Jim Leisenring’s remarks at yesterday’s roundtable were great.  In the portion related to the interaction of research and standard setting, he reminded us of two papers in Accounting Horizons on the interaction: “Academic accounting research and the standard setting process” by Katherine Schipper and “Accounting research: On the relevance of research to practice” by Jim and Todd Johnson.  The latter reveals how FASB uses research and lists some impediments to making greater use of such research, at least those impediments that existed in 1994.  I hope some of the impediments have lessened over time, but several of the insights seem just as on point today.  In Katherine’s article, she contrasts the tasks of standards setters and the goals of academic research.  She then points out several suggestions for how academics can contribute to the standard setting process.  I assign this article in my doctoral seminars, and I highly recommend it new researchers as well as more seasoned colleagues – it never hurts to remind ourselves of what we can do to make our research more relevant.

The Roundtable discussion reminded me of a couple of other articles related to research and standard setting.  I list them below and encourage other bloggers to add to this list.

Holthausen and Watts, “The Relevance of the Value-Relevance Literature for Financial Accounting Standard Setting,” JAE September 2001.  This article takes a dim view of whether capital markets research is of much use to standard setters.  One point they make is that standard setting involves more than knowing whether stock prices are associated with a given number that is reported in the financials.  They are absolutely correct.  But this does not make the actions of market participants irrelevant to standard setting, and thus empirical evidence of how people use accounting numbers seems relevant to the FASB. 

Barth, Beaver, and Landsman, “The relevance of the value-relevance literature for financial accounting standard setting: Another view,” JAE September 2001 is a response to the Holthausen and Watts paper.  They raise the point I mentioned above and provide other insights on why, in their opinion, capital markets research is relevant for standard setters.  These two papers are required reading in our capital markets seminars.  The papers help limit the number of times the students slap “and the results of my paper should contribute to standard setting” into their proposals without thinking critically about why standard setters would/should care.

I will close with an older but to me very motivational paper: “The relation of accounting research to teaching and practice: A positive view,” by Bill Kinney in the March 1989 Accounting Horizons.  Apparently, the AAA meeting that year had two speakers decrying the large gap between academic research and practice.  Bill provides a very good framework for thinking about how empirical evidence about how the world works can (and cannot) be useful to practitioners and how professors with a knowledge of research can provide better instruction for their students.  I use it in the first day of my intro PhD seminar to help students form a better of appreciation for their future profession.

So these are my top 5 research-meets-practice thought pieces.  I am interested to see what titles others might add.