Financial accounting: too practical for theory and too theoretical for practice?

Is financial accounting too practical for doing research? And is financial accounting research too theoretical for practice? Or put it in other words, can we do quality research within the field of financial reporting and is this research relevant to business?

Based on examples from recent research, Professor Maarten Pronk will answer these questions in his inaugural lecture in the auditorium of the Erasmus University Rotterdam, accepting the Chair in Accounting at Erasmus School of Economics. He will substantiate that the field of financial accounting is certainly not too practical for theory.

The question of whether financial accounting research is too theoretical for practice is much more intriguing according Professor Pronk. Of what use is financial accounting research to the business sector? Various academics have expressed criticism in recent years regarding the relevance of financial accounting research. The critique focuses on the use of research methodologies that are adequate to perform research based on historical data, but by which the research by definition obtains a reactive character. Those methodologies only enable research of situations that have already happened and often not until many years later, since sufficient data must be available. In recent years, financial accounting research has certainly generated important insights, but the reactive character of the research gives the financial accounting research limited relevance to current issues confronting the business sector. By consequence, resolution of current problems is largely left to the business sector, even though academics have unique knowledge and skills that would enable them to contribute significantly to resolving important issues.

During his inaugural lecture Maarten Pronk will discuss two initiatives that will help us at Erasmus School of Economics not to do any financial accounting research that is too theoretical for practice, i.e. the Ernst & Young Academic Network and the Erasmus Marketing & Accounting Research Center.

Maarten Pronk is (part time) full professor Accounting at Erasmus School of Economics. He earned his MSc at Erasmus University Rotterdam and his PhD at Tilburg University. He received part of his PhD training at the University of Iowa. His research is focused on the use and communication of financial reporting information. He has published in leading journals such as The Accounting Review, Journal of Accounting Research and Journal of Accounting Auditing and Finance. Maarten has been a member of the Accounting & Valuation Advisory Services group of PwC for five years and is as of February 2012 (part time) member of the professional practice department of Ernst & Young.

For more information, please contact Ronald de Groot, Communications Officer at the Erasmus School of Economics: e-mail: rdegroot@ese.eur.nl, phone: (+31)10-4081762, and mobile phone: (+31)6-53641846.