objects may be characterized in terms of physical attributes like size, weight, and
color.
o Social interactions can be characterized in terms of the place or location and timing
of their occurrence and the people involved.

Orientations are attitudes, beliefs, personality traits, prejudices, predispositions, and the
like.
o In the case of groups and organizations, orientations refer to their philosophies,
purposes, policies, regulations, processes, and procedures.
o Social interactions might have political or religious orientation, anti-labor or anti-
poverty orientations, and the like.

Actions are accounts of events or processes undertaken by the unit of analysis. Examples
are voting, bond buying, investing, holding strikes, engaging in credit transactions,
prosecution, product advertising, and the like.

Time Dimension

• This answers the question "when" to do the research. Time plays significant roles in the
design and conduct of research.
✓ First, it is a vital element in determining causal relationship between variables.
✓ Second, it is also a basis of making generalization in the findings of the study.
One can conduct a cross sectional or longitudinal research.

A cross-sectional study is conducted in a unit of study at a given time.

A longitudinal study is designed to permit observations of a unit of study over an
extended period of time.
o Longitudinal studies are subdivided into three:
✓ trend study
✓ cohort study
✓ panel study

A trend study looks into the dynamics of a particular attribute of the population over
time.

A cohort study is a research where a group having common characteristics or

experience or have received a particular treatment within a defined period is tracked
over an extended period of time.
✓ The said group is compared with another group who are not affected by the
characteristics or conditions under investigation.
✓ The cohort members are linked in some way or who have experienced the
same significant life event within a given period.
✓ Examples of cohorts: birth (i.e., all those who were born between 2015 and
2020) disease, education, employment and family formation

A panel study measures the same sample of respondents at different points in time.
✓ Unlike trend studies, panel studies can reveal both net change and gross
change in the dependent variable.

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✓ Panel studies can reveal shifting attitudes and patterns of behavior that
might go unnoticed with other research approaches.
✓ Depending on the purpose of the study researchers can use either:
o a continuous panel, consisting of members who report specific
attitudes or behavior patterns on a regular basis,
o an interval panel, whose members agree to complete a certain number
of measurement instruments only when the information is needed.
✓ In general, panel studies provide data suitable for sophisticated statistical
analysis and might enable researcher to predict cause-effect relationships.

Classification of Research Design

1. Experimental design
2. Non-experimental design

Classification of non-experimental design

a. Survey - deals with a large population, usually studied through samples.

b. Case study - focuses on a single subject group of related subjects.
c. Relational design - entails measurement of a range of variables to find out their
relationships. This is also called correlational design since correlation is used in the
analysis of relationships.
d. Comparative design - assesses the characteristics of two subjects of study and
determines their similarity and dissimilarity.
e. Longitudinal design - involves repeated observations of the same variables over long
periods of time. It tracks the same subjects to find out the differences in the attributes
being studied.
f. Analytical - uses mathematical tools to predict, explain, or give substance to a theory.
g. Archival - uses objective data collected from repositories such as census, economic
and political surveys, statistical records, survey archives, and other written records.
✓ It is also defined as the study of existing data since the existing data are collected to
answer the research questions.

Experimental design

• Experiment – hailed as the most powerful design for investigating relationships between
and among variables.
• It has become the most prestigious means of advancing scientific knowledge.
• An experiment typically implies a highly controlled situation wherein researcher tries to
make the predicted relationship occur.
• In an experiment, the researcher looks for a relationship. The researcher changes one
variable and measures the resulting behavior through measurement of another variable.
Then he/she sees if the manipulation changed the behavior so that the predicted
relationship is observed.
• In a social science experiment, the researcher actively tries to change the situation,
circumstance or experience of the participants. This process, called manipulation, leads to
a change in behavior of the participants that is measured.
• The basic idea underlying all experimental research is: try something and systematically
observe what happens. Changes are planned and deliberately manipulated in order to
study its effect(s) on one or more outcomes.

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• Experiments are employed to test a causal hypothesis. The logic behind is: If the hypothesis
is correct, the researcher sees an influence or change in the behavior whenever he does
this or that to the participants.
• Generally, the experimenter is present on the scene when the data are collected so that
he/she could exercise considerable control over the experimental environment. This
control over the research process allows the experimenter to establish causation rather
than mere correlation. In fact, the establishment of causation is the usual goal of the
experiment.

• The hallmark of experimentation is that the researcher manipulates or changes certain

aspects of a situation. Then he/she examines whether the manipulation causes or
influences the behavior being studied.

Characteristics a formal experiment

1. There are at least two (but often more) conditions that are compared to assess the
effect(s) of a particular treatment.

2. There are usually two groups of subjects-an experimental group and a control or
comparison group, although it is also possible to conduct an experiment with only one
group by providing all treatments to the same subjects.
✓ The experimental group receives a treatment of some sort while the control group
receives no treatment or the comparison group receives a different treatment.

3. The independent variable is directly manipulated by the researcher.

✓ The researcher deliberately and directly determines what forms the independent
variable will take and then which group will get which form.
✓ The researcher actively manipulates a proposed influence and then measures the
behavior.
✓ Manipulation refers to the act of determining the treatment on one situation,
condition, or group that is different from the other in an experiment
o To manipulate a variable, a researcher must decide who is to get something
and when, where, and how he/she will get it.
o It also implies the process of pulling each category apart from one another.

✓ The independent variable in an experiment may be established in several ways:

• One form of the variable versus another.

o For example, a study comparing the lecture method and case study
method of teaching accounting.
• Presence or absence of a particular form.
o For example, a study comparing the use of power point slides
presentation versus no slide presentation.
• Varying degrees of the same form.
o For example, a study comparing the effects of different specific amounts
of accounting teacher enthusiasm on student attitudes towards financial
accounting.

4. The effect of the manipulation of the independent variable on the dependent variable is
observed or measured.

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5. The experiment uses random assignment.

✓ This means that every individual who is a participant in the experiment has an equal
chance of being assigned to any of the experimental or control conditions being
compared.
✓ This should be distinguished from random selection which means that every group
of a population has an equal chance of being selected to be a sample.

✓ Random assignment should take place before the experiment begins. It allows the
researcher to form groups that are equivalent, right at the beginning of the study.
Thus, they differ only by change in any variable of interest.

✓ Random assignment is intended to eliminate the threat of additional, or extraneous,

variables-not only those that the researchers are aware, but also those that they are
not aware- that might affect the outcome of the study.

✓ It is one of the reasons why experiments in general are more effective than other
types of research for assessing cause-and-effect relationships.

✓ Random assignment is also the main distinction between true experiments and
quasi-experiments.

Forms of true experimental designs that are commonly used in social research

1. Randomized Posttest Only Control Group Design. This involves two groups formed by
random assignment. One group receives the experimental treatment while the other does
not. Both groups are post-tested on the dependent variable. A diagram of this design is
shown in Figure 5.

R X1 Outcome
Random Workshops with Posttest Auditor
assignment of 25 sensitivity Morale
auditors to training Questionnaire
50 experimental
auditors Dependent
randomly Variable
selected
R X2 Outcome
Random Workshops that Posttest Auditor
assignment of 25 do not have Morale
auditors to sensitivity Questionnaire
experimental training
Figure 5. Randomized Posttest Only Control Group Design

2. Randomized Pretest-posttest Control Group Design. This differs from the first design
solely in the use of the pretest. Two groups of subjects are used, with both groups being
measured or observed twice. The first measurement serves as the pretest, the second as
the posttest. Random assignment is used to form the groups. The observations are
collected at the same time for both groups. The diagram for is shown in Figure 6.

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R O X1 O
Random Pretest Auditor Treatment Posttest
assignment of Morale
Questionnaire Workshop with Auditor
25 auditors to
(Dependent Sensitivity Morale
experimental
Variable) Training Questionnaire
50 group
auditors Dependent
randomly Variable
selected
R O X2 O
Random Pretest Auditor Treatment Posttest
assignment of Morale
Questionnaire Workshop with Auditor
25 auditors to No Sensitivity Morale
(Dependent
experimental Training Questionnaire
Variable)
group group
Figure 6. Randomized Pretest-Posttest Only Control Group Design

3. Solomon Randomized Four Group Design. This involves random assignment of subjects to
four groups, with two of the groups being pretested and the other two not. One of the
pretested groups and one of the unpretested groups are exposed to the experimental
treatment. All four groups are then posttested. The diagram is shown in Figure 7.

R O X1 O
Random Pretest Auditor Treatment Posttest
assignment of 25 Morale Auditor Morale
auditors to Questionnaire Workshop with Questionnaire
experimental (Dependent Sensitivity (Dependent
group (Group 1) Variable) Training Variable)

R O X2 O
Random Pretest Auditor Treatment Posttest
assignment of 25 Morale Auditor Morale
auditors to Questionnaire Workshop with Questionnaire
100 control group (Dependent No Sensitivity (Dependent
auditors (Group 2) Variable) Training Variable)
randomly
selected then
divided into R X1 O
four groups Random Treatment Posttest
assignment of 25 Auditor Morale
auditors to Workshop with Questionnaire
experimental Sensitivity (Dependent
group (Group 3) Training Variable)

R X2 O
Random Treatment Pretest Auditor
assignment of 25 Morale
auditors to Workshop with Questionnaire
control group No Sensitivity (Dependent
(Group 4 Training Variable)

Figure 5.7 Solomon Randomized Four Group Design

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Experimental accountancy research covers a broad range of topics such as:

✓ investments
✓ judgment and decision-making
✓ risk-taking behavior and analysis
✓ strategic planning
✓ disclosures.
✓
Examples:
• An experiment can examine manager’s' incentives and how they affect the manner they
report events. It can also look at how they affect the manager's decisions.
• Experiments can be useful in studying the auditor's judgments and how they affect their
opinions.
• Auditor client interactions are also good subjects of experiments.
• Experiments can also look into the interaction among participants in the financial
reporting process
• The negotiation process between auditors and clients,
• The increasing role of the audit committee in financial reporting process
• How accounting methods and disclosures affect the prediction of earnings can also be
studied through experiments.

A quasi-experimental design follows the procedures of an experiment but does not randomly
assign participants or people to the treatment and comparison groups.
✓ It looks a bit like an experimental design but lacks the key ingredient of random
assignment.
✓ It is more easily implemented than the randomized one.
✓ lt appears to be inferior to randomized experiments.
✓ Groups are selected upon which a variable is tested, without any random pre-
selection processes.
o For instance, in performing this type of design in an audit staff training class, the
participants of the study can be selected arbitrarily through seating arrangement
or by alphabet division.
o This type of selection is convenient for it causes little disruption as possible.

Survey

• In a survey, the researcher is interested in the accurate assessment of the characteristics

of whole population. However, the study is done on the samples from the population. By
studying the samples, the researcher is able to discover the relative incidence, distribution,
and interrelations of the variables.

• Survey is considered the best design available to researchers who are interested in
collecting original data for describing a population too large to observe directly.

• A survey may be used for descriptive, explanatory, and exploratory purposes. It can also
be used to show changes in the subject of study and make comparisons between certain
attributes.

• A survey is also an excellent vehicle for measuring attitudes, opinions, beliefs, knowledge,
and abilities. This is chiefly used in studies that have individual person as the unit of
analysis. Although this can be used also for groups or organizations, a survey necessitates
that some individual persons become respondents or informants.

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• In a survey, the main pathway by which information is collected is by asking questions; the
answers to these questions constitute the data of the study.

• Sample applications of surveys

✓ Survey research is used primarily in business to find out customer satisfaction with
respect to products and services strategies are enhanced, innovative measures are
formulated, and products are further developed.

✓ Survey has a broad appeal in social sciences including political science because it
reflects the attitudes, preferences, and opinion of the people from whom the society's
policy makers derive their mandates.

✓ Development projects also use survey to find out the level of acceptance of the people
and their relative capacity to adapt to the possible effects of development in the
place. To be considered as formal research, these survey designs should have the
required elements, systems and procedures that formal researches have.

Case Study

• The case study investigates trends and specific situations in many scientific disciplines.
Basically, a case study is an in-depth inquiry of a particular situation rather than a
sweeping statistical survey.
• It is also useful for testing whether scientific theories and models actually work in the real
world.

• It is used to narrow down a very broad field of research into one easily researchable topic.
✓ For instance, instead of conducting a survey of all manufacturing companies in a
geographical area, a thorough examination of selected companies that
manufacture animal feeds is done in the form of a case study. The results of the
study would be an extensive portrayal of the attributes, conditions, and actions
of the feed manufacturers.

• It is best to synergize a case study with a survey.

✓ It is valid to conduct a survey that uses more general statistical processes and tie
it with a case study that provides more realistic responses.
✓ For example, a statistical survey might show how much time accountants spend
in surfing the internet, but it is through a case study of a small group of
accountants that will determine why this is so.

• A case study is also characterized by its flexibility.

✓ While a pure survey or experiment could prove or disprove a hypothesis, a case
study might introduce new and unexpected results during its course, and lead to
research taking new directions.
✓ When research results are presented publicly, a case study usually makes more
interesting topics than the pure statistical surveys. Understandably, the general
public has little interest in statistical calculations but some well-placed case
studies can have a strong impact.

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• The advantage of the case study design is that the researcher can focus on specific and
interesting stories. Thus, the research is thorough. However, it requires that note-taking
should be meticulous and systematic.
• In the design of a case study, it is important to plan how the researcher is going to address
the study. Unlike a scientific report, there is no strict set of rules tor a case study. The
most important part is making sure that the study is focused and concise; otherwise, the
researcher will end up having to wade through a lot of irrelevant information.

• In a case study, the researcher takes a passive stance by being more of an observer than
an experimenter.
✓ The analysis of the case results tends to be more opinion-based than statistically
treated. The idea is for the researcher to collate data into a manageable form and
construct a narrative around them.
✓ In a multi-subject case, each subject must be treated individually but cross-case
conclusions can be drawn. There really is no right or wrong answer in a case
study.

Research Variables

• One important task in the operationalization process is variable identification. A variable is an

empirical property that can take two or more values.

• Variables are measured so that relationships between them can be identified and tested.

• Variables are classified based on three dimensions:

1. unit of measurement
2. study design
3. causality

✓ Variables based on the unit of measurement

a. Categorical variables, also called discrete variables:
✓ Do not vary in degree, amount or quantity but they are qualitatively different.
✓ Categorical variables can be dichotomous or polytomous
o Dichotomous variables can have only two values, such as yes- no, good-
bad, male-female, day-night, rich-poor, hot-cold, employed-
unemployed, debit-credit.
o Polytomous variables can be divided into more than two categories,
such as political parties, categorized into liberal, democrat, labor, and
the like. Categories of different types of assets, liabilities, expenses, and
the like are polytomous variables.
✓ Two categorical variables can be used to make a relational proposition.
o Examples: educational attainment and position; type of business
organization and business location; gender of managers and brand of
laptop.

b. Quantitative variables, also called continuous variables:

✓ Take on values within a given range or in some cases an infinite set.
✓ They exist in some degree, rather than all or none along a continuum from less
to more.

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✓ This type of variable is capable of taking an ordered set of values within a certain
range.
o The values reflect at least a rank order such that a larger value of the
variable means more of the property in question than a smaller value.
Oftentimes, the quantitative variables use a scale.

✓ Two quantitative variables can be used in making a proposition.

o Examples:
a. mathematics achievement can be related to accounting
achievement
b. classroom humanism to student motivation
c. level of participation to success of project.
o In accounting:
d. the range of financial performance can be related to the level of
investors' willingness to invest
e. the level of investor sophistication can be associated to the
investor’s judgments
f. the degree of gravity of the independence threats can be related to
the auditor's liability.

✓ One categorical variable and one quantitative variable can also have relationship.
o Example:
a. the method of training the audit staff to write audit reports
(categorical) and the level of achievement of the staff in writing the
report
b. the nationality of consultants (categorical) and the percentage of
accomplishment of work targets;
c. the coaching approach used for new salesmen (categorical) with
their level of anxiety.

✓ Variables based on the study design

a. active variables - can be manipulated, changed or controlled.

b. attribute variables - cannot be manipulated, changed or controlled, and reflect the
characteristics of the study population.

o Example:
✓ In measuring the relative effectiveness of teaching models (lecture, case study,
and group work) for new staff auditors, the active variables would be the
structure and contents of the models since they could vary and any model might
be tested on any population group. The contents, structure, and testability of a
model on a population group may also vary from researcher to researcher.
✓ On the other hand, the attribute variables include the characteristics of the new
staff auditors (such as their age, gender, religion, attitudes, and level of
motivation) since a researcher does not have any control over characteristics of
these new staff.

✓ Variables depicting causality

a. independent - An independent variable is capable of effecting change in other variable. It
is the supposed "cause," responsible for bringing about change(s) in a phenomenon or
situation.

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o In an experiment, these are the conditions or characteristics that the

experimenter manipulates or controls in an attempt to ascertain their
relationship to observed phenomena. The independent variable is also called the
presumed cause, the stimulus, the antecedent, and the manipulated one.
b. Dependent - the outcome of the change(s) brought about by changes in an independent
variable.
o This is the condition or characteristic that appears, disappears, or changes as the
experimenter introduces, removes, or changes the independent variable.
o It is also called the variable where value is dependent upon the other but which
cannot itself affect the other.
o lt is called by various names such as the presumed effect, the response, the
consequence, and the measured outcome.
c. intervening - Intervening variable is a conceptual mechanism through which the
independent variable and the moderating variable might affect the dependent variable.
o It links the independent and moderating variable with dependent variable.
o In certain cases, the relationship between the independent and dependent
variables cannot be established without the intervention of the intervening
variable.

d. moderating - also called explanatory variable, is a secondary type of independent variable

expected to affect the dependent variable, yet it is expected that the impact is not as big
as the primary independent variable.
e. Control variable also called extraneous variable –is a secondary type of independent
variable that also affects the dependent variable but which can be controlled; if it remains
uncontrolled, it becomes extraneous.

✓ Extraneous variables may influence the dependent variable but are not part of the
study. The four ways to control this type of variable are
1. to eliminate it as a variable
o The principle behind this is to eliminate the effect of a possible influential
independent variable on a dependent variable by choosing the subjects
so they are as homogenous as possible on that independent variable.
2. to apply randomization
o By randomization, the experimental groups can be considered equal in
all possible ways.
3. to build it right into the design as an independent variable
o In building the extraneous variable in the design, it can then be controlled
as an attribute variable. Thus, the research will yield additional
information about the effect of the variable on the dependent variable
and about its possible interaction with other independent variables.
4. to match subjects.
o In matching the subjects, the researcher splits a variable into two or more
parts (for example, high and low level) and then randomize within each
level.

• A causal relationship implies that the change in one variable causes change in another
variable.
✓ This relationship is expressed as "X causes Y, if…” In other words, there is a
relationship between X and Y.
✓ The relationship is asymmetrical so that a change in X results in a change in Y but not
vice versa.

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✓ Further, this implies that a change in X results in change in Y regardless of the actions
of other factors.
• Causal relationship is expressed in terms of direction and strength.
✓ The direction of relationship can either be positive or negative.
o In a positive relationship, both variables vary in the same direction. That means
an increase in the value of one variable is accompanied by an increase in the value
of the second variable. It follows that a decrease in one variable is accompanied
by a decrease in the other variable.
o Negative relationship means that an increase in one variable is accompanied by
a decrease in other variable. Therefore, the direction tells whether the
relationship between variables is either positive or negative.

✓ The strength of relationship, also called magnitude, shows the extent to which the
variables co-vary positively or negatively. It is measured by correlation coefficient.

✓ The relationship between variables may be determined through the correlation

analysis using a statistical method called the Pearson Product-Moment Correlation
Coefficient.

✓ In theoretical statistics, many of the important characteristics of a distribution can be

discussed as "moments" of the distribution. This method computes the moments of
two variables and uses the products of the moments in arriving at the correlation. The
coefficients obtained in this method measure the strength of the linear relationship
between the two variables.

✓ In a correlation analysis, the scale/ level of measurement used is the interval or ratio.
The obtained correlation coefficient takes an absolute value between 0 and 1, where
0 denotes no correlation; +1 denotes perfect correlation between directly related
variables (positive correlation); and -1 denotes perfect correlation between inversely
related variables (negative correlation). The statisticians use the following ranges for
classification of results:

less than 0.2 – very weak correlation

0.2-0.4 – weak correlation
0.5 – moderate correlation
0.6-0.8 – strong correlation
more than 0.8 – very strong correlation

✓ While correlation analysis is capable of determining the existence of linear association

between variables, it is unable to prove anything about cause-and-effect
relationships.
o The central focus of the analysis is to establish an index that provides, in a
single number, an instant measure of the strength of association between two
variables.
o Nevertheless, correlation analysis is important because an awareness of
linkages between variables can be the first step in a broader investigation of
the causal relations.

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Research Hypothesis

• Hypothesis is a proposition that is stated in testable forms and predicts a particular

relationship between two or more variables.
• As a proposition, it contains a tentative explanation for certain behaviors, phenomena, or
events which have occurred or will occur.
• It states the researcher's expectations concerning the relationship between variables in the
research problem.
• A hypothetical statement implies insufficiency of presently attainable evidences and,
therefore, a tentative explanation.

• A hypothesis is testable when the analysis of data could possibly enable a researcher to
clearly support or refute certain proposition about the subject variables.

✓ Specifically, a testable hypothesis shows a relationship between the independent and

dependent variables.
✓ It must be empirically testable, meaning the variables in the hypothesis are measurable.
o The statement "Salesmen taught by Method A will produce higher yield than
salesmen taught by Method B" is a testable hypothesis.
o However, the statement "Salesmen taught by Method A will be better salesmen"
is non- testable because of the use of the word "better" which makes the
hypothesis a judgmental statement and difficult to measure.
✓ Other key words that connote a non-testable hypothesis are "should be," "ought to be,"
and the like.
✓ Hypothesis is also non-testable or untestable hypothesis if it calls for techniques that
are not available with the present state of the art or if it calls for an explanation which
defies known physical or psychological laws.

• In summary, a testable hypothesis should state relationship between variables and the
direction of said relationship. It does not use value judgment, meaning, the hypothesis
should not be judgmental.

• Some samples of hypotheses are as follows:

1. Hypotheses on the Causes of Urbanization. If the research question is "What factors
determine urbanization?" the hypotheses that can be derived are as follows:
o The degree of urbanization in a society varies directly with the dispersion of objects
of consumption.
o The degree of urbanization in a society varies directly with the division of labor.
o The division of labor in a society varies directly with the dispersion of objects of
consumption.
o The degree of urbanization in a society varies directly with technological
development.
o Technological development in a society varies directly with the dispersion of
objects of consumption.
2. Hypotheses on Political Violence. If the research question is "What causes political
violence?" the hypotheses that can be derived are as follows:
o The potential for group violence increases as the intensity and Scope of relative
deprivation among members of a group increases.
o The potential for political violence varies strongly with the intensity and scope of
normative justification for potential Violence among members of a group.

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o The potential for specifically potential violence generally varies strongly with the
potential for group violence.
o The magnitude of political violence varies strongly with the potential for political
violence.
3. Hypotheses on Bureaucracy. If the research question is "What is the effect of the
bureaucratic form of organization in a business entity?" the hypotheses can be as follows:
o The greater the centralization in organizations, the greater the volume of
production and vice versa.
o The greater the centralization, the greater the efficiency and vice versa.
o The greater the centralization, the greater the formalization and vice versa.

• Research questions can also be restated as hypothesis as shown in the following examples:
✓ Question: Will students who are taught accounting by a teacher of the same gender
like the subject more than students taught by a teacher of different gender?
o Hypothesis: Students who are taught accounting by a teacher of the Same gender
will like the subject more than the students who are taught by a teacher of
different gender.
✓ Question: Is the relationship between clients and auditors in audit firms that use
client-centered approach different from those using task-oriented approach?
o Hypothesis: Auditing firms that use a client-centered approach will have different
client-auditor relationship from those using task- oriented approach.

Measurement of Data

• Measurement is the process of determining the value or level, either qualitative or

quantitative, of a particular unit of analysis. It is not confined to numerical or quantitative
specification but can be qualitative as well.
✓ Quantitative attributes are measured in numbers.
✓ Qualitative attributes have labels or names rather than numbers, assigned to their
respective categories, such as professional organization affiliation, political party,
affiliation, religious affiliation, and the like.
✓ While qualitative attributes can be labeled with numbers rather than names, the
numbers do not have properties of the number system: they cannot be added,
subtracted, multiplied or divided.

• The measurement system has four levels:

a. The nominal level groups and labels data only; it reports frequencies or percentages.
b. The ordinal level ranks data and uses numbers only to indicate rankings.
c. The interval level assumes that differences between scores of equal magnitudes really
mean equal differences in the variable measured.
d. The ratio has all the characteristics of the three levels, plus the true zero point.

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The characteristics and basis of empirical operation of the four levels of measurement are shown in
the following Table.

Type of Scale Characteristics Empirical Operation

Nominal No order, distance or origin Determination of equality
Ordinal Order but no distance or origin Determination of greater or
lesser values
Interval Both order and distance, but no Determination of equality of
origin intervals or difference
Ratio Order, distance and origin Determination of equality of
ration

• A sound measurement has three basic characteristics: validity, reliability, and precision.
a. Validity is the extent to which
✓ the measuring instrument is actually measuring the concept in question, not some
other concepts;
✓ that the concept is being measured accurately.
✓ The instrument is valid if it tackles all the aspects of the concept, measuring exactly
what one wants to measure.
o For example if the researcher wants to measure intelligence level of a group of
employees, an intelligence test, not other type of test, is constructed.
b. Reliability is a matter of whether a particular technique, applied repeatedly to the same
object, would always yield the same result.
✓ The measurement is dependable. This implies that every time the researcher uses
the same instrument, it will yield the same answer.
✓ Reliability is also the quality of consistency that the instrument or procedure
demonstrates over a period of time.

c. Precision represents the fineness of distinctions made between attributes composing a

variable.
✓ For example, the description of an accountant as “44 years old" is more precise than
"in her forties." Saying that the size of laptop monitor is 11.5 inches long is more
precise than saying "about a foot long

• The other aspect of measurement is the use of scaling design.

✓ This refers to the procedure of assigning numbers or other symbols to a property of objects
in order to impart some of the characteristics of numbers to the properties in question.
✓ For example:
o in measuring the temperature of air, a researcher looks at the property or
temperature thru an expansion or contraction of materials such as mercury. Thus, it
is possible that the researcher devises a glass tube arrangement with mercury.
o in measuring the durability or paint, the researcher uses a machine with an attached
scrub brush that applies a predetermined amount of pressure as it scrubs. The
number of brush strokes is counted.
o in measuring an accountant’s supervisory capacity, a peer group is asked to rate
him/her on various questions earlier prepared.

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• Common types of scales used in research are rating scales and ranking scales
✓ Rating scales can be dichotomous or have multiple choices.
o Dichotomous scale has two possible answers to a question.
o A scale with multiple choices has three or more possible answers.

Example of dichotomous scale:

In arranging this trip, did you personally phone “Philippine Airlines?”
 Yes  No

Example of scale with multiple choices:

With whom are you travelling on this flight?
 No one  Business Associates
 Children Only  Relatives
 Spouse  Friends
 Spouse and Children  Organized tour group

✓ The other measurement scale is the Likert scale. This is used in statements wherein
the respondent shows the amount of agreement/disagreement as shown below:

Small airlines generally give better service than the large ones.
o Strongly o Disagree o Neither o Agree o Strongly
Disagree Agree nor Agree
Disagree

✓ Semantic differential is a scale connecting two bipolar words where respondent

selects the point that represents his opinion.

Philippine Airline is

Large ←--------------------------------------------→ Small

Experienced ←--------------------------------------------→ Inexperienced
Modern ←--------------------------------------------→ Old-fashioned

✓ Importance scale is a scale that rates the importance of some attributes as shown
below:

Not at all Not Very Somewhat Very Extremely

Important Important Important Important Important
1 2 3 4 5
Airline food
service to me
is

✓ Attribute rating scale assesses some attributes from poor to excellence as shown as
below:

Poor Fair Good Very Good Excellent

1 2 3 4 5
Airline food
service to me
is

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✓ Intention-to-buy scale describes the respondent’s intention to buy something.

Following are some samples of this type of scale:

Definitely Probably Not Not Sure Probably Use Definitely

Not Use Use Use
1 2 3 4 5
If an in-flight
telephone
was available
on long
flight, I
would

How interested are you in the following areas? Please tick as appropriate
Very Somewhat Neutral Somewhat Very
Interested Interested Interested Interested
1 2 3 4 5
Investment
Management
Alternative
Investments
Risk
Management
Financial
Modeling
Corporate
Finance
How often do you read each of the following?
Very Somewhat Neutral Somewhat Very
Interested Interested Interested Interested
1 2 3 4 5
Financial
newspapers
Financial
magazines
Financial
Journals

✓ Below is a sample of a ranking scale.

Which of the following do you consider as your problem in financing or availing the loan
facilities? Please rank those that affect your business.

a Inadequate amount of the loan facility

b Difficulty in meeting the collateral requirements
c High rate of interest
d High default charges
e Long processing time of application
f Difficulty in completing the documentary requirements

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g Lack of information on the loan facility

h Lack of assistance/help from the creditor staff
i Lack of available financing packages/programs

Research Proposal

• A proposal is a document that presents in detail the intended activities to be undertaken to

pursue an investigation.
• It is written primarily to seek approval for funding, timing or schedule, and other resource
requirements.
• A research proposal has the following contents:

Chapter 1- Introduction
1. Background of the Study
2. Statement of the Problem
3. Objectives of the Study
4. Significance of the Study
5. Scope and Limitations of the Study

Chapter 2 - Review of Related Literature

Chapter 3 - Research Framework
1. Theoretical Framework
2. Conceptual Framework
3. Operational Framework

Chapter 4 - Research Design and Methods

1. Description of the Research Design
2. Data-Gathering Methods
3. Data Gathering Instruments
4. Sampling Plan

• The description of the research designs and methods in the research proposal is expressed in
future tense since they are meant for prospective implementation.
• When the data gathering is complete and the research report is written, this chapter on
research design and methods will be converted into past tense.
• Because of this conversion, the research proposal is, by nature, a tentative document.

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