ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Charities
    5. Coronavirus
    6. Corporate and financial reporting
    7. Business and governance
    8. Ethics
    9. Insolvency
    10. ICAS Research
    11. Pensions
    12. Practice
    13. Public sector
    14. Sustainability
    15. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

A tale of two communities: why the profession and academia need each other

  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Lisa Evans and Mario Abela, ICAS Research Panel

15 April 2019

Main Points:

  • There needs to be a strong relationship of mutual benefit between the academic and professional accounting communities.
  • Academic research is critical to the creation of new knowledge and innovation. It's independent and rigorous and provides important evidence to support policy change.
  • It's an opportunity for practitioners to participate in the development and implementation of policy.

Lisa Evans and Mario Abela, members of the ICAS Research Panel, highlight the benefits of academic research and the importance of liaison between academia and the profession.

The pace of change in business is unprecedented as we enter the fourth industrial revolution. Meanwhile, the accounting profession is being challenged for its:

  • alleged complicity in corporate scandals
  • support of a model that protects the welfare of narrow groups of stakeholders
  • lack of recognition of the intangible nature of modern business activities
  • failure to promote long-term investment.

As a profession, our R&D locker is empty as we have neglected the creation of new knowledge and innovation on a number of fronts, and debates that have been running for decades remain unsolved.

This includes, for example, agreement on what constitutes profit, assets and the divide between debt and equity. Increasingly, policymakers have introduced disclosures in the management report which both preparers and auditors are struggling to make meaningful for capital providers.

Academic research once played an active role in the debates but now finds itself on the periphery.

Rethinking the role of academic research for the profession

In this article, we re-think the role of academic research in helping practitioners understand and respond to the challenges being faced by business today.

What is academic research? How does it differ from, for example, market research, or research associated with consultancy? While there are similarities, and all have their place, certain qualities favour the use of academic research as opposed to non-academic research.

Academic research is typically distinguished not only by its independence but also the rigorous review process it undergoes, and accordingly it is well-equipped to challenge the status quo.

It aims to develop new knowledge and understanding; it is rigorous and impartial and aims to contribute to the development of theory as well as practice.

Because the universities or the researchers themselves carry the largest part of the real cost of research, such research is usually excellent value for money for grant providers.

To be published involves a scrupulous and often lengthy review process, with usually several rounds of revision, and high rejection rates. This process can take time but it serves to ensure the quality and rigour of academic research.

However, unlike research in the natural sciences, accounting research is not well funded. Grants from public bodies are harder to obtain – anecdotally assumed to be the contrary because accounting and finance research should be funded by a wealthy profession.

Grants from professional bodies and similar sources however usually cover only a fraction of the real costs of the research.

Because the universities or the researchers themselves (by working outside ‘normal’ hours) carry the largest part of the real cost of research, such research is usually excellent value for money for grant providers.

High-quality education needs high-quality research

But beyond this simple cost-benefit consideration, why is research of value to a profession – specifically the accountancy profession?

To address this question, we may ask another one: what distinguishes a profession from other forms of occupation, such as trades, industries or crafts?

Among others, one key defining feature of a profession is its foundation on an academic knowledge base. This involves research and teaching, which in turn should be informed by research.

As is also the case for the older, high-status professions of medicine and law, prestige and credibility are founded on high-quality education and on knowledge that goes beyond the technical.

Research, including both applied and basic/theoretical research, are therefore closely linked to the essence of a profession.

If we are to thrive as a profession we need to invest time and resources into understanding practice and developing new knowledge.

Impartiality and rigour

Because accounting research is not and has not been well funded, practitioners have lost the advantages of having a strong foundation in research.

However, from a practitioner’s perspective, academics are trusted third parties who can provide insights by applying rigorous methodology.

Some accounting policy questions require a level of impartiality that cannot be ensured by members of the accounting profession alone. Without such impartiality, politics come into play and make biased evaluations inevitable.

Academics are able to tackle such questions in a way that is independent of vested interests.

Take as an example of the argument that the levels of concentration by the Big Four in the audit market are too high.

Does this result in reduced competition (a likely response by a member of a non-Big Four audit firm) or reflect better technology and audit quality that are not available to smaller audit providers (a common response by members of Big Four auditors)?

Both arguments have some merit, but which group of firms we ask will, to a large degree, determine the answer we get. Academics are able to tackle such questions in a way that is independent of vested interests, so that policy decisions are made on the basis of rigorous and unbiased analyses.

Any potential conflicts (such as funding provided by interested parties) are disclosed.

Embracing research to forge a new path

In spite of this, professional accountants and standard setters are often unsure about using academic research for fear of picking a study that is subsequently undermined by other research.

Professional users may be uncertain of the weight they should attach to different studies.

In addition, articles published in academic accounting journals may be perceived as impenetrable to non-academic readers.

As the state of academic knowledge in accounting and related fields advances, some research will inevitably involve technical, conceptual and/or mathematical analyses.

Like accounting treatments for complex activities or transactions, these can be inherently difficult to communicate to all users.

Academic research is the profession’s R&D locker, where myths can be dispelled, and given sufficient time and resources, new thinking can emerge.

Nevertheless, there are many reasons to develop and preserve a strong relationship between academic and professional accounting communities.

Interesting and important accounting questions often arise from practical problems, and engagement with research is an opportunity for practitioners to participate in early discussions during the development and implementation of regulation.

Professional accountants can also provide unique and rich access to data that academic researchers cannot obtain by any other means.

Perhaps more important still is the fact that academic research is the profession’s R&D locker, where myths can be dispelled, and given sufficient time and resources, new thinking can emerge.

Raising the bar for practitioners

We can continue to point out the differences between practitioners and academics and perpetuate the pervasive view that accounting research is of marginal interest to practitioners.

Alternatively, we can step away from decades of analysing the ‘problem’ and push forward to working out the solutions by raising the bar and getting serious about the profession’s need for research and development.

In summary, the research-practice gap has been much discussed for decades and is attributed to incentive systems for research, a communication gap, a perceived irrelevance of some academic research, and a concern that accounting research takes too long.

In spite of this, academic accounting research continues to make useful contributions to policy and practice, and there is unquestionably scope to develop and preserve a stronger relationship between academic and professional accounting communities.

In fact, rarely has there been a better time for the two communities to work together.


Readers interested in a more extensive discussion of the issues covered in this article are referred to:

Fulbier, R.U., HITZ, J. and Sellhorn, T., 2009. Relevance of academic research and researchers' role in the IASB's financial reporting standard setting. Abacus, 45(4), pp.455-492.

Leuz, C., 2018. Evidence-based policymaking: promise, challenges and opportunities for accounting and financial markets research. Accounting and Business Research, 48(5), pp.582-608

McLaren, M., 2018. 'Evidence-based policy-making': a practitioner view. Accounting and Business Research, 48(5), pp.609-611.

Papers in the 2012 Special Issue on the Effect of Accounting Standards, Accounting in Europe, 9(2).

2-23-marsh 2-23-marsh
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: