Accounting

The Simon School Ph.D. Program in Accounting provides students with the opportunity to make substantive contributions to the literature by taking advantage of the Simon School’s strong economics and quantitative training. At the University of Rochester, Accounting is not viewed as a separate academic discipline, but rather is perceived as an integral part of applied economics. By studying accounting and accounting phenomena, the researcher can provide evidence that potentially affects such diverse areas as the theory of the firm (e.g., questions of centralization/decentralization, alternative organizations forms like corporations versus partnerships, and motivation and control issues), the theory of regulation, and capital market efficiency. Evidence of accounting phenomena can, therefore, have implications that extend beyond accounting and into management and social science in general.

The First Year: Foundation

The first year is designed to give students solid training in microeconomics and econometrics and to introduce them to the basic issues in accounting and finance. The Accounting and Finance Seminars introduce students to the current research topics. The first year culminates with the Core Exam given in June. A research oriented First-Year Paper is due by November 15th of the second year.
 

Fall Quarter	AEC 511 Advanced Price Theory IFIN 505 Th. of Finance
Winter Quarter	AEC 512 Advanced Price Theory II MSM522 Optimization FIN 532 Adv. Topics in Cap. Mkts.
Spring Quarter	AEC 513 Advanced Price Theory III STR 403 Economic Theory of Organizations ACC 401 Corporate Financial Accounting or FIN402 Capital Budgeting and Corporate Objectives
Fall Semester	ECO 483/484 (2 hrs. each) Intro Math Stats/EconometricsMTH 265H (4 hrs.) Real Analysis
Spring Semester	ECO 485 (4 hrs.) Econometrics

First Year Paper:

The first-year paper is designed to expose students to and to get students thinking about accounting research early in their Ph.D. program. First year papers can be a significant extension of the research question underlying the replication and update required by ACC 501 or an attempt to identify and investigate and original research question. The first year paper is due by November 15th of the second year and must be presented in a workshop forum such as ACC 501 or AEC 510.

The Second Year: Depth

In the second year, students are expected to take Ph.D.-level courses in Accounting, Competitive and Organizational Strategy, and Finance. In addition, participation in Accounting, Finance, and Applied Economics Seminars is required. This training prepares them for the Qualifying Exam in June.

The Second-Year Paper signals a move from course work to active research.  The second-year paper should make an original contribution to accounting literature and sometimes forms the basis for students theses. The second year paper is due by November 15 of the third year and must be presented in a workshop forum such as ACC 501 and AEC 510.
 

Fall Quarter	ACC 510 Accounting Research I ACC 423 Financial Accounting IFIN 511*# Advanced Financial Economics (alternates with FIN 533)
Winter Quarter	ACC 411 Financial Statement Analysis ACC 511 Accounting Research II ACC 424 Financial Accounting II APS 531 Applied Econometrics
Spring Quarter	ACC 512 Advanced Topics in Accounting FIN 534 Advanced Topics in Corporate Finance
Fall Semester	ECO 475 (4 hrs.) Macroeconomics I
Spring Semester	ECO 476 (4 hrs.) Macroeconomics II

* Two-quarter length (3 hrs.) # Alternates with FIN 533

The Third Year: Breadth

Admission to Candidacy

Upon completing the above requirements, students become Ph.D. Candidates by receiving a recommendation from the Accounting Area Coordinator.

The Fourth Year: Dissertation

Research and writing of a dissertation begins in earnest after completion of the Second-Year Paper. Recent doctoral thesis titles are listed below.

• The Impact of Derivatives on Firm Risk: An Empirical Examination of New Derivative Users
• The Manipulation Content of Accruals and Discretionary Accrual Proxies
• Management-Borne Costs of Fraudulent and Misleading Reporting
• Management-Earnings Forecasts and Insider Trading Activity
• Auditor Resignations: Clientele Effects and Legal Liability
• Financial Analyst Stock Recommendations and Earnings Forecast Revisions
• Impact of Earnings Management Flexibility
• Inside the Accrual Anomaly
• Management Earnings Through the Manipulation of Real Activities that Affect Cash Flow from Operations.

The Accounting Major

The accounting major requires continuous enrollment in ACC 501 and satisfactory performance in ACC 510, ACC 511, ACC 512 and ACC 513. The accounting major also requires satisfactory completion of a first and second year paper and satisfactory performance on the Accounting Qualifying Exam which is given each Summer.

As stated in the ACC 501 course description (see below), first year students must replicate and update an existing paper and present the results in the Winter or Spring Quarter in ACC 501 or AEC 501. The paper to be replicated and updated, as well as the completed project, must be approved by two accounting faculty members.

First year paper: The first-year paper is designed to expose students to and to get students thinking about accounting research early in their PhD program. First-year papers can be a significant extension of the research question underlying the replication and update required by ACC 501 or an attempt to identify and investigate an original research question. The first-year paper is due by November 15 of the second year and must be presented in a workshop forum such as ACC 501 or AEC 501.

Second year paper: The second-year paper signals a move from coursework to original research. Second-year papers should focus on making an original contribution to the accounting literature. Second-year papers sometimes form the basis of a student’s thesis. The second-paper is due by November 15 of the third year and must be presented in a workshop forum such as ACC 501 or AEC 501.
 

The Accounting Minor

The accounting minor is fulfilled by satisfactory performance in both ACC 510 and ACC 511, and either ACC 512 or ACC 513. Minors should complete their three course sequence in a single year by taking ACC 510 (Fall), ACC 511 (Winter) and either ACC 512 or ACC 513 (Spring). The accounting minor also requires satisfactory performance on the Accounting Qualifying Exam which is given each Summer.

Faculty & Research Interests

Charles E. Wasley, Area Coordinator Accounting information in capital markets, management earnings forecasts, voluntary disclosure and security market microstructure, accounting disclosure and stock market return behavior, executive compensation, andcorporate governance.Financial analysts forecasts, capital markets, and earnings analysis.

Joanna Shuang Wu

Jerold L. ZimmermanTheory of the firm, managerial accounting, tax issues in accounting, contracting theory, and managerial compensation research.

Other Simon School faculty with research interests in Accounting include: James A. Brickley, Clifford W. Smith Jr.

Courses & Descriptions

Listed below are titles of M.B.A.-level courses (for descriptions see the Simon Information Guide), and descriptions of Ph.D.-level courses in Accounting.

ACC 401 Corporate Financial Accounting
GBA412Framing and Analyzing Business Problems 2
ACC 411 Financial Statement Analysis
ACC 417 Auditing
ACC 418 Income, Estate, and Gift Tax
ACC 423 Financial Reporting I
ACC 424 Financial Reporting II
ACC 431 International Financial Statement and Analysis

ACC 501 Seminar in Accounting (Offered each quarter, one-credit. First year Ph.D. students are graded on a P/F basis, second year and later students receive a letter grade). A forum for the presentation, discussion and critique of current accounting research papers where accounting faculty, Ph.D. students and outside speakers present working papers on current research topics. Students are expected to actively participate in the discussion and critique of the papers presented. In weeks when accounting workshops/seminars are scheduled, accounting PhD students will meet as a group with a member of the accounting faculty before the seminar to discuss the paper. Since such meetings are designed to facilitate students’ active participation in the seminars, students are required to circulate a brief set of comments to the other class participants in advance of the meeting. Grading will be based on the quality of students’ contributions to the pre-seminar meetings as well as their contributions and participation in the actual workshops. An additional requirement for first year students is that each must replicate and update an existing paper and present the results in the Winter or Spring Quarter in ACC 501 or AEC 501. The paper to be replicated and updated, as well as the completed project, must be approved by two accounting faculty members.

ACC 510 Accounting Research I (Offered Fall Quarter, 3 credits). The natural starting point for the study of capital markets research in accounting begins with the relationship between accounting earnings and security returns. This course covers the evolution of research on the earnings/return relation from the seminal papers up through current research. Topics covered include the fundamental features of the contemporaneous earnings/return relation, the nature of association-type and event study-type investigations of the contemporaneous earnings/return relation, theoretical and empirical evidence on the lead/lag relation between security returns and accounting earnings, the asymmetric timeliness of accounting earnings, theoretical and empirical research on the role of conservatism in accounting earnings, pro-forma earnings and international research on the characteristics and properties of the earnings/return relation. The course also covers capital market research on analysts’ earnings forecasts including the properties of such forecasts (e.g., optimism, pessimism, rationality) and the relation between analyst earnings forecasts and stock prices.

ACC 511 Accounting Research II (Offered Winter Quarter, 3 credits). This course turns the focus from ACC 512: Advanced Topics in Accounting (Offered Spring Quarter and alternates with ACC 513, 3 credits). This course covers advanced topics in accounting research including the role of accounting numbers in debt contracts and lending agreements, the role of accounting numbers in executive compensation contracts and corporate governance, the economic consequences of accounting regulation, the use of accounting-based measures of the cost of capital and empirical tax research in accounting.

Prerequisites: ACC 510 and ACC 511.

ACC 513: Contemporary Topics in Accounting Research (Offered Spring Quarter and alternates with ACC 512, 3 credits). This course covers topics including value relevance, accounting-based valuation models, earnings quality, the impact of earnings and accrual quality on firm valuation, the impact of real activity management on firm performance, market efficiency with respect to accounting numbers, the economic consequences of fraudulent financial reporting and the effects of accounting restatements. Prerequisites: ACC 510 and ACC 511.