Welcome to
AAA-Deloitte-J. Michael Cook
Doctoral Consortium
Shyam Sunder
Yale University
AAA Doctoral Consortium
Lake Tahoe, June 13-17, 2007
An Overview
• What I got from the Doctoral Consortium
• How you could get the most from
investment of your four days
• Scope of accounting research
• Theories, facts and their relationship
• Science, social science and humanities
• Posing a research question
• AAA, Imagination and Chicago meetings
Salt Lake City, 1972
• There are interesting questions I had never
thought about
• There are ways of looking at the same
phenomena that never occurred to me
• There are ways of finding answers to questions I
did not even know about
• Research is not a production process (and the
labor theory of value does not apply)
• Each of us is both an essential as well as the
weakest link in our research
Consortium = A Cooperating
Arrangement or Joint Venture
• To explore ideas new to you
• To develop explanations that may not have occurred to
you
• Find ways of sorting ideas and explanations:
– By logical consistency
– By empirical validity
– By boundaries of generalizability
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Cooperate with your colleagues and the faculty
Establish intellectual links with your cohort
Keep and open mind but listen critically
Don’t be afraid to challenge or disagree but not just for
the sake of disagreeing
A Question from Mom
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What do you do for a living?
Teaching would satisfy her, but would not be entirely true
Fortunately, she never asked.
But two colleagues did, a sociologist and a physicist
What do you do in accounting research?
I could not give them the answer for Mom; they know
better
• I managed to answer their questions to their apparent
satisfaction (assuming they were not just being polite)
Perspectives, Organizations and
Accounting Forms
Perspective
Organization
form
Classical
Entrepreneurial Bookkeeping
without
hierarchy
Entrepreneurial Managerial
with hierarchy
Stewardship
Capital markets Publicly traded
Accounting
form
Financial
Inclusivity of Accounting Forms
Bookkeeping
Managerial
Financial
Firm as a Set of Contracts
among Agents
Governmen
t
Shareholder
s
Auditors
Creditor
s
Employees
Vendors
Customers
To the Physicist
• The measurement angle
• Walked him through the problem of
measurement of his personal wealth
• After counting the contents of his wallet, he was
not sure how to proceed to the next step
• Then scaled the problem up to an organization
of many people and activities
• He could see the difficulty, or at least did not
pursue the matter further
But Most People Have No Idea of
What We Do
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History
Measurement
Technology of accounting
Aggregation
Governance
Contracts and organizational engineering
Wealth creation
Social organization (national budget, bank supervision)
Standards and competition
Could we invite our colleagues into the accounting house
of research and show them interesting stuff we do?
• The Doctoral Consortium is an opportunity to look at our
collective whole, and be inspired to extend the
boundaries
Our Challenges
• Dealing with two Kinds of Interplay
– Between data and theory
– Between laws of nature and human beings
Theory and Data
• The extent of separation between theory and data, often
presumed, is limited
• The two are so closely intertwined that settling on their
primacy is like figuring out whether the chicken or the
egg came first
• Even the most abstract theorists are motivated by
observation of the world
• Even the most hard-headed empiricist is driven by the
logical structure of an explicit or implicit theory
• In search for a way to deal with self-selection problems, I
turned to experiments
• And found yet new problems
Testing Theories with Data
• All theories are based on many assumptions
• Assumptions can be divided in to core and
convenience assumptions
• Convenience assumptions are made so we can
use analytical instruments to solve complex
problems
• Empirical testing (weather data from the field or
lab) are designed to assess the robustness of
theoretical results as we weaken the
assumptions of convenience
Figure 1.
Single Theory Experiment
Percent Correspondence between the Data and Theory
Prediction
100%
B
C
A
0
0
Distance between the Model and the Data Environments
Sciences, Humanities and Social
Sciences
• Science: identify laws of nature (eternal,
applicable everywhere)
• Humanities: Each of us is unique and special,
with free will and responsible for our actions
(literature, eternal truths, but no eternal laws)
• Social science: stands uncertainly between
sciences and humanities
• Are there eternal laws that govern our behavior
as individuals, or do we have free will
• This basic conflict of social sciences remains
unresolved
Three Levels of Analysis
• Individual behavior (psychology and social
psychology)
• Aggregate behavior (economics and
sociology)
• Agent-based models to discover
relationships between these two worlds
• Jon Davis talk on Agent-based models
Posing A Research Question
• What is the question you would like to have answered after the
experiment? (A question is a single sentence with a question mark
at the end.)
• What do you know already about the possible answers to the above
question ?
• What are the various possible ways of finding an answer to the
above question?
• What are the advantages and disadvantages of each method?
• How important is this question to YOU? What are the chances that
the answer you get from the research will surprise you or others?
What are the chances that it will change someone’s mind?
• How would you conduct your research? (write down a design and
plan)
• Is your design the simplest possible design to help answer the
above question?
• What are the possible outcomes of research? Do the possible
outcomes include at least one outcome that will answer the question
you stated above? What is the chance that you will observe this
outcome?
• Iterate as necessary
AAA Update
– Intellectual Property Task Force
– Global Accounting Digital Archive
– New Electronic Journal: Current Issues in
Auditing
– Imagined World of Accounting: Program for
Chicago Annual Meetings
Intellectual Property Task Force
• Development of new information and communications
technologies (ICT) has shifted the economics of
intellectual property. As with other academic associations,
production of intellectual property has been a major
activity of AAA. The Intellectual Property Task Force will
examine the technological, economic, financial,
organizational, competitive, and intellectual
consequences of the changes in ICT for AAA, and
recommend any changes to the Executive Committee,
the Council and the membership of the AAA with respect
to its financial structure, publications, organization, and
other relevant actions.
Global Accounting Digital Archive
• Data availability, structure, depth, accessibility and cost
are critical to accounting research to support basic,
applied and practice research. Given new data
technologies, there is an opportunity to develop a
decentralized, global, cooperative, organized effort to
make accounting literature and archives (noncopyrighted or copyright expired or released) readily,
instantly and globally available to researchers to
stimulate and support accounting as well as business
research. Leading professional and academic
accounting associations, forming a sponsoring coalition
to create this public good, will serve as the catalysts to
establish a unique resource on Internet which is unlikely
to come into existence otherwise.
Imagined Worlds of
Accounting
Some Highlights of the Chicago
AAA Program
August 6-8, 2007
Plenary Addresses
• The Origin of Accounting
– Denise Schmandt-Besserat, Professor Emerita of Art and Middle
Eastern Studies, University of Texas at Austin (Archeology)
• Culture and the Nature of Human Sociality
– Joseph Henrich, Professor of Culture, Cognition and Evolution,
University of British Columbia (Anthropology)
• Accounting, Law and Social Norms.
– Michael Hechter, Professor of Global Studies, Arizona State
University (Sociology)
– Eric Posner, Professor Law, University of Chicago
• Data and Economic Growth
– Robert E. Lucas, Jr., University of Chicago, Nobel Laureate
• Hayek and Experiment
– Vernon L. Smith, George Mason University, Nobel Laureate
Plenary Speakers
• Tuesday Lunch: John Dickhaut, University
of Minnesota, AAA Presidential Scholar,
2007
• Wednesday Lunch: Gary J. Previts,
incoming President of the American
Accounting Association
Follow-up Sessions on Plenaries
• Accounting, Anthropology and Archeology
– Basu, Goetzmann, and Waymire
• Accounting and Social Norms
– Paul Fischer and Mark Penno
• Accounting and the Macroeconomy
– Kanodia and Dye
• Hayek, Accounting and Experiment
– Bloomfield
At Large Sessions
• Europe Meets America: Diverse Research
Perspectives
– Biondi (France), Suzuki (UK), Lukka (Finland)
• History of Accounting Scholarship
– Pierre Liang, George Sorter
• A Proposed Accounting Curriculum
– Demski and Fellingham
• Big Unanswered Questions in Accounting
– Ball, Fukui, Huddart, Nagar
At Large Sessions
• Financial Literacy: Programs and
Response
– Previts
• Point-Counterpoint 1
– Benston, Linsmeier on fair value accounting
• Point-Counterpoint 2
– Lynn Turner and Larry Ribstein on SOX
• Data Mining and Accounting
– Srivastava
At Large Sessions
• Building Accounting Archives
– Tonya Flesher
• SEC Regulation Update
– Glover, Jorgensen, Taub
• Global Accounting Digital Archives Project
– Vasarhelyi
• FASB Research Initiative
– Bloomfield, Linsmeier
At Large Sessions
• Accounting and Neuroscience
– John Dickhaut
• Alternative formats for Accounting Journals
– Tony Tinker
• World Market for Accounting PhDs
– Christensen, Banerjee, Wong, and Lukka
• Academic and Professional Qualifications
– Jack Wilkerson
• Fiscal Wake Up Call for US
– David Walker, Controller General of the US
Wednesday Afternoon Raffle
• Exciting sessions for Wednesday
afternoon
• Attendance in each session on
Wednesday afternoon (after lunch) earns
you a raffle ticket
• At the end of the last session on
Wednesday, we draw the winner of the
raffle (must be present to win)
• Prize?
Greg Waymire and the Program
Committee are hard at work on
developing an exciting program
for the Chicago meetings
As more parts of the program are
finalized, watch for details from
Tracey and her colleagues!
Finally
• In PhD programs, faculty ask you to read the
stuff they wrote, and test you
• Awareness of the advantage grey hairs have
over the youth are drilled in—we know, you
don’t.
• What is kept hidden from you is your advantage
over the older folks
• Your advantage: we know, you don’t
• You have a clean slate to generate new ideas,
perspectives, problems, methods, and solutions
History of Scholarship and
Creativity
• Long history of extraordinary creative
achievements of the young
• Do not underestimate your own ability to
transform our discipline—any discipline?
• Cooper’s dissertation was rejected
• Ball and Brown was pre-dissertation research
• Look at music: Presley, The Beatles, Led
Zeppelin, U2, Nirvana and many others
• How old were these folks at the peak of
creativity
Fresh Perspectives are Resisted,
even Ridiculed
• People are skeptical of new ideas because most
of them turn out to be wrong
• When they are right, they create problems for
the establishment
• If you have a good new idea, expect resistance
(faculty, editors, referees)
• Should you yield to their demands or fight?
• How you decide to answer that question will
determine whether research is fun or a chore
• Remember the risk return trade off
What is the Difference between a
researcher and a government
bond?
See You in Chicago!
And do not forget to become a
member of AAA
Why?
Thank You and welcome again to this
37th Consortium
www.som.yale.edu\faculty\sunder
Shyam.sunder@yale.edu