You know that comprehensive be-all-and-end-all literature review you always wanted to write on fair value accounting (or revenue recognition or principles-based accounting standards, etc.)?  You’ve put it off because it was simply too much work for too little benefit to your research program and reputation.  Well, FASRI is here to encourage you to do just a negligible fraction of that work — half an hour writing a blog post, or an hour leading an online discussion at Office Hours.  Obviously, the benefits will be smaller, but compared to that monograph you’ll never get around to, more likely to exceed the costs.

I phrase it this way after reading this interesting paper by Fulbier, Hits and Sellhorn on “Relevance of academic research and researchers’ role in the IASB’s financial reporting standard setting,’ which I think does a pretty good job of explaining why there isn’t more policy-relevant research–and lays the groundwork for understanding how FASRI can help.

I read this article with an emphasis on costs and benefits–and FHS paint a picture in which the costs of policy-relevant research are very high to the researcher, and the benefits are small.

Staggering Costs

FHS cite a paper by Katherine Schipper that leaves me thinking that writing a single study that can inform standard-setting deliberations requires a lifetime of toil (emphasis mine):

Schipper (1994, pp. 63-67), goes on to identify four qualities of policy-relevant ex ante research: Immediacy refers to topicality: The research needs to address a topic on the standard setter’s agenda while there is still time to influence (improve) the decision. The second criterion, comprehensiveness, implies that the researcher addresses all aspects of the topic in which the standard setter is interested. This property runs counter to the incrementalist, piecemeal approach adopted in much of extant research. Few researchers compile comprehensive monographs on all relevant aspects of a given topic, although there are exceptions.  Third, conclusiveness requires that the research findings are unambiguous and lend themselves to definite interpretation and inference. Given omnipresent methodological problems, such research is very rare. The fourth criterion, emphasis on the answer to the question, is fulfilled when the researcher frames her results in a manner that addresses the standard setters’ concerns by presenting them concisely and making clear recommendations. The last two criteria imply that ‘packaging’ one’s research is important if standard setters are to notice and use it. Simplifying and emphasizing the core results and implications, while maintaining professional honesty and integrity,  seems to be called for.

Limited Benefits

Given the staggering costs imposed by comprehensiveness and conclusiveness, who would consider taking on such a task–especially since FHS point out that conducting such daunting work is of little benefit to the researcher:

In the context of the FASB,  Beresford and Johnson (1995, p. 113) note that ‘academics generally get little promotion and tenure credit for comment letters’, suggesting that little such credit is also given in the U.S. for other types of standard-setting involvement. Since research output is paramount in the tenure process (e.g., Schultz, Meade and Khurana, 1989) and standard setting-relevant research including policy papers is underrepresented in top-tier journals, especially junior faculty face high opportunity costs for engaging in such activities.

Policy-relevant research then becomes the sole domain of the tenured:

After being tenured, the publication record becomes less important and other fields of activity may come to the fore. Therefore, policy-relevant research may hold special appeal for more experienced academics.

What Can FASRI Do?

I take as given that researchers are going to continue to advance their careers by publishing academic papers in peer-reviewed journals that are evaluated by academics with at best modest consideration of the ability of their research to inform standard setters.  It will be the very rare junior faculty member who earns tenure by writing a research paper that provides a comprehensive and conclusive analysis that standard setters can rely on.  However, junior faculty can write papers that address particular aspects relevant for standard-setting topics, and those papers can accumulate into a body of knowledge that more senior scholars can synthesize.

Given this assumption, FASRI’s first goal is to support the immediate and question-relevant studies that are not comprehensive or conclusive (which no single study can be), but are publishable in outlets of value to untenured faculty.  We provide this support by bringing researchers face-to-face (well, almost) with FASB staff almost every week, for office hours, and by providing a blog that provides an easy way to keep up on research and standard-setting developments.  This sort of broad access is unprecedented, and it would be a pity if scholars (young and not so young) did not take advantage of it.

Our second goal is to provide support for the more senior faculty who are reluctant to write an extended synthesis of an entire body of research.  A comprehensive and conclusive synthesis involves more work that most are willing to take on.  But our hope is that many can be persuaded to write a few hundred words on the FASRI blog that synthesize a single idea in terms digestible by standard setters, or to give a single presentation in a low-cost environment like FASRI Office Hours, in which they discuss one aspect of research they already know well.

These small efforts can accumulate to large benefits to the research community and to standard setters, by providing guidance and insight to young scholars, and by easing the task of those who choose to write that comprehensive and conclusive literature review.  As the blog develops a steady flow of content and a steady readership, writing blog pieces will provide even tenured faculty with some professional benefit of their own:  an platform from which they can influence their academic colleagues work and the path of standard setting.

If you are interested in writing some blog pieces for us, take a look at this page, and drop me a line.  Or feel free to volunteer someone else you think might be interested.