Guest Editorial: research to inform Accounting Standard Setting

An extensive literature exists exploring the perceived “gap” between the interests and priorities of the accounting academic and practitioner communities (e.g. the papers in Evans et al. (2011) provide an overview of this debate). Parker et al. (2011, p. 6) suggest that the divide between academe and practice is wide: In the field of accounting there have been claims that research has become too far removed from the interests of the profession and practitioners. Researchers in turn point out the shortcomings of current professional practices. Indeed, some of the accounting research community go so far as to consider that many practical issues of concern to professional accountants do not warrant the attention of researchers! However, the relationship between academics and accounting practice is complex, and Barth (2015) has noted that the closeness of that relationship has waxed and waned over the past 50 years or so. When we, the guest editors, began our careers, it was quite common for researchers to publish in practitioner journals such as those of the major professional bodies. Established researchers presented their work in a manner that was understandable and relevant to practitioners (Brown, 1970), and those new to academia could develop their communication skills by writing for a non-academic audience (Howieson, 1989). While some academic work is still published in these outlets, it is less common, as the objectives of academics and those journals seem to have parted ways. In more recent times, journals such as the Accounting Research Journal and the Australian Accounting Review have sought to act as a bridge between the two communities. The “publish or perish” pressures that have been placed before academics have also helped to drive a wedge between academics and practitioners as the scholarly “highly ranked” journals are perceived to address “abstract” research questions and their studies are written in a language inaccessible to most practitioners (Tilt, 2010). Notwithstanding these concerns, accounting standard setters have increasingly turned to academic research as an input to their deliberations giving rise to a model of “evidence based policy making” (Leuz, 2018). In Australia, the Australian Accounting Standards Board (AASB) has been proactive in seeking to engage with the research output of accounting academics. Among other things,[1] in July 2015, the AASB established an Academic Advisory Panel[2] to encourage interaction with the academic community. Further, the AASB has to date held two successful Research Forums in which academic research directly relevant to the AASB’s deliberations has been presented to, and discussed by, panels of practitioners, standard setters, and academics[3]. A further initiative is this special issue of the Accounting Research Journal, “Research to Inform Accounting Standard Setting.” Relevant and high quality research matters to the AASB. One reason is simply to help meet its obligations under legislation. Section 231 of the Australian Securities and Investments Commission Act 2001 requires the AASB to “carry out a cost/benefit analysis of the impact of a proposed accounting standard before making or formulating the standard.” A cost/benefit analysis is required even if a proposed standard is an international standard. Although measuring the costs and benefits of standard setting is problematic (Schipper, 2010), academic research can help the AASB either anticipate potential consequences of a proposed standard or identify consequences once a standard has been implemented[4]. As such, quality academic research can inform the deliberations of the AASB more generally. Academic research has the additional advantage that it is perceived as an “independent” source relative to the inputs provided by other constituents who might be aligned with particular interest groups.