For associate professor of accounting Angela Davis, watching the proverbial light bulb turn on as undergraduate students take the tools they learned from introductory accounting classes and step into a deeper examination of accounting issues is one of the best parts of her job. And it doesn’t end at graduation.
“It’s fun because we are so connected to our alumni, we get to see them,” Davis said.
One such connection is the Accounting Circle, an affinity group of donors and alumni supporting accounting education at the University of Oregon.
“At our Accounting Circle advisory board meeting—held annually on a rotating basis at various firms—we saw three or four students who had graduated in the past five years working in their professional environment. That is always wonderful to see—to watch them develop over the years and see their path unfold.”
But the fun begins much earlier. In the classroom last year, Davis taught Accounting Measurement and Disclosure to master of accounting and MBA students. She says the work and educational experiences the master’s students bring to the classroom make for dynamic and interesting discussions. She especially likes bringing elements of her research to the curriculum and believes that exposing students to academic research broadens their understanding of financial disclosure and the role it plays in capital markets.
As a member of the Lundquist College’s celebrated Department of Accounting, Davis’s research generally focuses on managers’ voluntary disclosures. In a paper soon to be published in The Review of Accounting Studies, Davis and her coauthors investigate whether a manager’s tendency to be optimistic or pessimistic affects the tone used in a firm’s quarterly conference calls. They find that conference call tones reflect not only the current and future performance of a firm, but also this manager-specific characteristic.
“My work focuses on voluntary disclosure: Information that managers provide above and beyond just financial statements,” she explained. “When you look at it, a lot of it is qualitative or written text. For a long time researchers just pulled out the quantitative pieces from voluntary disclosures. As I saw research in other fields using textual analysis, I became interested in using that tool on financial disclosures. Because words—either written or spoken—are such an important piece of disclosure, it was exciting that tools had developed to help us get measures of this type of disclosure and to try to understand how investors are using it.”
Davis added that they also wondered if managers are strategic in their use of language when they communicate with investors. The answer is yes, but that is not all.
“I think for a long time people thought it was all about the numbers,” she said. “What we are learning is that a lot of thought goes into what managers say. And, in this latest paper, you see there is even some unintentional optimism.”
Originally from Boise, Idaho, Davis received her bachelor’s degree in accounting from the University of Idaho and her PhD from the University of Washington. Prior to pursuing her PhD, Davis worked as an auditor for KPMG in Portland and as a corporate accountant for Albertson’s in Boise.
Currently, Davis is working on a project related to corporate social responsibility and the payment of corporate taxes. She is also collaborating with UO PhD candidate (and Harvard Law School graduate) Joshua Cutler on a paper investigating the role that disclosure plays in securities litigation.
Davis has also published research coauthored with her husband, UO economics professor Jeremy Piger. Although they are not working on any current projects, they may collaborate again in the future.
“It makes for interesting dinner conversation,” she joked. “Our kids just love listening to us discuss research ideas.”