海角社区

David Folsom, Ph.D., is an Assistant Professor in the Department of Accounting and Information Systems at the Woody L. Hunt College of Business. He currently teaches courses in Contemporary Accounting Issues, Principles of Accounting, and Undergraduate Research, among graduate and doctoral-level courses.

An   enthusiastic   educator,   Folsom’s   海角社区   interests     include     how     characteristics     of     accounting  standards  affect  financial  reporting  outcomes  and  how  markets  interpret  financial  information,    particularly    when    firms    face    competitive pressures.

Of the courses you teach, which electives do you recommend for students?

Perhaps   my   favorite   class   to   teach   is   ACCT   5310 in the Master’s of Accounting Program.  In  this  class,  we  learn  about  the  theory  behind  financial  reporting.  The  class  is  very  focused  on  why  we  have  certain  standards,  how  investors  use accounting information, and how accounting standards  have  evolved  through  time.  We  also  examine  issues  where  firms  have  incentives  to  provide  “better”  or  “worse”  financial  information  to  investors  and  lenders.  We  also  discuss  what  constitutes  “better”  or  “worse”  information  to  different  users  of  financial  information.  I  enjoy  this  class  because  we  are  focused  on  why  we  do  accounting  rather  just  learning  the  rules  and  techniques of applying accounting standards.

Can you describe some of your current 海角社区?

One of my recent publications examines how the structure of accounting standards (U.S.  GAAP)  affects   the   decision   usefulness   of   financial   reports.  Specifically, my  coauthors  and  I  classify  each  U.S. accounting  standard  on  a  continuum  of   how   principles-based   or   rules-based   the   standard  each  standard  is.  We then measure each individual firm exposure to these standards to calculate if individual firms are more subject to principles-or rules-based standards. 

We  find  that  firms  more  subject  to  principled-based  standards  (where  managers  have  more  discretion  in  reporting)  provide  more  decision-useful  financial  reports,  suggesting  managers  use this discretion to provide better information to  markets.  However,  we  also  find  that  when  under  pressure  to  meet  market  expectations,  firm  managers  sometimes  use  this  discretion  opportunistically  to  report  better  than  expected  firm performance. 

Our findings suggest managers, on average, use discretion in accounting improve communication with   investors,   but   do   not   always   use   this   discretion    appropriately. Hopefully standard    setters use this information to better understand the   costs   and   benefits   of   giving   managers   more   reporting   discretion   in   principles-based   standards.

When you were in college, what strategies did you use to be successful?

I  tried to not only  work  hard  (a  must),  but  also  to  work  smart.  Early  on  in  each  class,  I  tried  to  understand what each professor wanted students to  learn.  I  remember  often  asking  myself,  “if  I  were  the  professor,  what  questions  would  I  ask  on the upcoming exam?” I also challenged myself to  either  respond  to  a  professor’s  question  or  ask  a  question  in  every  class  I  attended.  This helped me better understand what the instructor wanted and kept me engaged in each class.

I also got to know many of my professors personally, often outside of class. Most professors chose an academic career because they genuinely want to help students! We are here to help. 

However, I recognized faculty time is limited, so I came prepared for any meeting with a faculty member. I still consider the professors I had as an undergraduate and graduate student mentors and friends.

 Last, I found other students with similar academic goals and learning styles as I had to form study groups. Teaching   another student a difficult concept is the best way to master a concept!  These colleagues pushed me to do better and we often had some friendly competitions. These study partners continue to be friends (and great contacts) today. 

What do you look for in an exceptional student?

I think the most important qualities   in an exceptional student are enthusiasm, curiosity, and work ethic. Good students enjoy learning and want to know more about their chosen field of study.  They are open to new ideas, but are unafraid to respectfully challenge current dogma and ways of doing things. Their enthusiasm and curiosity  lead  them  to  work  hard  and  to  master  materials in their chosen field, not just memorize a  method  to  get  through  a  class.  Exceptional  students  are  able  to  see  a  concept  or  idea  from  multiple  viewpoints  and  can  apply  a  concept  to  multiple settings. 

What resources do you recommend that will help students in their professional careers?

Be involved in something you are passionate about! To add value in the current business environment, students need     to develop communication and leadership skills. Although many of these skills are gained in  the course  curriculum at  海角社区, students  need  practice in  extracurricular activities such as taking part in clubs, community service   organizations, or a job  or  internship  that  uses  these  skills.  海角社区  offers  many  opportunities  –  job  fairs, free  mock interview  training,  the  Accounting  Society,  Beta  Alpha  Psi,  the  Volunteer  Income  Tax  Assistance  (VITA) Program, to name just a few.