ACCOUNTING RESEARCH FROM A FIRM S PERSPECTIVE Course lecturer Prof. Annalisa Prencipe Department of Accounting Università Bocconi Via Roentgen, 5th floor, room B2-01 e-mail: annalisa.prencipe@unibocconi.it Course description After a short introduction on basics concepts and terminology of financial accounting, this course initiates students to accounting research from a firm s perspective. The goal of the course is to introduce students to the main research streams that investigate the companies reporting and disclosure policies. For each research stream, the most relevant theories are first introduced, and both classic and recent academic contributions are analyzed and discussed. Main contents Introduction on financial accounting information and terminology The evolution of accounting research from a firm s perspective Earnings management and earnings quality Accounting conservatism Mandatory and voluntary accounting disclosure Reading material The course material includes selected chapters from monographs, articles and lecture notes (handedout by the instructor during the course) Class format The class format will be as follows: In each class (except for ss. 1-2) we will cover 3-4 published and/or working papers. All students are required to read the assigned papers before class. In each class (except for ss. 1-2) one/two students will be required to present one/two of the assigned papers. The remaining papers will be presented by the instructor and discussed by
all the class participants. The assignment for the paper to be presented by students will be made in the class prior to the one when the presentation is due. In addition, in the last sessions of the course (ss. 11-12) students will be required to present a recent paper of their choice (agreed with the instructor) related to one of the research streams discussed during the course. Assessment methods The final assessment will be based on: - Class participation 30% - In-class presentations 20% - Research proposal (see below) 50% Research proposal Part of the assessment for this course will be based on a research proposal prepared by students (either alone or with a peer) related to any of the issues addressed during the course. The due date for the proposal is November 3 rd 2017. The research proposal will be evaluated based on the following dimensions: - Clarity of positioning within the existing literature - Originality and potential contribution to the current knowledge - Relevance of the issue - Suitability of the research method - Clarity of exposition Students will receive more detailed instructions on the research proposal during the course. About the instructor Annalisa Prencipe is Professor of Accounting at Bocconi University, Milan. She is currently Dean of the Undergraduate School. She earned her Ph.D. in Business Administration and Management from Bocconi University. She has visited Harvard Business School, The Hebrew University of Jerusalem and NYSE. She is currently a member of the EAA Management Committee. Till 2015 she has served as Chairman and as a Member of the EAA Publications Committee. Her research focuses on the areas of corporate governance, corporate disclosure and earnings quality, with special interest in family firms. She has published in various national and international journals, among which The European Accounting Review, Review of Accounting Studies, Journal of
Accounting Auditing and Finance, The International Journal of Accounting, Corporate Governance: an International Review, Family Business Review. She is currently Associate Editor of Journal of Accounting Auditing and Finance and member of the Editorial Board of The European Accounting Review, Accounting and Business Research, The International Journal of Accounting, Accounting in Europe. Annalisa Prencipe teaches graduate and post-graduate courses on financial reporting and financial statement analysis. She has been the Director of the Master of Science Program in Business Administration and Law. Course summary outline (Please, note that the course outline may be subject to changes. An updated version will be handedout at the start of the course) Ss. 1-2 A review of basic accounting concepts and terminology The evolution of accounting research from a firm s perspective SCOTT W.R., Financial Accounting Theory, Pearson, latest edition (selected chapters) Prencipe A., Recent trends and future directions in accounting research, Financial Reporting, forthcoming. Lecture notes by the instructor (to be handed-out after the class) Ss. 3-4 From Positive Accounting Theory to Earnings Management Earnings quality and earnings management: measurement issues SCOTT W.R., Financial Accounting Theory, Pearson, latest edition (Chapter 8, sections 8.1-8.2 + 8.7, and Chapter 11). Dechow P., Ge W. and Schrand C., Understanding earnings quality: A review of the proxies, their determinants and their consequences, Journal of Accounting and Economics, Vol. 50, 2010, pp. 344-401 (Sections 1-4).
Roychowdhury S., Earnings management through real activities manipulation, Journal of Accounting and Economics, vol. 42, 2006, pp. 335-370. Ss. 5-6 Earnings management: empirical evidence Dechow P., Ge W. and Schrand C., Understanding earnings quality: A review of the proxies, their determinants and their consequences, Journal of Accounting and Economics, Vol. 50, 2010, pp. 344-401 (Sections 5-7). Prencipe A., Bar-Yosef S., Mazzola P. and Pozza L., Income smoothing in familycontrolled companies. Evidence from Italy, Corporate Governance: An International Review, 19(6), 2011, pp. 529-546. Prencipe A. and Viarengo L., Should I trust you? Earnings quality as a signal in earnout agreements, Working Paper, Bocconi University, 2017. Minichilli A., Prencipe A., Radhakrishnan S. and Siciliano G., What s in a name? Eponymous private firms and financial reporting quality, Working Paper, Bocconi University-UT Dallas, 2017. Ss. 7-8 Accounting conservatism: measurement and empirical research Basu, S., The conservatism principle and the asymmetric timeliness of earnings, Journal of Accounting and Economics, 24(1), 1997, pp. 3 37. Khan, M., and Watts, R. L., Estimation and empirical properties of a firm year measure of accounting conservatism, Journal of Accounting and Economics, 48(2-3), 2009, pp. 132 150. D Augusta C., Bar-Yosef S. and Prencipe A., The effects of conservative reporting on investor disagreement, European Accounting Review, forthcoming. Cameran M., Prencipe A. and Trombetta M., Mandatory Audit Firm Rotation and Audit Quality, European Accounting Review, Vol 25 (1), pp. 35-58. Ss. 9-10 Mandatory and voluntary disclosure: measurement and determinants
Botosan C., A re-examination of disclosure level and the expected cost of equity capital, in Journal of Accounting Research, March 2002, pp. 21-40 Merkeley K.J., "Narrative Disclosure and Earnings Performance: Evidence from R&D Disclosures", The Accounting Review, n. 2, 2014, pp. 725-757. Patelli L. and Prencipe A., The relationship between voluntary disclosure and independent directors in the presence of a dominant shareholder, European Accounting Review, n. 1, 2007, pp. 5-33 Dhaliwal D.S., Radhakrishnan S., Tsang A. and Yang Y.G., Nonfinancial disclosure and analyst forecast accuracy: international evidence on Corporate Social Responsibility Disclosure, The Accounting Review, n. 3, 2012, pp. 723-759. Ss. 11-12 Students presentations (cont d)