Professor Katherine Schipper, Former FASB Member, Presents Paper at LSU

Stanford University Accounting Professor Charles Lee Katherine Schipper

February 20, 2008

BATON ROUGE - The LSU E. J. Ourso College of Business’ Department of Accounting today launched the first in a series of planned research workshops by hosting Professor Katherine Schipper of Duke University. Schipper led the event by presenting her coauthored work, “Direct and Mediated Associations Among Earnings Quality, Information Asymmetry and the Cost of Equity.”
Designed to bring together researchers from Louisiana regional universities, the workshop included accounting professors and doctoral students from LSU, Louisiana Tech University, Southeastern Louisiana University, Tulane University and Loyola University (New Orleans). Also in attendance were faculty and doctoral students from the E. J. Ourso College’s Department of Finance, college administrators and representatives from the accounting and business advisory firm of Postlethwaite and Netterville.
Schipper, the Thomas F. Keller Professor of Accounting at Duke University’s Fuqua School of Business, serves as an editor of the Review of Accounting Studies and recently rejoined her institution’s faculty after serving as a member of the Financial Accounting Standards Board from 2001 to 2006. She teamed with fellow faculty members Frank Ecker and Per Olsson, as well as Neil Bhattacharya of Southern Methodist University, to compose the paper presented at LSU. 
“The theory presented by Professor Schipper uses path analysis to investigate the direct and indirect links between three measures of earnings quality and the cost of equity capital,” Department of Accounting Associate Professor Jacquelyn Sue Moffit said. “Their investigation is motivated by analytical predictions that specify both a direct link – precision of information – and an indirect link – distribution of information – that is mediated by information asymmetry, but the analytical predictions were unable to suggest which link would be more important.

“Professor Schipper’s research focused on providing empirical evidence on the nature of the relationship between information risk and investors’ resource allocation decisions; i.e., which is more important, the precision of information or equal access to information? They suggest both a direct path from earnings quality to the cost of equity and an indirect path that is mediated by information asymmetry, with the weight of the evidence favoring the direct path as the more important.  
Schipper, who has served as the editor of the Journal of Accounting Research, has previously been honored as the American Accounting Association Educator of the Year and served as the president of the AAA as well. In 2007, she became the first woman to be inducted into the Accounting Hall of Fame, which has inducted just 81 members since its inception.
The Department of Accounting’s next regional accounting workshop is scheduled for this fall, with additional workshops planned in successive semesters. Future topics include research in auditing and analyst forecasts.  
For information about the E. J. Ourso College’s Department of Accounting, click here.


Angela McBride
LSU E. J. Ourso College of Business