When I was growing up, I remember telling my parents that I never would want to become an accountant or a teacher. I loved science, and my dream was to become a scientist; nevertheless, the grades on my high school transcript proved that I probably did not have the necessary skills set to become a scientist. At the prompting of my father, I enrolled as a business major in a liberal arts college in a rural Missouri town. I had chosen business marketing as my first undergraduate major and had purposefully tried to stay away from accounting. After taking my first marketing class, I decided to change my major to finance. I eventually graduated with both a B.A. and B.S. degrees in finance as well as a minor in economics.
Although I have had several internships in the finance and health care industries during my undergraduate study, I had a difficult time finding full-time employment after graduation. Not willing to move away from a good, local, Bible-teaching church and a great group of friends, I decided to explore the possibility of earning a master’s degree. After much discussion with the business faculty at my alma mater, I applied and subsequently was accepted into the Master of Accountancy program at Truman State University.
In the graduate program, I gradually developed a better understanding of accounting. I also was given my first teaching assignment as a graduate teaching/research assistant. While I did not engage in accounting research as a graduate assistant, I developed a great interest in teaching. I enjoyed interacting with my students, both in and outside of the classroom. My love for teaching never went away, even after I graduated with my master’s degree. I was employed as a staff accountant for an organization and I continued to teach as an adjunct accounting instructor at a local community college. My passion for teaching eventually led me to pursue my Ph.D. in accountancy years later at the University of North Texas.
“You must be one of those number guys.” “Maybe you can help me with my taxes sometime?” These are some of the common statements that people made when they found out that I was a college accounting professor. They often gave me a puzzled look when they learned that I conduct ongoing accounting research in addition to my teaching responsibility. To many, accounting is a black and white subject that appears to have little need for academic research.
I used to be one of the many who think accounting is merely an objective subject. I learned my debits and credits. I learned how to record accounting transactions and put together financial statements. I earned a master’s degree in accountancy and have passed the Certified Public Accountant (CPA) examination. I worked in accounting and have applied textbook knowledge that I have learned in college into practice. I have viewed accounting as a tool to help businesses keep track of their transactions. These were the perceptions that I had about accounting until I entered my Ph.D. study at the University of North Texas.
My mentor and the former accounting Ph.D. program director Dr. Barbara Merino at the University of North Texas have fundamentally changed my understanding of accounting. Dr. Merino is an internationally renowned ac- counting faculty who specializes in accounting history and critical perspectives in accounting. By studying under Dr. Merino I gradually have learned that accounting is, in fact, a highly subjective topic. My time in the Ph.D. program also has broadened my understanding of the impact of accounting in the areas of corporate social responsibility, corporate power, public policy and fraud investigation. With my newfound understanding of accounting, I began to see the value of accounting research. Studying under my professor, Dr. Mary B. Curtis (who eventually became my Ph.D. dissertation chair), I have learned valuable skills in conducting behavioral accounting research. Given my background with auditing and financial reporting, I decided to focus my research on judgment and decision-making in auditing, particularly in ways to improve auditors’ decision-making performances. I have since then engaged in behavioral accounting research with the emphasis in auditing.
Findings from a research project on judgment and decision-making in auditing that I have recently completed with Dr. Byron Pike (Minnesota State University, Mankato) and Dr. Mary B. Curtis (University of North Texas) will be published in The Accounting Review, a premier, peer-reviewed academic journal. We focus our study on the impact of biases on auditors’ decision-making performance related to analytical procedures. Analytical procedures are processes that help auditors in their understanding of their clients’ business. These procedures also help auditors identify potential risk areas in their planning of the audit. Prior research in accounting demonstrates that knowledge of unaudited account balances create bias in auditors’ expectations during analytical procedures; however, how these biases affect auditors’ subsequent investigations and their conclusions about the reasonableness of a particular account balance is less understood.
We used the selective accessibility model to examine the differences in analytical procedure performance when auditor expectations are formed with (versus without) knowledge of the client’s unaudited financial statement balances. The selective accessibility model was proposed and tested by psychology researchers as a means of explaining the anchoring phenomenon identified by famed psychologists Amos Tversky and Daniel Kahneman in 1974 and its impact on subsequent decisions. In a behavioral experimental setting, we found auditors who were given the unaudited balances favored supporting information that indicate the client’s account balance was reasonably stated. Conversely, auditors who formed expectations without the unaudited current-year figures were more willing to evaluate competing alternatives. They also demonstrated better judgment in identifying the most pertinent information and were significantly more likely to identify a material misstatement using an analytical procedure. Our findings should add to the body of accounting literature that addresses ways to help improve the quality of auditors’ decision-making perfor- mance.
Another primary area of my research interest, and the focus of my doctoral dissertation, is fraud risk assessment and fraud detection. Specifically, I am interested in developing tools that help auditors assess fraud risk more effectively. Most recently, my co-researchers and I have examined the differences in mindset between financial statement auditors and forensic specialists to identify factors that would improve an auditor’s ability to address potential fraud in company financial statements.
In addition to building a core research stream in judgment and decision-making in auditing, I actively am engaging in research projects that I find interesting and that I believe have the potential to contribute to contemporary theory and practice. I understand that it often is necessary to step outside of my comfort zone and to challenge myself with research that involves rigorous methodology; thus, I seek to maintain an open mind and to actively look for creative research ideas. For example, my co-researchers and I have published in the Journal of Forensic & Investigative Accounting, the Journal of Accounting Education, the Journal of International Accounting Research, as well as The CPA Journal. The practitioner-oriented research paper that was published in The CPA Journal focuses on staff auditors’ observations of questionable peer behavior. According to the University of St. Thomas Research Online statistics, this paper has obtained a total readership of 100 based on new online downloads.
Accounting is more than numbers. It is a science. It is a social science that can be researched. In a way, accounting has helped me to fulfill my childhood dream of becoming a scientist, a behavioral social scientist to be exact. I am thankful to be at a university that values both teaching and research. I feel that I am able of combining my passion for teaching and for research at St. Thomas. I am excited that I can inform my teaching through research and to enrich my students learning experience by incorporating pieces of my research into the classroom. At St. Thomas, I feel that I can challenge myself and change our world through my research and teaching.
Lawrence Chui is assistant professor of accounting in the Opus College of Business.
From Exemplars, a publication of the Grants and Research Office.
