• Erkki Liikanen delivers speech at the European Accounting Association Conference 2023

    Erkki Liikanen, Chair of the IFRS Foundation Trustees, delivered his speech at the welcome reception for the European Accounting Association Conference in Dipoli, Finland, on 24 May 2023.


    Good evening everyone. I am happy to see you all here in Finland and in this wonderful Dipoli, which was built for the students at the University of Technology at their own initiative. Reima Pietilä, a famous Finnish architect, said modestly that ‘it does not represent good taste, but defends its right to be different but still architecture’.

    People of my generation have many memories in this building. As young students, we launched here a major campaign for the liberation of Southern African colonies. In the autumn of 1972, a very large European Youth Security Conference was organised here. For a 21-year-old member of Finnish parliament, it was very special to give the opening speech here then.

    Global accounting standards

    And now to global accounting standards.

    I am happy to welcome you as the Chair of the IFRS Foundation Trustees. Before that, I spent many years in central banking. Two decades beforehand, Paul Volcker held this role after his world-famous career in central banking.

    Paul Volcker was a visionary. As the chair of the Federal Reserve, he rescued the American economy from rampant inflation. In our world, he also served as the inaugural Chair of the IFRS Foundation Trustees.

    Not only did he guide the formation of the Foundation and the International Accounting Standards Board (IASB) in 2001, following on from IOSCO’s endorsement of IFRS Accounting Standards, he also travelled around the world encouraging their adoption. I met him in early 2000 during his trip to Brussels.

    Paul Volcker addressed the European parliament, arguing that Europe should embrace the fledgling IFRS Accounting Standards. He also addressed the US Congress following the failure of Enron and WorldCom, arguing that US accounting was in a state of crisis. Paul Volcker, with many others, including members of your organisation, laid the groundwork for IFRS Accounting to become the de facto global language of financial reporting. It is spoken as a first language in more than 140 countries and as a second language by the rest of the world.

    Companies, investors, regulators, auditors and academics all benefit from this global lingua franca. It’s a great story—a story we sometimes forget to tell. In a world of so many geopolitical divisions and tensions, it is more and more appreciated.

    Today, I pay tribute to Paul Volcker also for his work to improve banking structures. In 2014, the managing director of the IMF, Christine Lagarde, invited him and me to participate in a panel in Washington. The theme was ‘how to make the banks safer’. It is again topical.

    Global sustainability disclosures

    Climate and other sustainability issues are today high on many agendas.

    Financial statements are key, but investors are interested in a broader set of information. Climate especially, but sustainability information in general, is on the top of the list.

    Identifying winning and losing business models requires a more thorough understanding of risks and opportunities over the short, medium and long term.

    To tackle the carbon transition, we need policy measures and private capital, and to get private capital, we need better disclosure.

    Patrick Bolton and Marcin Kacperczyk produced a study that found that voluntary emission disclosures lead to a significant reduction in the cost of equity capital. They suggest that there is room for more disclosures by more firms.

    With more systematic disclosure, asset managers will be in a better position to manage the carbon footprint of their portfolios. Banks will be better able to assess their exposure to carbon transition risk. And carbon data providers will be able to estimate more accurately the direct carbon emissions of non-disclosing firms. They can also estimate indirect emissions firms are exposed to in the supply chain or are generating through the use of their products.

    So, climate and broader sustainability factors matter to the capital markets—but there were no internationally accepted sustainability disclosure standards for the capital markets. No IFRS equivalent for sustainability, but instead an alphabet soup of voluntary standards.

    The G20, G7, the Financial Stability Board, IOSCO and others have been vocal about demand for sustainability disclosures. In 2020, the IFRS Foundation Trustees sought replies to two key questions: Was there demand for global standards? If so, should the IFRS Foundation play a role, and how? The overwhelming feedback was positive.

    In November 2021, we launched the International Sustainability Standards Board (ISSB) at COP26 in Glasgow. Its mission is to develop, in the public interest, a global baseline of sustainability disclosures for the capital markets. We announced the consolidation of the Value Reporting Foundation and the Climate Disclosure Standards Board, and we published prototype requirements that build on established frameworks, such as TCFD.

    It has been an intensive 18 months since COP26. Early on, our priority was to establish the leadership and appointment board and build its presence globally.

    The ISSB consulted on draft Standards for general sustainability disclosures and a climate Standard, then set about refining its proposals based on feedback received. The plan is to publish these inaugural Standards soon, at the end of June.

    Earlier in May, the ISSB began a consultation on future priorities.

    Preparations are underway around the world to consider whether and how to adopt the new Standards. IOSCO will conduct its evaluation before deciding whether to recommend their use. We’re working with major jurisdictions through our Jurisdiction Working Group, as well as on a bilateral basis. For example, we have very good co-operation with the European Commission and EFRAG. And we continue to work well with our international peers, such as the Global Reporting Initiative.

    The importance of academia

    None of this would be possible without the deep involvement of the academic community.

    The European Accounting Association has been with us at every step of the way. As you celebrate your 45th annual congress, we celebrate your central role in our work. Our success is your success—intially for global accounting standards, and more recently for global sustainability disclosures.

    We value academic research for its independence and rigour. We continually look for high-quality evidence that can assist in making standard-setting decisions. We have always had academics on the standard-setting boards, among the IFRS Foundation Trustees and on our advisory bodies, such as the Advisory Council.

    We are grateful for the support you are providing through various workshops and consultations throughout the year, especially the IASB Research Forum for academics, which is being held this year in Paris from 2–4 November 2023.

    The ISSB is also developing its relationships with academics through a range of conferences and other activities. There are long-established relationships with academics through the Value Reporting Foundation and its consolidated organisations, the International Integrated Reporting Council and the SASB.


    All of these developments indicate strong and effective relationships between the IFRS Foundation, our standard-setting boards and the academic community around the world. Standard-setting has always been rooted in academic rigour, and always will be. We are highly receptive to further deepening our co-operation, and I look forward to continuing our discussions over drinks.

    Thank you for your attention.

    You can find his speech –

  • Who ‘owns’ the university accounting curriculum?

    I have just published, in Accounting in Europe a Commentary on who owns the university accounting curriculum? I also reflect on why that ownership matters.

    This is the link (free access):

    The questions raised in the commentary are: who determines, who owns, the accounting curriculum in universities and does it matter who does? 

    The first question has a clear answer. But the answer is not what you would expect it to be. It is not the accounting professoriate that owns the accounting curriculum. Professional accountants and auditor organisations, the accounting profession, as well as accounting and auditing regulators and oversight bodies do. 

    The commentary is confessional. I have been an accounting department chair at two Dutch universities since the early 1990s. I never did much to stem the curriculum demands coming from the Dutch, European, and worldwide accounting profession, from regulators and oversight bodies.

    Recently though I have come to realise (an answer to the second question) that who owns the accounting curriculum negatively affects in important ways the quality of professional accounting and auditing, its regulation and oversight. I now realise my indifference was wrong. This is the background for the commentary.

    Indifference here is wrong in principle. If the accounting and auditing professions want their members to be university trained, they will have to accept studying a curriculum determined by accounting academics: the accounting professoriate. 

    But my indifference was also wrong because of its consequences. The domination of the accounting profession and regulators of the university accounting curriculum prevents the accountants and auditors from reaching their true professional quality potential. I give several striking examples.  

    University-trained accountants and auditors are doing fine as professionals in their various roles. But they could do better.  I argue in the commentary that this, doing better, will only happen when the profession’s, regulators and oversight bodies domination of the university accounting curriculum disappears. That is: when the accounting professoriate will take full charge of curriculum design.

    The commentary is a call for that to happen.


  • ICAS – The role and responsibilities of the accountants of tomorrow

    ICAS is embarking on a project on the shape of the accountancy profession of the future: to consider both how the accountants of tomorrow will deliver services and activities, but also crucially what these services and activities ought to be to deliver value, usefulness and insight to the benefits of society.


    The first logical step for this programme of activity is to take stock of what research and thought leadership already exist on the role and responsibilities of the accountants of tomorrow.  I am therefore issuing a call for a literature review to identify, consider and evaluate extant literature, both academic and professional, on the accountancy profession of the future.  The closing date for applications is 31 May 2023.


    Should you be interested in applying for this funding opportunity, further information and the application form can be found on  Please do not hesitate to contact should you require further clarification.

  • The real consequences of classification shifting: Evidence from the efficiency of corporate investment

    In our study, we investigate the real consequences of classification shifting (CS), a form of earnings management, by examining its effect on corporate investment efficiency. CS refers to the deliberate and improper inclusion of core expenses in negative special items (Joo & Chamberlain, 2017) and represents a form of non-bottom-line profit manipulation that increases core earnings without affecting bottom-line profit (e.g., Haw et al., 2011; Joo & Chamberlain, 2017; McVay, 2006). Firms have incentives to engage in this practice because core earnings are more informative than non-core ones in predicting future earnings (e.g., Haw et al., 2011; McVay, 2006). Despite the pervasive use of CS, there is, however, limited research that investigates the consequences of this financial reporting practice, with limited exceptions (Anagnostopoulou et al., 2021; Liu & Wu, 2021), focusing, however, on the consequences of CS for future firm success within the IPO context.


    In our paper, we extend limited research on the consequences of CS by departing from the IPO context and examine whether this practice is associated with firm-level investment efficiency. We directly test for the real consequences of CS—a widespread practice of misclassifying income statement line items—by focusing on all firms, rather than on firms that have recently engaged in IPOs only. We hypothesize that CS can be negatively associated with firm investment efficiency for two reasons. First, we expect that the ways of reporting different profit items within the income statement should increase information asymmetry between managers and capital providers regarding the level of core, and so more likely repeatable, firm performance. Second, we anticipate that classification shifting will aggravate agency problems and distort managers’ own perceptions of their firms’ sustainable profitability, resulting in imperfect investment-related information sets for them, ultimately leading to inefficient investing.


    We examine our research question for North American nonfinancial firms between 1990–2019 by measuring CS following Joo and Chamberlain (2017), based on the methodology established by McVay (2006). We measure investment efficiency by examining the sensitivity of a firm’s investment to its growth opportunities (e.g., Asker et al., 2015; Badertscher et al., 2013; Shroff et al., 2014). Higher sensitivity of investment to growth opportunities indicates more efficient investing, as investment should be more responsive to growth opportunities when adjustment costs, i.e., information frictions and agency problems, are low (Hubbard, 1998; Shroff et al., 2014). We find that firm engagement in CS strongly decreases the sensitivity of investment to growth opportunities, suggesting that this practice has a negative effect on firms’ investment efficiency. After investigating the economic mechanisms explaining this association, our results are more pronounced when other information and agency problem-related factors that should protect against inefficient investing are weaker, and also for firms whose managers have fewer opportunities to learn from peers, which could alleviate potential classification shifting-related distortion effects on managerial perceptions.


    Our study provides evidence on the adverse real consequences of CS, a form of earnings management without any reversing effects for bottom-line future performance, with reference to a very important firm-level outcome, namely efficient investing. We show that CS, or a form of earnings management which also less likely to attract the scrutiny of auditors and regulators (Athanasakou et al., 2009; Cain et al., 2020; McVay, 2006), is not the low consequence form of financial misreporting that it has previously been considered to be, as it is negatively and significantly associated with the efficiency of investment. Understanding the consequences of CS, particularly with reference to investment efficiency is important as this efficiency plays a key role in future firm performance (Cai & Zhang, 2011; Titman et al., 2004).


    Past research has mainly focused on how firms’ own production of information influences their investment decisions, and has largely neglected other sources of information which could also help reduce adverse selection costs with a beneficial effect on investment efficiency (Roychowdhury et al., 2019). However, we explicitly identify other sources of accounting information that can influence a firm’s own adverse selection costs and investment decisions, as we examine the effect of disclosures from peers on efficient investing, by showing that the latter favor managerial learning from such disclosures. Overall, our paper contributes to the literature on the real effects of accounting (Leuz & Wysocki, 2016; Roychowdhury et al., 2019; Shroff, 2020), by examining whether the misclassification of items within the income statement is associated with efficient investing, and provide additional insights regarding the impact of earnings manipulation on efficient investing when this manipulation affects operating profit reporting rather than the bottom line.


    This paper, by Seraina C. Anagnostopoulou and Kamran T. Malikov, is forthcoming at EAR:



  • The IECJ invites submissions for the 2023 Case Writing Competition on (1) Social and/or Environmental Sustainability and (2) Data Analytics.

    The IMA Educational Case Journal (IECJ®) is a quarterly, online journal whose mission is to publish for management accounting and related fields:

    • Teaching cases
    • Research related to case writing or teaching with cases


    The case studies in this journal provide an educational resource rich in detail to reflect current problems and complexities characteristic of today’s dynamic business environment. It aims to facilitate interaction between financial professionals and educators.

    IECJ is listed in the Cabell’s Directory of Publishing Opportunities in Accounting.


    For more information, please click here –

  • Accounting Research in Central & South America

    Within the series of virtual conversations on “Diversity and Equity”, the European Accounting Association (EAA) Virtual Activities Committee is delighted to invite you to the event “Accounting Research in Central & South America”, which will take place on Zoom, on April 19th, 2023, at 2:15 – 3:45 pm CET.

    Registration is free and open here.

    Central & South America consists of a diverse set of countries that nonetheless face common political, economic, and social problems; among these, high inequality and volatile growth, which have contributed throughout the years to high levels of poverty. However, since the 2000s, many countries in the region have reduced inflation, brought external debts under control, and improved on most of the key economic and social performance indexes. These structural changes achieved by the Central & South American countries have attracted the attention of external investors, as well as large international audiences. In spite of a vibrant and growing accounting literature emanating from researchers in the region, international research communities still lack a systematic understanding of accounting issues within the context of Central & South America.

    We welcome you to join Fábio Frezatti, Giogio Gotti, Thuy Tran, Mary Vera-Colina (Speakers), and Claudio Wanderley (Moderator) in accounting research in Central & South America. The speakers involved in this virtual conversation will offer an overview of the accounting research conducted in the context of Central & South America to advance the understanding of issues related to this region. The event aims to engage with researchers that work on the field or want to know more about it, and provide the opportunity for new collaborations.

    We hope you can join the conversation. If you have any questions you would like to be discussed, please submit your questions using the registration link.

    We thank the speakers and the EAA for their support, and we look forward to welcoming you to this conversation.

    EAA Virtual Activities Committee


    Fábio Frezatti, Professor of Accounting at the University of São Paulo, Brazil. He is the former Dean of the São Paulo University Business School. He was member of the board of directors of the European Accounting association (EAA, Central & South America representative). He was the founder and first president of the Brazilian Accounting Association (ANPCONT). He was also a member of the Executive Committee of the International Association for Accounting Education and Research (IAEER). He is editor-in-chief of the ‘Contabilidade e Finanças’ Journal. He has published his research in a range of highly ranked academic outlets, e.g., Accounting, Auditing & Accountability Journal, European Accounting Review, Journal of Business Research, Journal of Management & Governance, among others.

    Giogio Gotti, Professor of Accounting and the Director of the School of Accountancy at the University of Texas Rio Grande Valley. He is serving in the Board of Directors of the American Accounting Association (AAA) with a 3-year term (2020-2023) as Director – Focusing on International. His research interests include international and financial accounting. He is the co-author of the North American best seller textbook International Accounting, published by McGraw Hill. His papers have been published in the International Journal of Accounting, Journal of Accounting, Auditing & Finance, Journal of Accounting and Public Policy, Journal of International Accounting Research, Journal of International Accounting, Auditing & Taxation, Management International Review, Journal of Business Ethics, among others.

    Thuy Tran, Research Associate at the Justus Liebig University Giessen in Germany. She completed her Ph.D. in sustainability accounting at the University of Kassel. She has been a mentee in the Research Mentoring Scheme of the British Accounting and Finance Association. Her primary research interests are education for sustainable development, environmental management accounting, and accounting for modern slavery. Her research is international in scope and includes studies of innovative pedagogies (animated videos, podcasts, and case studies) as well as on integrating sustainability into accounting curricula in Latin America, Germany, England, and Vietnam. She was awarded a Visiting Professorship at the Externado University of Colombia in 2022. She also won the best Teaching Case Study Award at the 2020 International Food and Agribusiness Management Association Conference. As an emerging scholar, she has actively engaged with international academic communities in various roles, including as a guest speaker at renowned universities (National University of Colombia), an invited reviewer at leading academic journals (Accounting Education), and the chair of an accounting education session (44th Annual Congress of the European Accounting Association).

    Mary Vera-Colina, Migrant woman, mother, wife, daughter, sister, aunt, friend, mentor, promoter of equity and diversity, explorer of the world, learner. Professional background: Public Accountant and Economist. PhD in Economics, Universidad del Zulia, Venezuela. Associate Professor at the National University of Colombia, in financial accounting courses and research seminars. Some networks and communities: INTERGES, CONTOD@S, QRCA, REDCOFIN and others. Research topics: Management in MSMEs, Business and accounting education, Gender studies. She actively participates in projects that promote inclusion and diversity.


    Claudio Wanderley, Associate Professor at the Federal University of Pernambuco, Brazil. He is member of the board of directors of the European Accounting Association (EAA, Central & South America representative). He is the former Director of Institutional Relations of the Brazilian Accounting Association (ANPCONT), and former member of the Executive Committee of the International Association for Accounting Education and Research (IAEER), and the American Accounting Association (AAA) Global Engagement Committee. He is associate editor of the ‘Contabilidade e Finanças’ Journal. He has had a number of research projects funded by renowned organizations such as Chartered Institute of Management Accountants (CIMA) and the Institute of Management Accountants (IMA). He has published his research in a range of highly rated academic outlets (e.g., Management Accounting Research; Accounting, Auditing & Accountability Journal; and Accounting Forum).

  • EAA ARC International PhD Visit Scheme – An experience

    My name is Giannis Lessis, and I am a Ph.D. student at the Athens University of Economics and Business (AUEB). During the Autumn semester of 2022/2023, I was a research visitor at Lancaster University (LUMS) supported by EAA ARC Ph.D. International Visit Scheme. The experience was outstanding, and I highly recommend whoever else is interested in pursuing it.

    The benefits of the Ph.D. visit are numerous and on multiple levels. First, I developed my Ph.D. research projects significantly. Specifically, I received valuable feedback from the faculty members on my job market paper by presenting it in an internal seminar. In addition, I thoroughly reviewed my Ph.D. research projects with my visit supervisor, Professor Argyro Panaretou. Moreover, I exchanged ideas, materials, and tools with Lancaster University’s Ph.D. students that are beneficial to improve my research outcome.

    Second, I attended seminars that Lancaster University organizes where external speakers and faculty members present their ongoing research. These seminars allowed me to learn about the topics that prestigious researchers work on and how they approach them. Moreover, they offered to meet the speakers in person and discuss details about their presentations and other research topics.

    Third, Lancaster University offers Ph.D.-level courses, some of which are in alliance with other universities. During my visit, I attended classes at Lancaster and Manchester Universities. I highly recommend them even if someone’s home institution has a similar one. At this level, discussion even on similar topics can be materially incrementally educational under different instructors because their approaches can be from different angles. Overall, the instructors assisted me significantly in understanding in-depth theoretical and technical topics and, more importantly, reviewing thoroughly classic and recent papers to improve my research skills.

    Fourth, the Ph.D. visit offers the opportunity to establish a long-term relationship with the host university and its members. This relationship can be in the form of starting a new research project or/and maintaining a constant channel for discussion on research. Both cases are particularly advantageous during and after the completion of the Ph.D. program.

    Finally, I want to thank Lancaster University and its members because they made my Ph.D. visit great. Thus, I highly recommend it as an excellent option for the host university to whoever is interested in doing a visit.

  • Academic Empathy Dialogue: “Theory and theorizing in accounting”

    The EAA Virtual Activities Committee is pleased to announce a new Academic Empathy Dialogue on the topic of “theory and theorizing in accounting” hosting Alfred Wagenhofer (University of Graz) and David Cooper (University of Alberta), mediated by Eija Vinnari (Tampere University). The event will take place on Zoom on March 14th at 5:00pm Brussels time.

    The recording is available here.

    The notions of theory and theorizing continue to spark debate among accounting scholars. One persistent topic concerns the extent to which accounting can be said to have its own theories. At one extreme are scholars who address theoretical accounting questions using theories based in, for instance, economics, psychology, or sociology. The other extreme is represented by researchers who regard accounting as a distinct domain with its own theories. A second topic of debate focuses on theories imported from other disciplines, with some claiming that the adoption of economics as the primary discipline underlying accounting studies would be most beneficial for theory building, whereas others defend the application of theories drawn from social sciences, media studies, linguistics and so forth. A third debate revolves around the so called “theory is king” thesis, according to which researchers need to constantly strive to make a theoretical contribution to prior research in their conceptual as well as empirical work. Concerns have increasingly been raised about researchers placing too much emphasis on theory development, leading to overly complex theorizing and the neglect of societal and practical considerations.

    Such debates represent key tensions for the development of our field of study, as well as for enhancing the practical and societal contributions of accounting research. Accordingly, this EAA academic empathy conversation will explore questions such as:

    • What is theory – or what is it not?
    • What is meant by ‘theorizing’?
    • Does accounting have its own theories and if so, what are they?
    • How do theories originating in other disciplines help us understand accounting phenomena?
    • To what extent does the ‘theory is king’ thesis hold in accounting research? Is there any cause for concern?
    • What is the role of theoretical contributions in relation to a study’s practical and societal implications?
    • Which phenomena, if any, are under-theorized in accounting research?

    Background readings

    Abend, G. 2008. The meaning of ‘theory’. Sociological Theory, 26(2), 173-199.

    Sutton, R.I. & Staw, B.M. 1995. What theory is not. Administrative Science Quarterly, 40(3), 371-384.



WordPress Cookie Plugin by Real Cookie Banner