Mays Impacts

Duke University’s Katherine Schipper illuminated the importance of company intent in accounting when she visited Mays Business School as a part of the 2011 Dean’s Distinguished Scholar Lecture Series.

The purpose of the lecture series, as Dean Jerry Strawser puts it, is to bring someone from around the U.S. and recognize them not for being published, not for serving on prestigious boards and not for teaching at esteemed institutions (although the scholars have done all three), but to recognize them for changing their fields of business.

2011 Dean’s Distinguished Scholar Katherine Schipper met with a select group of Mays students following her public lecture.

And when it comes to accounting, calling Schipper an “expert” would be an understatement.

She holds a bachelor’s degree from the University of Dayton, MBA, MA and PhD degrees from the University of Chicago, and an honorary degree from Notre Dame. She is the past president of the American Accounting Association, as well as the former editor of the Journal of Accounting Research, a position she held for 15 years. She has published research papers on topics such as financial reporting, corporation finance and corporate governance, and frequently speaks on matters regarding international accounting convergence. She served a five-year tenure on the Financial Accounting Standards Board (FASB), tackling some of the most complex accounting issues and bringing research to bear on accounting policy issues. As if that wasn’t enough, Schipper is the 81st member of the Accounting Hall of Fame—the first woman to be inducted.

Schipper is currently the Thomas F. Keller Professor at Duke University’s Fuqua School of Business. A gifted instructor, she consistently inspires her students to demand accuracy, ethical behavior, and an endless pursuit of financial knowledge in their future accounting careers.

“More than her accolades, Dr. Katherine Schipper changes the way we think about accounting and the way we think about the economy,” Strawser says.

Schipper’s presentation to Mays students confirmed her accounting expertise. She spoke on the topic of “intent-based accounting,” focusing on the impact of management’s intent in a company’s operation of their business strategy. Accounting elements such as the timing of recognition, asset classification, disaggregated disclosures, and short-term debt classification are determined by the intent of management, and accountants must be keenly aware of how this intent correlates with IFRS/US GAAP standards before they tie their signatures to any financial statements.

For example, if management decides to purchase a competitor’s brand and didn’t intend to use or sell it, the brand would not be considered an asset, according to IFRS 3, says Schipper.

Schipper delved deep into the issue of intent-based accounting, bringing to light questions and situations that are often overlooked. She concluded by reemphasizing the importance of understanding management’s intent in reporting entries.

She says those in her field are unique. “Accountants wake up in the morning and we say to ourselves, “What if there’s an unrecognized liability out there? I better get down there and find out,'” Schipper says. “We don’t ask, “What if there’s an unrecognized asset?'”