A Comment on the Application of Grounded Theory to Accounting Research

Philip H. Siegel, Fiesta Mart Chair of Accounting

University of Houston-Downtown

Recently accounting researchers have begun to explore and apply grounded research to behaviorally based problems (c.f. Blank et al. 1991; Siegel et al. 1994). Grounded theory is a qualitative approach which can be used to analyze social processes that are present within human interactions. Application of the theory results in explanations of important social processes or structures that are derived (grounded) in the empirical data.

The grounded theory approach is based on the idea that a group or groups share specific social psychological problems that are not necessarily articulated (Glaser and Strauss 1967). Grounded theory is a form of field-studies that systematically applies procedural steps to develop an exploration about a particular phenomenon. As Strauss and Corbin (1990) explain:

The objective of grounded theory is the discovery of theoretically comprehensive explanations about particular phenomenon. The techniques and analytical procedures enable investigators to develop a substantive theory that is significant, theory-observation compatible, generalizable, reproducible and rigorous.

Grounded theory methodology is both deductive and inductive. Inductively, theory emerges from observations and generated data. This theory can then be empirically tested to develop forecasts or predictions from general principles.

The need for additional middle-range theories in accounting research that can be empirically tested is an important reason for using grounded theory to investigate phenomenon important to accountants. Accounting behavior occurs in a natural rather than a controlled setting. The accounting process requires constant comparison of collected and coded data, hypothesis generation, use of literature as data and compilation of additional data to certify or reject hypotheses.

The grounded theory presents theory which is substantiated by data from field notes. The research results provide an idea where the data came from, how the data were rendered and how concepts were integrated. Applied to both accounting research and to the profession of accounting grounded theory can increase middle-range substantive-theories and help explain theoretical gaps between theory, research and practice.


Blank, M., P. Siegel, and J. Rigsby. 1991. Determinants of International CPA Accounting Students. British Accounting Review: 281-300.

Glaser, B., and A. Strauss 1967. The Discovery of Grounded Theory. Chicago: Aldine.

Siegel, P., M. Shelton, and K. Omer. 1994. The Mentoring Relationship Within a Regional Public Accounting Firm. Journal of Business and Entrepreneurship 6 (i): 71-88.

Strauss, A., and J. Corbin. 1990. Basics of Qualitative Research. Newbury Park, Ca: Sage.