Presenting a Model for Narrative Accounting: An Action Research Approach

Presenting a Model for Narrative Accounting: An Action Research Approach



Abstract

Objective: With the paradigmatic changes of accounting knowledge in the last century and the acceptance of social structuralism approaches in this field, today the nature of accounting is moving from the mere quantitative reference of financial reports to cover the qualitative aspects of information disclosure. Narrative accounting is considered as a strategic approach in the new paradigms of accounting knowledge, which aims to strengthen the functions of comprehensive financial information disclosure for developing stakeholders. Narrative accounting is considered as one of the most emanating paradigm changes in accounting knowledge, which was actually a reaction to the vacuum caused by the positivist approach in classical accounting with the perceptual realities of external decision makers. Therefore, since the accounting philosophy based on the classical and objectivist approach was only looking for quantitative reporting, the use of narrative process in this field with the aim of linking theory and practice emerged to provide a more attention-worthy answer to the expectations arising from social contexts. In other words, narrative accounting creates a more interactive environment for accounting with stakeholders and can greatly reduce the conflict of interests between companies and stakeholders. In fact, narrative accounting can be considered as a level of representation of interactive knowledge and accounting relations with stakeholders, which have arisen by changing the accounting paradigm from classic to modern approaches in this profession and seek to create value for stakeholders. The purpose of this research is narrative accounting bedding through action research for cognitive classification in capital market companies.

Methods: This methodological process is called action research, which seeks to cognitively categorize it for implementation by connecting the qualitative aspects of identifying propositions related to the phenomenon under investigation. In this method, which is also called the type of analytical pragmatism, researchers simply conduct interviews and open coding in order to identify propositions, so that different aspects of the concept of narrative accounting can be phenomenologically studied in this section. In the quantitative part, as a cognitive classification process, the research, by forming a focus group, contextualizes and separates the identified propositions and determines in which category each of the propositions can be placed in the category related to the phenomenon of narrative accounting. Therefore, in order to follow the path of analysis in this research, it is necessary to create scored questionnaires in order to determine in which category the experience and knowledge of the focal group places each proposition through the wiremax technique. The formation of the focus group meetings takes place during three stages of conceptualization, exchange, and content recognition, so that it is possible to assign the points of each participant to the propositions for the classification of the concept of narrative accounting. Therefore, this study is considered developmental in terms of results, and exploratory in terms of purpose, based on the nature of conducting interviews to identify emerging propositions of narrative accounting. In terms of the mixed nature of data collection, as mentioned, this study is considered a mixed study, so that in the qualitative part, in order to conceptualize the phenomenon under investigation, data is collected from interviews with experts, and in the quantitative part, through Q questionnaire score data and analysis. Wiremax, it is determined in which category the propositions are classified.

Results: with the aim of achieving validity, matching between similar researches was done to provide the possibility of entering the statements identified in the Q analysis model for the cognitive classification of this phenomenon in the context of capital market companies. In the following, by forming a focus group to determine the cognitive categories of the examined concept, during four sessions and by creating a Q evaluation checklist from +5 to -5 in 28 houses according to the identified propositions, the necessary action was taken and they were asked to understand the problem to place each proposition in one of the 28 houses of Q's evaluation checklist. Then, through the Wiremax matrix, cognitive classes were determined regarding the separation of narrative accounting propositions, and the results indicated the existence of 4 cognitive classes regarding the foundation of narrative accounting at the level of capital market companies.

Conclusion: Based on 4 levels in the foundation of narrative accounting as an action research process at the level of capital market companies, it is possible to get a more comprehensive understanding of this phenomenon. Therefore, based on these 4 categories, the categories assigned to each statement will be expanded. The first category as a research measure for the implementation of narrative accounting in the context of capital market companies is the orientations of the reporting language in the narrative of transparent information to the stakeholders in order to improve the level of cognitive awareness and judgment of investors and other users of external information. In this category, the accounting unit focuses on announcing a set of reports that are optional for investors, trying to use the capacities of negative tone to advance their financial strategies in the capital market.

Keywords

Narrative Accounting, Action Research, Focus Group