Measurement: Scientific Method and Measurement Essay

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Question 1
Definition of measurement in science:
Measurement is of great importance because quantitative information can convey more precise and meaningful information than qualitative information. Through the process of measurement and mathematical operations scientists are able to distinguish objects and properties, and establish a relationship between them with a high degree of accuracy.
One of the earliest formulation of measurement was made by Norman Campbell, who defined measurement as the “assignment of numerals to represent properties of material systems...” (Godfrey, J.,Hodgson, A., Tarca, A., Hamilton, J., & Holmes, S., 2010, p. 134).
Measurement from Campbell’s perspective means capturing underlying properties of systems according to natural law. According to Campbell measurement is based on an empirically tested theory.
Stevens’s scientific measurement definition, ‘assignment of numerals to objects of events according to any rule’, (Godfrey et al., 2010, p. 134) is less rigorous than Campbell’s. According to Stevens, the theory is not critical for the measurement to take place. Therefore, to meet his definition, it is not necessary that the alignment of the numbers and the property that it is intended to catch is empirically tested.
Campbell recognised two types of measurements: fundamental and derived. His stringent classification of measurement was expanded on by Torgerson who added a third kind of measurement namely Fiat measurement which is not based on confirmed theories. It is a system by which arbitrary definitions are used to relate the variables to concepts.
Stevens proposed his four classes of scales, namely: nominal, ordinal, interval and ratio, which are defined by groups of mathematical operations that are permissible for the different type of scales. To test a theory, measurements need to be reliable and accurate. However, any observation may be composed of some errors, which will degrade reliability.
Accounting measurement:
According to the Conceptual Framework (“Framework”), measurement in accounting means the process by which only transactions that are capable of being measured in monetary terms are to be recognised and carried in the balance sheet and income statements. (Australian Accounting Standards Board [AASB], 2009, para 99).
Measurement in accounting is a process followed by accountants which can involve calculations, estimation and apportionments. Accountants must comply with Australian Accounting Standards.
Key measurement approaches includes historical cost, current cost and replacement cost, fair value, net present value and deprival value. There is no agreement and no guidance from Framework of what measurement bases to use. Accountants must select the most appropriate accounting measurement method to provide useful accounting information to users of financial reporting. The Framework identifies decision usefulness as the primary objective of financial reporting and identifies users of financial reporting to be current and potential investors, lenders and other creditors.

Similarities and differences:
According to Campbell’s definition of measurement, accounting is not a measurement, because there is not an empirical theory that can support accounting measurement. However, to justify the term measurement in accounting, social scientists formulated the concept of fiat measurement,
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