Academics: Help Us Improve Financial Reporting
Why does the FASB want to hear from academics?
Research undertaken directly by the FASB tends to focus on gathering specific input on proposals through due process activities. What is learned through these activities is invaluable to the standard-setting process.
By comparison, academic research examines how the accounting profession and financial reporting affect business and markets, and how business and markets affect the accounting profession and financial reporting at a more macro-level.
Academic research is incremental and complementary to that undertaken by the FASB. With its high- level view and rigor, academic research provides unique insights, which can enhance the FASB’s understanding of an issue and aid in the development of possible solutions. Consequently, the FASB needs and wants to hear from academics.
How does the FASB consider academic perspectives or research?The FASB considers academic perspectives and uses academic research in a variety of ways:
- Pre-agenda research involves evaluating a potential project against FASB’s agenda criteria:
Frequently, academic research is used to help assess the significance and pervasiveness of a perceived problem in GAAP and identify potential technically feasible solutions.
- There is an identifiable and sufficiently pervasive need to improve GAAP
- There are technically feasible solutions and the perceived benefits of those solutions are likely to justify the expected costs of change
- The issue has an identifiable scope.
- Materials provided to the Board members to discuss in public decision-making meetings include balanced analysis of alternative solutions to a problem that analyze both the benefits and costs of each alternative, supported by information gathered through:
- Comment letters
- Stakeholder outreach activities
- Reviews of relevant academic literature
- Other means.
- The Financial Accounting Standards Advisory Council (FASAC), the FASB’s primary advisory group formed in 1973, comprises investors, preparers, auditors, academics, and other users of financial reporting
- The Academic Resource Group (ARG), which was formed in 2014, comprises academics who meet periodically to provide input to the FASB on various issues
- The Financial Reporting Policy Committee (FRPC) of the Financial Accounting and Reporting section of the American Accounting Association
- The Financial Reporting Issues Conference (FRIC), which is an annual conference attended by academics.
FASB members and staff discuss the role academics play in the standard-setting process—
and how they may email their research to the Board at firstname.lastname@example.org.
and how they may email their research to the Board at email@example.com.
Why is the Conceptual Framework important?The Conceptual Framework is critical to FASB’s standard-setting process.
The objective of financial reporting—to provide financial information useful in making decisions about providing resources to an organization—is the destination standards strive to reach. The concepts comprising the framework (element definitions, measurement concepts, presentation concepts, etc.) serve to guide standards toward that destination.
The FASB’s Conceptual Framework helps the Board in setting sound financial accounting and reporting standards. For example, the framework provides the Board with theoretical guidance in selecting transactions, events, and circumstances to be accounted for, how they should be recognized and measured; and how they should be summarized and reported.
The Conceptual Framework is also a critical tool in the academic toolkit. It provides stakeholders a frame of reference for understanding the resulting standards, which is useful to students who study accounting and faculty who research and teach it.
The Conceptual Framework is not complete and consequently the FASB has an active project to refresh and complete it. Given the fundamental role the framework plays in accounting standard setting, input from members of the academic community is essential.
More information regarding the Conceptual Framework project and opportunities to engage can be found here.
FASB Member Christine A. Botosan and FASB staff discuss the conceptual framework:
What it is, how the Board uses it, what’s coming next, and how you can get involved.
How can I find out what projects the FASB is working on?A complete and continuously updated list of projects the FASB is working on is available on the FASB website. In addition, the FASB publishes a quarterly e-newsletter, the FASB Outlook, which is designed to inform stakeholders about key FASB projects and activities. The FASB Outlook presents current accounting and financial reporting issues in a “plain-English,” user-friendly format.
How can academics participate or submit a paper?You can provide comments on specific projects electronically to firstname.lastname@example.org. As part of its open decision-making process, the FASB asks for public feedback on Discussion Papers, Exposure Drafts, and other proposals issued at various stages of a project. Your submission will become part of the public record.
If you would like to discuss any current FASB projects or proposed projects, you can contact Jill Switter via email or call her at (203) 847-0700.
If you would like to submit an academic paper to the FASB to be considered in standard-setting activities, please send an email to email@example.com.
What educational resources are available from the FASB?Another key aspect of FASB’s mission is to educate stakeholders on how to effectively understand and implement FASB standards. The FASB recognizes and appreciates the academic community’s critical role in accounting education and undertakes many supportive activities including:
- Hosting student visits to the FASB offices in Norwalk, CT. If you would like more information about a student visit, please contact Joe Vernuccio at (203) 847-0700.
- Offering a FASB Speaker Request Portal that guides stakeholders, step by step, through the process of requesting FASB speakers—including criteria for the acceptance of FASB speaking invitations.
- Publishing the quarterly FASB Outlook newsletter, which presents current accounting and financial reporting issues in a “plain-English,” user-friendly format.
- Publishing FASB In Focus summaries of new and proposed Accounting Standards Updates.
- Hosting free educational webcasts and webinars on a periodic basis.
- Webcasting public meetings and providing meeting documents and minutes.
- Offering a library of videos and podcasts, which are useful in a classroom setting.
- Offering Action Alert, which provides real-time updates of FASB activities.
- Partnering with the American Accounting Association to offer access to the FASB Accounting Standards Codification® to academics and students.
What Is the FASB Post-Doctoral Program?The FASB seeks a highly-motivated Ph.D. graduate (current or within the past two-years) to serve one-to-two years on the FASB staff as part of its inaugural Post-Doctoral Fellow Program. The program brings academic research and skills to bear in the accounting standard-setting process, with the potential to undertake research activities in other areas. The selected candidate will obtain experience as an ad-hoc consultant on FASB projects and other career-enhancing benefits, including:
- Opportunities to conduct research and publish findings
- Access to XBRL data and training
- Exposure to cutting edge issues – benefiting students, enhancing research relevance
- Opportunities to develop deep institutional knowledge and a portfolio of relevant research questions, and
- Opportunities to network with preparers, practitioners, regulators, users, and other academics at the highest levels, and earn external professional recognition.
The tenure clock is expected to be suspended/delayed during the one-to-two-year period of the fellowship. Compensation will be competitive with 9-month assistant professor starting salaries; payable directly to the candidate (if the candidate is a FASB employee) or alternatively to the university (if the candidate is a university employee).
Interested applicants can apply directly through the program portal. The deadline to apply is January 10, 2018. Finalists will be invited to visit the FASB offices in Norwalk, Connecticut in February, with the successful candidate notified in March. The position begins on July 1, 2018.