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Important Issues in Statistical Testing and Recommended Improvements in Accounting Research

Author

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  • Thomas R. Dyckman

    (Accounting Department, Cornell University, Ithaca, NY 14850, USA)

  • Stephen A. Zeff

    (Accounting Department, Rice University, Houston, TX 77005, USA)

Abstract

A great deal of the accounting research published in recent years has involved statistical tests. Our paper proposes improvements to both the quality and execution of such research. We address the following limitations in current research that appear to us to be ignored or used inappropriately: (1) unaddressed situational effects resulting from model limitations and what has been referred to as “data carpentry,” (2) limitations and alternatives to winsorizing, (3) necessary improvements to relying on a study’s calculated “ p -values” instead of on the economic or behavioral importance of the results, and (4) the information loss incurred by under-valuing what can and cannot be learned from replications.

Suggested Citation

  • Thomas R. Dyckman & Stephen A. Zeff, 2019. "Important Issues in Statistical Testing and Recommended Improvements in Accounting Research," Econometrics, MDPI, vol. 7(2), pages 1-11, May.
    • Handle: RePEc:gam:jecnmx:v:7:y:2019:i:2:p:18-:d:229157
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    References listed on IDEAS

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    13. Thomas R. Dyckman & Stephen A. Zeff, 2015. "Accounting Research: Past, Present, and Future," Abacus, Accounting Foundation, University of Sydney, vol. 51(4), pages 511-524, December.
    14. James A. Ohlson, 2015. "Accounting Research and Common Sense," Abacus, Accounting Foundation, University of Sydney, vol. 51(4), pages 525-535, December.
    15. Jae H. Kim & Kamran Ahmed & Philip Inyeob Ji, 2018. "Significance Testing in Accounting Research: A Critical Evaluation Based on Evidence," Abacus, Accounting Foundation, University of Sydney, vol. 54(4), pages 524-546, December.
    16. Ronald L. Wasserstein & Allen L. Schirm & Nicole A. Lazar, 2019. "Moving to a World Beyond “p," The American Statistician, Taylor & Francis Journals, vol. 73(S1), pages 1-19, March.
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    2. Johnstone, David, 2022. "Accounting research and the significance test crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 89(C).

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