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FASB's Emerging Scholar Award program was established in 2021 to garner additional interest among young PhD candidates in research relevant to accounting standard-setting. Based on the submissions received, the award recognizes the proposed doctoral thesis topic judged to be of the highest quality in terms of potential for a rigorous contribution to an issue of interest to accounting standard-setting.
"Speaking as a standard-setter, academic research helps us understand how the world works today under whatever rules, and how we can make things work better tomorrow," said FASB member Christine Botosan, who played a major role in implementing the award. "Projects like Rachel's show us if we made the changes we intended and if it made the world a better place, and the accounting research community has had a really important role in helping us make better decisions."
According to Botosan, the board has a lot of different programs to stimulate relevant projects and improve FASB's consumption of academic research on standard-setting. Aiming to support academics at different stages of their careers, one of these initiatives is the
As students transition from their doctorate to their first faculty position, the program gives them greater insight into what goes on at FASB and stimulates ideas for academic research on topics that are of interest to the board. Many of the board's initiatives were targeting faculty at different levels, but Botosan said it didn't have anything for PhD students, who often have less financial means than faculty members.
"In terms of trying to move the needle and get people to think about doing something they might not be doing otherwise, the FASB is really trying to encourage research that's on point with its standards," said Botosan. "The earlier you can influence the way somebody's thinking about doing research and the kinds of questions that they're interested in asking, the longer you can have an effect on their careers."
The proposed doctoral thesis topic submissions from nominated candidates were reviewed by a five-person selection committee that included three current and former FASB post-doctoral fellows and two members of the FASB staff. Reviewing the projects of around seven to eight candidates, the reviewers then conduct interviews with the researchers to understand their motivations and provide feedback, which Botosan said allows students to establish a long-lasting relationship beyond the competition.
This year, Scott was the one who captured their attention.
A fourth-year doctoral student at the J.M. Tull School of Accounting at the University of Georgia's Terry College of Business, Scott started her career by working at a regional accounting firm for six years, where she specialized in audits of private companies and a few governmental entities. That's when she first realized the importance of accounting standards for companies and auditors, and she later gained experience in preparing financial statements when she left public accounting for a private company.
Scott quickly realized how standards changed from one industry to another, and what kind of skills standard-setters needed to create policies that could be implemented appropriately and fluently in every field. Eager to have a better understanding of where these standards came from and how they were constructed, she decided to join the academic community after 10 years of experience.
"I wanted to be in the classroom with the students, and being able to do research alongside that classroom experience has just been interesting and ever-changing, particularly when it comes to standard-setting," said Scott. "It makes me appreciate the FASB, and I'm feeling grateful to be able to contribute in some way to these standards that affect businesses of all sizes and all industries."
Scott always knew that she wanted to focus on standard-setting research as a PhD student, as she came in contact with several accounting standards throughout her career with far-reaching effects. In 2014, FASB
The core principle of the new standard was for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect what the company expected in exchange. The new standard also aimed to improve revenue disclosures, provide guidance for previously non-comprehensive transactions, such as contract modifications, and improve guidance for multiple-element arrangements.
"What I found particularly helpful in Rachel's work is that we're in the process of doing what we call post-implementation review on Topic 606, which allows us to get a lot of feedback from companies, investors and auditors," said Botosan. "But by its nature, all of that is anecdotal, because it's just people sharing their personal experiences, whereas academic research can look at a large sample and study what effects are being observed in the marketplace."
Scott started reading through the standard and tried identifying what FASB was trying to accomplish with this change, after years of asking for feedback and perfecting it. Her goal then became to figure out whether the organization accomplished its goals, and if there were some other effects they could be interested in knowing about. For example, one of Topic 606's objectives was to improve comparability between firms so people can make more informed decisions based on financial statements.
"We have a way in accounting research to measure comparability, and that's where I started," said Scott. "A lot of people are trying to answer this question right now and I also want to contribute in some way, so I read a little bit further into the standard and noticed specific ways that they were hoping firms would recognize revenue based on completing or fulfilling performance obligations."
Scott wanted to look at industries that were expected to be affected differently than others, such as the construction field, and examine whether FASB achieved improved comparability across the board. Did the change only affect certain companies, or maybe a few streams of revenue within them? Scott said the University of Georgia's continuous investment in its PhD students allows her to explore this question to the best of her abilities and have the resources she needs to conduct meaningful research.
Notably, she has been given access to a database to look at companies' financial information and receives support from an advisor who sits on the
"Revenue and generating profits across the board is one of the most important things within companies, and that's what they're most concerned about," said Scott. "I think it's important, at least from a financial statement perspective, for the reporting of those revenue streams to be very clear, and Topic 606 for revenue recognition helps define that trail of revenue."
Botosan said that winning the Emerging Scholar Award is a valuable addition to Scott's resume, which she expects to attract the attention of universities that might be looking for a faculty member. Additionally, she said the award was an opportunity for FASB to stay on top of research trends in the accounting field and to remain available for students, should they have any questions regarding the standard-setting process.
For students who might want to win the next Emerging Scholar award, Botosan recommends keeping abreast of what FASB has been doing these last few years.
"If you want to do standard-setting research, start reading the board's memos, watch the board's meetings, read the exposure draft, the final staff standard or the basis for its conclusions," said Botosan. "And what you'll find in there is just a ton of assumptions that board members made in arriving at a conclusion, and each of them is a testable prediction. We hope that we made the right ones, but if we didn't, it's important that we know that too, and I really commend Rachel for doing all those things for our field."
