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ELS session

    Jane R Livingstone
    When Tax Research Becomes Professional Research
    ELS session posted July 31, 2010 by Jane R Livingstone, last edited February 10, 2012 
    861 Views, 3 Comments
    When Tax Research Becomes Professional Research
    names(s), affiliation(s):
    Jane R. Livingstone, Western Carolina University
    August 2, 2010 3:00pm - 4:30pm
    syllabus and power point for professional research



    • Robert E Jensen

      Arrogant professors often assume that practitioner journals mostly publish fluff. In reality, practitioner journals often publish technical jargon papers for which academic experts are nonexistent or very rare finds by journal editors.

      One of the great myths in academe is that academic research journals are more technical than practitioner journals. In reality sometimes academic journal editors cannot find a professor to referee a technical paper such as a very technical paper in insurance accounting, international tax accounting, ERP, XBRL, or many of the esoteric subtopics in FAS 133.

      In reality, practitioner journals sometimes publish articles that are deemed too technical for academic accounting research journals. I mentioned previously that I submitted a rejoinder article to Issues in Accounting Education on accounting for derivative financial instruments for which the Editor could not find a single professor to referee the article. The IAE Editor then found to technical practitioners in Big Four firms to referee my paper --- 

      As a second illustration, two of my best technical submissions were turned back by academic journal editors with comments that they were too narrow and too technical for their academic readership. I then found a practitioner journal that had both papers refereed by Wall Street experts ---

      June 11, 2011 reply from Robert Bruce Walker

      On Sat, Jun 11, 2011 at 8:00 PM, Robert Bruce Walker <>  wrote:

      I have thought about what practice focused accounting research would comprise and I have some difficulty seeing what it might be. For academic research to benefit practice necessitates that there be some generic problem of interest to practitioners. In civil engineering, for example, academic research might contribute by looking at the attributes of some new building material. Medicine benefits by study of new drugs or surgical techniques and so on. But accounting happens at the level of the particular. Each accounting problem is unique to itself. Accounting is the process by which double entry is applied to produce a representation of what happened (or what might happen I suppose).

      Short of the academic actually participating in the messy practice of accounting I don’t see how they can contribute to the real business of accounting. But then that might be the answer. In my practice I have more accounting problems than I can practically deal with … where are the academics and their students to help me?

      June 12, 2011 reply from Bob Jensen

      Hi Robert,

      Research is defined as a contribution to new knowledge whereas scholarship is the mastery of existing knowledge.

      You raise three questions of interest.

      • The most important question is whether research on professional problems is making a valuable contribution to the practice of accounting? Obviously there have been valuable and monumental changes in the practice of accounting such that it's obvious that somewhere at some time new knowledge (research) contributed to those changes in accounting practice. Otherwise accountants would still be sitting on three-legged stools making journal entries and postings with quill pens.

      • The second question is whether academic researchers made the seminal contributions to valuable contributions to the practice of accounting?

      • The third question is whether academic accounting researchers made valuable additions to seminal contributions to of practitioners and researchers in other academic disciplines?


      The most important question is whether research (new knowledge) on professional problems is making a valuable contribution to the practice of accounting?
      The answer to the first question is a resounding yes, although the "value" of "new knowledge" contributions varies greatly by topical area. Where would tax practice be today without research on international and domestic taxation, including legal and economic research? Where would accounting information systems (AIS) be today without research on design, software, security, hardware, etc. be without research? In your specialty, where would forensic accounting be today without research on how and why frauds and other types of cheating take place?


      The second question is whether academic researchers made the seminal contributions to valuable contributions to the practice of accounting?
      The second question is difficult and in some cases impossible to answer unless a "eureka moment" actually transpired that led to improvements in accounting practice. In most instances those monumental "eureka moments" just did not happen as research accumulated like bricks being added to a building. Or the "eureka moments" transpired so far down at the foundation level that they're sometimes forgotten when adding bricks to the upper walls. For example, we can trace computer hardware back to the "eureka moment" of the conception of a transistor (Shockley) and millions of other Eureka moments in science and engineering technology taking place over the past 100 years or even further back in time if we want to delve into the "eureka moments" in electricity.

      On occasion we've identified some "eureka moments" to accounting practices. Bob Kaplan traces ABC costing back to such a moment in a John Deere factory. Dale Flesher traced dollar-value LIFO back to a practitioner. But those eureka moments are seldom identified since more often than not changes in accounting practice are rooted in new knowledge in underlying disciplines of science and engineering and the social sciences, including economics. When there've been "eureka moments" leading to changes in accounting practice,  those moments are almost never attributed to academic researchers. Understandably they arise from practitioners themselves seeking ways to improve their job functions and contributions.

      Many changes in accounting practices are rooted in new knowledge of financial contracting. Although options contracts can be traced back to the Roman empire, things like interest rate swaps are rooted in an IBM contract in the 1980s. And a defeasance contract can be traced back to an Exxon contract in the 1980s. Major contributions to practice such as the Black-Scholes Option Pricing Model can be traced to seminal moments of academic researchers, but these seminal moments more often than not took place outside the discipline of accounting.

      Many "eureka moments" in fraud can be traced back to the perpetrators themselves who dreamed up frauds that the rest of the world had never dreamed of before the frauds actually transpired. Sometimes the clever thinkers had not even finished high school.

      The pickings are pretty slim when if we try to award "Walker Prizes" to accounting professors who made "eureka moment" seminal contributions to changes in accounting practice. As I stated above, changes in accounting practice came more from bricks being laid in a building than where one brick is designated as a cornerstone. The American Accounting Association has made five "Seminal Contributions to Accounting Literature Awards" over the years, but I doubt that most practitioners can name even one of the seminal literature pieces, although some might've expected Bob Kaplan to get an award for his work in ABC Costing. But Bob will be the first to admit that the seminal contribution to ABC Costing came from unknown practitioners in a John Deere plant.  The other recipients, including the Ball and Brown initial award, built upon earlier research with seminal contributions in economics and finance ---
      In any case, the changes in accounting practice that took place due to these particular seminal contributions are very difficult to link. Practitioners most likely would not have made any of these seminal research award.



      The third question is whether academic accounting researchers made valuable additions to seminal contributions of practitioners and academic researchers in other academic disciplines?
      If we confine ourselves to those contributions that changed practice, we must conclude that academic accountants have their names etched into parts of bricks put into practice buildings. Often the incremental value of academic accounting research is mixed into the clay and mortar along with other ingredients such that "Walker Prizes" would be very difficult to award in terms of a what a particular author contributed to a particular brick in the wall of practice. Certainly tax professors have added ingredients to changes in accounting practice. AIS professors like Bill McCarthy have added ingredients to changes in AIS practice. The academic works of some professors like Mary Barth have added ingredients to accounting standards even if we cannot point to a particular contribution that stands out above all other contributions.

      If we examine the American Accounting Association's Notable Contributions to Accounting Literature Award we find few if any such awards that can be linked to specific changes in practice ---

      Most practitioners (more than 99%) probably cannot name a single winner of the NCAL Award and randomly picked academic accounting teachers probably cannot do much better if pressed to name the title and/or author of one of the literature pieces that won the monetary NCAL Award. Most of these awards have been accoutics research awards chosen by accountics research professors. Some NCAL Award winning articles, especially before 1979, were actually aimed at changing accounting practice but the changes are generally difficult to trace into practice. There are no Nobel Prize winners here where practitioners can remember the importance of the literature piece.

      Many of the contributions of academic accounting researchers have been important in theory even if they did not have marked impact on practice. My best example here is the 1976 NCAL Award to Yuji Ijiri. The contributions of Yuji to accounting practice in the Year 2080 may be more appreciated by practitioners than it is in the Year 2011 in part because as of 2011 Yuji's contributions are just not yet practical for practitioners. The same might be said for Carl Devine and many of the other recipients of this prize.

      Very few NCAL Award recipients had immediate and marked impact on practice, although the contribution of Eric Lie is an exception. Regulators pounced upon his findings and changed practice immediately. Sadly he is a finance professor receiving an accounting prize for an article published in a non-accounting journal. Such is life on occasion when awarding a Notable Contribution to Accounting Literature.

      In Conclusion
      In conclusion Robert, I would have to argue that accounting practice has changed greatly in the past 700 years due to new knowledge, and new knowledge was generated mostly by some type of research. More often than not it was not accounting practitioners or academics who made the seminal contributions. And more often than not the seminal contributions were probably made by accounting practitioners vis-à-vis accounting professors, but it is naive to deny that accounting professors did not make research contributions that added to the clay and mortar going into the brick walls of accounting practice.

      My best example of changes in accounting practice is XBRL that is now having and will soon have an even more monumental impact upon accounting practice. If we try to provide seminal awards to developers of XBRL where do we start since XBRL builds upon so many research contributions leading up to XBRL ---

      XBRL is but one brick laid upon all the bricks that are laid under this brick ---

      Hypertext ---> PC ---> GUI,Mouse ---> GML,SGML --->Internet --->Hypermedia --->HTML, HTTP, WWW --->
      DYNAMIC WEB TIMELINE                 
      CGI,Java,JavaScript,DHTML,ActiveX,ASP ---> XML/SMIL --->RDF and OWL ---> OLAP ---> XBRL -
      SEMANTIC WEB  and
      "Opening Search to Semantic Upstarts: Yahoo's new open-search platform is giving semantic search a helping hand," by Kate Greene, MIT's Technology Review, September 8, 2008 --- 



      THE FUTURE OF SEARCH (or so says IBM) --- The Future of Search (or so says IBM) ---


      From the National Science Foundation
       The Birth and Rise of the Internet ---

      Also see Richard Jensen's (History, U of Illinois-Chicago) --- Scholars' Guide to WWW

      Charles Hoffman, a CPA practitioner, should probably get seminal credit for making the leap from XML to the XBRL reporting system. But since Charlie made his seminal contribution, many academic researchers in accounting and outside accounting have made valuable contributions to this evolving change in practice in accountancy.

      It's new knowledge that leads to change Robert, and new knowledge is research!
      And research contributions are only seldom identified "eureka moments."

      Bob Jensen's threads on accounting theory and research are at:


    • Jane R Livingstone

       I have no idea what your comments have to do with my ELS materials for the 2010 AAA meeting. Do you realize that my materials have to do with teaching a research class in a MAcc program and have nothing to do with academic research?

    • Robert E Jensen

      Hi Jane,


      My comment was mainly triggered by AECM conversations about practitioner research and as such, I thought it was appropriate to point out that paractitioner journals do publish valuable research.