Consolidation entails group reporting according to International Financial Reporting Standards (IFRS) by capital-market oriented companies, i.e. those firms that have shares or bonds listed on a stock exchange. This field of research covers the whole process of group accounting: the acquisition of new businesses (Business Combinations), consolidation technique (Regulation and Procedures) and the identification of potential impairments of acquired assets (Impairment of Assets).
Business Combinations covers the accounting standard IFRS 3 which regulates how newly acquired businesses are to be integrated into group reporting structures. In this context, research, inter alia, examines managements’ motivation for choosing specific account treatments. Regulation and Procedures critically analyzes regulatory changes which determine how to prepare consolidated financial statements.
Possible consequences of a business combination are dealt with in the field “Impairment of Assets” which focuses on the identification and explanation of impairments of previously acquired businesses and assets.
Performance reporting investigates the presentation and disclosure of firms‘ profits and losses. In context of the Financial Statement Presentation Project both international accounting standard setters, the International Accounting Standards Board (IASB) and the US-American Financial Accounting Standards Board (FASB), aim at harmonizing and converging their accounting standards IAS 1 „Presentation of Financial Statements“ and SFAS 130 „Reporting Comprehensive Income“, respectively.
The project is about to make the information on profits and losses more useful for users of financial information. Beyond a critical assessment of the proposed regulations also the analysis of management discretion in reporting about a firm’s performance is subject to the Chair’s research.
The research field “Standard setting and enforcement” on the one hand deals with the emergence of accounting standards (Standard setting) and, on the other hand, with the legal enforcement of a compliant application of the standards (Enforcement).
In context of accounting standard’s emergence the behavior of regulators (like e.g. the International Accounting Standards Board (IASB)), corporations and auditors in this process is subject to research. Moreover, the institutional, organizational and procedural aspects of the standard setting process are examined with regard to lobbying potential.
Researching the enforcement of accounting standards is important because one still finds a significant number of financial reports that are erroneous. The Chair’s research aims at informing firms about the procedural aspects of the enforcement system in Germany and point to the most critical accounting issues. Based on these insights the Chair comes up with recommendations that may help companies to avoid erroneous financial reporting thus not being branded as a “firm with false accounts”.
The research areas are based on the practical relevance of the topics covered and reflect a demanding academic level. Current questions and problems of corporate practice are always taken into account or are the starting point of each research project conducted. In order to enhance that approach, many of our research projects are realized in collaboration with corporations and firms. This practical experience directly influences the content of our academic program.
In 2012, Dominic Detzen, who obtained his doctorate from HHL in July 2013 and now is an Assistant Professor at Vrije Universiteit Amsterdam, spent a semester as a visiting scholar at Rice University in Houston, Texas.
During the visit, he pursued two main objectives: On one hand, he participated in two semester-long accounting seminars – “Introduction to Accounting Research”, taught by K. Ramesh, professor of accounting, and “Applied Empirical Methods in Accounting” by Brian Rountree, associate professor at Rice.
Both lecturers are extensively published and highly-regarded accounting researchers, who brought their unique insights into the courses. On the other hand, Dominic Detzen made use of the extensive library, which Professor Stephen Zeff, arguably the best known researcher in the field of accounting history, holds.
Based on this large collection of books, journals and official publications by accounting standard setting bodies worldwide, Dominic Detzen drafted a research article titled “Inflation, Exchange Rates and the Conceptual Framework: The FASB’s Debates from 1973-1984”, which is part of his dissertation work.
Besides the direct support of Professors Ramesh, Rountree and Zeff, Dominic Detzen acknowledges the engaging research environment at Rice and the interaction with the school’s world-class faculty as well as doctoral students at an institution that is truly dedicated to advancing accounting thought and practice.