ACC8000: Research in Accounting Practice - Assignment 3 Report

This report provides a comprehensive analysis of agency theory within the context of accounting practice. It begins by defining agency theory and examining how agents might be motivated and behave in relation to preparing accounts, as well as in other areas such as corporate governance. The report then explores alternative theories, such as intrinsic motivation, which challenge the assumptions of agency theory. It delves into methods for monitoring agents to ensure they act in the best interests of principals, and discusses how agency theory informs the compensation of executives. The report also analyzes a research paper, identifying the research method employed and exploring how institutional theory can improve accounting practices. Finally, it examines how the research paper utilizes existing literature to link culture with accounting values, providing a well-rounded understanding of the subject matter and its practical implications. The report is based on the assignment brief provided and is a solved assignment for students on Desklib.

Running head: ACCOUNTING 1
Research In Accounting Practice
Name
Affiliation
Date

ACCOUNTING 2
Question one
a. What does agency theory suggest about the way agents might be motivated and
behave in relation to preparing accounts?
For many years, the theory of agency has been considered as an important element in
accounting. The concept of the theory provides a better theoretical framework that helps in
understanding the processes in a given company from the principle of an agent. In this case,
relationship agency can be defined as a relationship agency like a contractual relationship where
one or more people (principle) employs an (agent) with an intention of performing a given action
on his behalf. This requires delegating powers of decision-making to a given agent. Therefore,
the theory asserts that there exists a bigger relationship between agents and the principle where
one individual in an accounting business can be regarded as director, and supervisor and for an
agent, an individual may be categorized as a subordinate (Miller, 2009). Therefore, the
accounting principle will be required to delegate his authority of making decisions to agents. In
this case, the agents are expected to perform given actions so as to attain their reward. Because
agents and principles are known as "rational economic person" self-interest motivates them
depending on their information, conviction, and preference to perform a decision that favors the
accounting principle and avoid the risk. According to the theory, it suggests that agents are
responsible for selecting the vector plans in an accounting activity which involves investment
decisions, financial decisions, and operational decisions. In addition, agents are always rewarded
by an organization's contractual agreement. Further, the theory illustrates that agents are
responsible for choosing given principles, steps, and actions that can influence their events
(McKnight, & Weir, 2009).

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b. What does agency theory suggest about the way agents might be motivated and
behave in areas other than accounting?
The agency theory illustrates the major controversial and influential parts of
macroeconomics. To most people, the theory is considered to be very powerful and can be used
in various ways by providing a theoretical analysis for understanding contractual provisions,
accounting methods, reward, and corporate governance. This theory illustrates how agents might
be motivated and behave in areas beyond accounting. In corporate governance, agents are
considered to represent an organization's transactions and are expected to illustrate the necessary
interests without considering self-interest. The theory indicates that a difference in the interests
of agents and principles may result in conflict as a result of the conclusion between the interest
of the principle and agents (Park, 2009). As a result of disagreements and miscommunication,
there may rise different problems which may affect government operations. The theory indicates
that agents can use corporate governance to change the rules on which they operate and regain
the principal's interest. By employing an agent as a representative of the interests of the principal,
an agent must be in the position to overcome a problem of "lack of information" regarding the
performance of the agents of a given task. By using the agency theory, the agents can be in the
position to gain incentives that encourage them to perform "union with the principal's interest".
In this case, the Agency theory is adopted to design different initiatives of agents and principals
by considering the interest that motivates them to act (Mustapha, & Ahmad, 2011).
c. Outline one alternative to agency theory, which challenges what motivates agents?
An intrinsic theory acts as an alternative to the agency theory which challenges what
motivates agents. In this case, an intrinsic theory is known as a behavior that is fostered by an
internal reward. Moreso, intrinsic motivation makes a difference between external and internal

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rewards. According to Siddiqui, et al (2013), "Intrinsic motivation occurs when we act without
any obvious external rewards. We simply enjoy an activity or see it as an opportunity to explore,
learn, and actualize our potentials." In case, people in an organization are intrinsically motivated,
they become more creative. Intrinsic motivation is a vital tool in various sectors such as
accounting, education and many others. Auther described processes to be intrinsically motivating
in case "people engage in it for its own sake, rather than in order to receive some external reward
or avoid some external punishment. We use the words fun, interesting, captivating, enjoyable,
and intrinsically motivating all more or less interchangeably to describe such activities." Intrinsic
motivation identifies various factors such as curiosity, challenge, control recognition, and
competition and cooperation. various experts have indicates that providing unwanted rewards
results into unexpected costs. This theory provides a strong critique concerning agency theory by
indicating it as "bad for practice." However, enough analysis is supposed to be performed in
order to determine the level of critique provided by intrinsic theory on agency theory. According
to Sanjaya, and Christianti (2012), "there is no claim (in the relevant psychology research) that
all motivation goes away, even if intrinsic motivation is "killed" by explicit incentives."
Therefore, an intrinsic theory is considered to be an important tool for ensuring a well-balanced
life of an individual (Marquis, et al, 2016).
d. How might agents be monitored to ensure they act in the best interest of principals?
For agents to act in the best interests of principals, various actions need to be performed
that is to say; first, agents should not be allowed to act for many principals. For example, if a
given agent is appointed to perform on behalf of the principal (C) he should not be allowed to
work with the principal (D) in case they have conflicting interests. However, if a given agent can
be able to disclose the principals' interests for the two parties and act for both of the principals to

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get the consent of all the principals, an agent will be in the position to act for all the two
principals. For example, a business agent who can be in the position to act for purchaser and
vendor in selling products should be accepted to perform for all the two principals (Yegon et al,
2014).
Last, Common laws should be implemented to ensure that agents make profits on behalf
of the principals. These laws will help the principals to obtain benefits without inputting in his
knowledge but instead, use agents. Generally, such profits are regarded as "secret profits"
because they are not restricted to income but they may involve other items with value such as
club membership, interest-free loan and many others. In addition, the laws should permit agents
with secret profits to be liable to the principal's account for those profits on top of the other
remedies that are available for agents of the principal. In this case, secret profits involve property
use, position use, and the use of knowledge or information (Josh et al, 2016). The implemented
laws should aim at ensuring that agents should not individually use the knowledge or information
that they have acquired from the principals to discover or collect data for their individual gains.
For example, if an agent is working on behalf of the vendor, he should look for the business
investment that is in line with the principal's, not his own interests. In case, an agent makes an
investment minus alerting the principals or which is not in line with the interests of the principal,
this should be considered as "a breach of his fiduciary duty not to make a secret profit"
(Wellalage, & Locke, 2011).
e. What does agency theory suggest about how to compensate executives?
Agency theory places much of its concentration on the wide goals and interests of
organization stakeholders concerning the mode of compensating employees so that the interest
can be aligned with the goals. Differently from the previous years where the organization

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managers and owners were almost similar, in the current organizations the management and
ownership are different things. In addition, the theory indicates that something that may be
considered to be best by an organization's owner may not be regarded best by the manager in
relation to his interests. The theory indicates that agent costs may be in the form of money that is
wasted by an organization manager to build an empire instead of the maximizing wealth of the
stakeholder (Sekaran, & Bougie, 2010). Agency theory indicates that organization managers may
decide to take fewer risks in making payments but much of their focus on the salary base but less
on uncertain bonuses and incentives. The agency theory also focusses on non-manager's
compensation. In this scenario, different interests may arise between employees and managers.
The theory indicates that the managers of an organization should be in the position to introduce
scheme best on contracts in order to assist in creating a gap between the interests of the managers
and the employees. The theory indicates that when compensating executives, much focus should
be put on various pay practices such as payment form, cash compensation benefits, pay structure,
mix, and administration. The Agency theory asserts that by using such practices, the organization
will be in the position to avoid agency costs in executive compensation (Zakari, & Menacere,
2012).
Question two
a. Read the paper and explain what research method is adopted in that study.
The paper by Rahid (2011) about "the corporate governance practices of a less developed
country" aimed at presenting a detailed analysis, process, and development of the "current
corporate governance practices in Bangladesh". The research method that was used by the author
was based on "New Institutional Sociology (NIS)". The research method was considered to be a
theoretical method which used archival data. In addition, the research method illustrates the role

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played by the major institutional forces to ensure that they reinforce the current corporate
government activities in the county (Ruhnke, & Schmidt, 2014).
b. Explain how institutional theory (or Neo Institutional Sociology) may help to
improve the accounting practice.
Rashid (2011) indicates that an area where management accounting is done certainly
looks to change with an advance in technology, increased competitive markets, different
structures of organizations, new organization practices. Currently, less attention has been made
to understand how institutional theory help in illustrating management accounting with the help
of the new systems. For researchers to better understand changes in regards to accounting
management, neoclassical theory can not effective answers this concern but instead, institutional
theory can be better. The institutional theory is made up of various theoretical constructs mainly
from political, sociological and economic science (Omane, 2009). The major three fundamental
currents of the theory are "Old Institutional Economics (VEI), the New Institutional Economics
(NEI) and the New Institutional Sociology (NSI)". The institutional theory illustrates that the
management accounting process is a major determinant of understanding the accounting studies
to explore accounting techniques, systems and the role played by accounting. The theory
illustrates the understanding of people about management accounting in the form of
socioeconomic situations by suggesting that people are shaped by situations as well as situations
are also shaped by people. An institutional theory helps in understanding management
accounting practices as social processes whose study analyses the relationship of social values
and economic actions (Masoud, 2016).
c. Referring to page 26, how does Rashid (2011) use Gary (1988, p. 8), review of
accounting literature linking culture with accounting values?

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Considering page 26 of " Corporate governance in Bangladesh: a quest for the
accountability, legitimacy crisis" by Rahid (2011), illustrates that accounting is influenced by
culture. In relation to the Gary (1988, p.8), Rahid (2011) indicates that societal values result from
the result into maintenance and development of institutions that are in a given society that is to
say political, educational and social systems. Also, the literature indicates that once these items
are put in place, they will reinforce and reflect societal norms. Also, Rahid (2011) incorporated
accounting by illustrating ways of how accounting activities might reinforce and influence
societal values. Rashid's literature presents the societal norms at accounting subcultural levels. In
this case, it is understood that societal or cultural values at a country level depend on occupation
subcultures that is to say profession with a high level of integration. Also, Rahid (2011) indicates
that the system values of accountants originate from cultural values with major evidence from
work-related values. In turn accounting values influence various accounting practices such as
disclosure and reporting of information. Therefore, the literature indicates that "depending on the
varying degrees of external and ecological forces shaping societal values, different accounting
systems develop, reflect, and reinforce these values" (Masoud, 2014).
Question three
While conducting research, there are various typologies used for identifying and
classifying various categories of "mixed method" approaches that researchers adopt in their study
proposals. In this case, Creswell (2014) identified various classification systems which were
drawn from different fields such as public health, education, and policy, behavioral and social
research, evaluation and nursing. In different classifications, authors were in the position to use
broad terms for their research. Uisng Creswell's (2014) classifications of mixed methods, the
following studies identified the study in the following ways,

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a. Using Creswell's (2014) classifications of mixed methods (an extract is under module
6), identify and explain the type of mixed method study that was used by Masoud
(2017).
Consinering Creswell's (2014) classifications of mixed methods, the identified type of
mixed method use by Weal and Saleh (2018) was "Convergent Parallel Mixed Method Design."
in most cases, researchers use this kind of mixed method with advanced and basic strategies of
mixed methods. Most of the new researchers opt for this mixed method because they always
think that it is combined with both qualitative and quantitative data. Using this approach, the
researchers collect both qualitative and quantitative data, carry out an analysis of both data
differently, and then make a comparison of the results obtained from the data and identify
whether the findings disconfirm or confirm each other. The major assumption of the mixed
method is that all the data provided by both quantitative and qualitative methods illustrate
different information. The method builds on the historical nature of the multitrait and
multimethod idea (Cai et al, 2015). The method indicates that data qualitative data assume
various forms such as documents, records, obserbvations, and interviews. In this method of
research, it is always very challenging for researches to merge or converge data from various
sources making data analysis improper. Using this mixed-method, the interpretation of data is
usually written in the study's discussion section. Also, the validity of data in the convergent
design should be done by focusing on both qualitative validity (for example triangulation) and
quantitative validity (for example Construct) for every database (Masoud, 2014).
b. Using Creswell's (2014) classifications of mixed methods (an extract is under module
6), identify and explain the type of mixed method study that was used by Weal and
Saleh (2018).

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using Crewell's (2014) classification of mixed methods, the identified type of mixed
method study by Wea;l and Saleh (2018) is "exploratory Sequential Mixed Methods Design."
This design involves reserving the "exploratory sequential approach" and begin with a qualitative
stage which is then followed by a quantitative stage. This mixed method is a form of design
where the researcher starts his study by using qualitative data to analyze his information and uses
the results obtained in the qualitative approach. The aim of using exploratory sequential
approach is to form improved measurements using given sample population and identify if the
data obtained from some people (in qualitative stage) can easily be generalized a bigger
population sample (in quantitative stage). For example "the researcher would first collect focus
group data, analyze the results, develop an instrument based on the results, and then administer it
to a sample of a population. In this case, there may not be adequate instruments measuring the
concepts with the sample that the investigator wishes to study" (Tate et al, 2010). In the
exploratory sequential approach, the collection of data would happen in two major stages with
the current qualitative phase followed by a quantitative phase. However, a bigger challenge
arises on how to use data from the first stage in the 2nd stage. In the exploratory sequential
approach, data analysis is done separately on two major databases and the used findings are
obtained from the first exploratory database in order to come up with quantitative measures. Data
interpretation for both methods is performed in the study's discussion section. Also, researchers
using the approach are required to check for qualitative data's validity and also the quantitative
data's scores (Almalhuf, 2009).
c. What are the advantages and disadvantages of current research to use existing
questionnaires from prior studies?

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In conducting the analysis of data, researchers usually use questionnaires to gain insight
into the existing data. In the approach of using questionnaires, researchers usually have a
question and hypothesis in their mind and look for the appropriate datasets to solve the problem.
In the current research, there are various advantages and disadvantages of using existing
questionnaires from Weal and Saleh (2018), and Masuad (2017) studies.
Advantages
Low costs, usually, it is always cost effective to use existing questionnaires to carry out
research instead of using new questionnaires. In most cases, there is always a fee paid to gain
access to different datasets, but this is always a small proportion of as compared to using new
questionnaires for the study. In addition, using existing questionnaires in the current research
helps in minimizing cots involved in designing and processing the questionnaires (Agbara,
2011).
The use of existing questionnaires for the current resa5rch helps the researchers to obtain
large amounts of data collected from the researcher. This helps in minimizing the time wasted in
formulating new questionnaires for the current research. Instead of researchers spending much of
their time designing and processing new questionnaires, the use it to test the research hypothesis
and finding the appropriate research approaches (Almalhuf, 2009).
Disadvantages
In most cases, the existing questionnaires are not in line with the data of the current
research. This happens if the current research has different objectives and hypothesis from those
of the existing research. It is always very difficult to find both of the research with common
important variables available for data analysis. Therefore, if the current research has different

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objectives from those of the existing questionnaires, the researchers may not be in the position to
accurately obtain data or information concerning that study (Masoud, 2017).
Using existing questionaries for the current research may create unawareness in the study
glitches or nuances in the process of collecting data. In this case, the researchers analyzing the
existing information are usually not the same people who are involved in collecting data
resulting in miss interpretation of data. In most cases, researchers are advised to sue the current
questionnaires which they understand very well as compared to existing questionnaires (Rashid,
2011).
d. (I). How were the participants selected and was it an appropriate method?
For Weal and Saleh's (2018) study, participants were selected with the help of
"nonprobability sampling methods" that is to say snowball sampling and convenience sampling.
Using the methods, the res4sarchersc were in the position to interview twenty students from
Wintec. I think this method was appropriate because it helped the researchers to get the right
respondent or participant who could be in the position to illustrate the existing gap in accounting
students in the school of Wintec (Weal, & Saleh, 2018).
(ii). Were the number of participants interviewed appropriate? If so, why do you
believe this is an appropriate number, and if not, how many interviewees would
have improved the rigor?
The number of the participants was not appropriate as compared to the need for the study.
In this case, the study was aiming at "exploring the expectation gap's existence among
accounting students" and the research would have covered a bigger number of accounting
students so as to obtain enough data for the study. In addition, the chosen 20 participants would

ACCOUNTING 13
not help the researchers to obtain all the information from the researcher meaning that a bigger
number would be better in this case. Considerably, at least a number of thirty to thirty-five
participants would have improved the rigor (Arthur, 2017).
(iii). What is your opinion about how the qualitative data analysis was written up
and how might it be improved?
The qualitative analysis of data was written up very well because it was done using an
approach of mixed methods. With the help of the sequential exploratory approach, the study
results were appropriately obtained. In addition, the analysis of data clearly explored the topic of
the study. Also, the qualitative data analysis provided more information or in-depth answers to
all the study questions. The qualitative data analysis for Weal and Saleh's study might be
improved by paying much attention to various steps involved in analysis data while using the
qualitative method. This might help the researchers to understand the findings that they could be
in the position to add on (Agbara, 2011).
e. How do Masoud (2017) and Weal and Saleh (2018) go about analyzing the data
derived from the quantitative parts of their studies? Do you believe one study uses a
more rigorous approach than the other? Explain why one study uses a superior
approach
While analyzing the data obtained from the quantitative parties of the study, Masoud
(2011) used inferential and descriptive statistics methods to answer the study questions. Using
the quantitative methods, the research distributed various questionnaires to the respondents.
Using the questionnaires, useful responses were obtained from various interest groups that is to
say; audit beneficiaries, aauditees, and auditors. The overall useful responses amounted to 44

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percent. In addition, the rate of expenses was over 32.2 percent. On the other hand, Weal and
Saleh (2018) were analyzed using a strategic approach which helped in explaining the results
obtained from the quantitative analysis. By using quantitative data analysis, the researchers were
in the position ton research all the information which was considered as correct to the study
question. In this case, the "researcher made use of "auditing paper's tex" included in the
questionnaire by ensuring that all the answers were coordinating with what was taught to the
students. Further, the researcher then made an analysis of the answers included in the
questionnaires in order to understand whether they were right or wrong to illustrate quantitative
data (Adeyemi, & Uadiale, 2011)
Considering the research of the two studies, i believe that Weal and Saleh's (2018) study
uses a more rigorous approach as compared to Masoud (2017). In this case, i believe that one
study uses a superior approach compared to another because in Weal and Saleh's(2018) study the
researcher was in the position to answer the study questions appropriately in a numerical way. In
addition, the approach used gave the researcher a chance to analyze his data in a more
explorative manner as compared to Masoud's (2017) study. Therefore, while using the approach
the researcher in Weal and Saleh's (2018) study was in the position to "find out if a gap existed in
Wintec accounting students and how education affects this gap" (Agbara, 2011).

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