The Badger Account

A message from Terry Warfield, chair of the Department of Accounting and Information Systems

The Badger Account Year in Review

News about our students and faculty—their activities, awards and accomplishments

2013–2014

From ethics and professionalism to the global mindset initiative

DEPARTMENT OF

ACCOUNTING & INFORMATION SYSTEMS

LETTER FROM THE CHAIR

TERRY WARFIELD PwC Professor in Accounting at the Wisconsin School of Business and Chair of the Department of Accounting and Information Systems

Welcome to The Badger Account 2014. We have lots of news to report! I hope you’ll enjoy catching up and following the happenings in the department by checking out our website: bus.wisc.edu/knowledge-expertise/academicdepartments/accounting In our continuing effort to support the mission of the Wisconsin School of Business at the University of Wisconsin–Madison to provide premium learning experiences to our students, we conducted a comprehensive curriculum review. We articulated our outcomes around the themes of knowledge, doing, being, inspiring, and networking (KDBINTM).

Our execution on these elements was clearly demonstrated: in the curriculum (knowing); our cocurricular activities like the Future Is Now, the Ethics and Professionalism Program, case competitions, and internships (doing, being, inspiring, and networking); our active student groups (being and networking); and our active engagement with alumni (networking).

$25,000 GRANT

Using a $25,000 grant from PwC, we developed an innovative capstone course that allows students to complete a module-based, three-credit class over the course of a full graduate year. And a major grant from EY has allowed us to launch a set of curricular and co-

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curricular elements within the Global Mindset Leaders Program, designed to introduce students to cultural and social diversity in business.

There have been some transitions and important recognitions in the department this past year.

• We had another successful recruiting year, hiring four new faculty (Dereck Barr, Emily Griffith, Dan Lynch, and Logan Steele) to bolster our research and teaching ranks in the audit, financial reporting, and tax areas.

• Senior Lecturer Tom Tierney (BBA ’72) retired after 15+ years of outstanding service in our tax and financial reporting curriculum areas.

The faculty recognized Tom’s contributions by awarding him emeritus status. With Tom’s departure, lecturers Lindsay Acker (BBA ’04, MAcc ’05) and Russell Epp have increased their teaching contributions.

• Professor Brian Mayhew (BBA ’89) was promoted to full professor and named the Arthur Andersen Alumni Professor in recognition of his teaching, research, and service contributions. Well done, Brian!

• Professor Stacie Laplante (who joined the faculty in 2013) was promoted to associate professor with tenure. In recognition of her contributions in the tax field, Stacie was named the David J. Lesar Chair in Accounting.

• Kristen Fuhremann received the School of Business Outstanding Academic Staff Teaching Award.

• We earned a top-three position in CPA exam pass rates and first place (for programs with 15 or fewer faculty, 17th overall) in Public Accounting Report’s ranking of master’s programs.

• Our students had strong showings in the KPMG International Case Competition, the PwC xTax competition, and the Deloitte Audit Case Competition, second place at the NABA National case competition, and first place in the Deloitte tax competition.

• We continue to place postgraduate interns at the Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB). This summer Liesl Seiser (MAcc ’14) began work at the GASB and Andrea Willette (MAcc ’14) began work at the FASB, continuing our strong tradition of service to standard-setting boards.

Our doctoral program is key to our research mission.

Indeed, our recent new hires commented that the strength of our program and its students were a key factor in choosing Wisconsin. This year, we admitted three new students, and several of our Ph.D. students have garnered national recognition at research conferences. The Ph.D. program has been bolstered by our recruitment of Accounting Doctoral Scholars (ADS). Sponsored by several public accounting firms and the American Institute of Certified Public Accountants (AICPA), ADS provides support for students leaving public accounting to pursue careers as auditing or tax professors. The ADS program ended last year, so we will be looking to raise funds to replace the support it provided.

Finally, I’d like to express my gratitude for the support of our Advisory Board and to specially recognize the long-standing service of Jay Price (BBA ’49), retired Andersen partner, and Roger Schroeder (BBA ’64), retired KPMG partner, whose counsel and contributions over the years have been most helpful.

Welcome to our newest board members—Isabel Bartos (BBA ’10, MAcc ’11) and Amy Mutziger (BBA ’02, MAcc ’03).

I am very proud of our accomplishments as well as of our outstanding students. Our success is due in large part to the contributions of our alumni and friends, and our future depends on your continued support.

If you value your experience at Wisconsin, and feel that you have benefited from your experience here, I hope you will consider making a contribution to the Department of Accounting and Information Systems at: Thank you! bit.ly/1DeW4Pm

Terry Warfield

PwC Professor in Accounting Department of Accounting and Information Systems Chair Wisconsin School of Business

We continue to make progress on our strategic priorities, particularly increasing enrollment in the undergraduate and master’s programs. I’m happy to report that we have nearly 490 upper division accounting majors this year—10 percent more than two years ago—while maintaining the high quality of our incoming students. As a result, we have the largest pledge class in Beta Alpha Psi and the largest number of admissions to our Master of Accountancy (MAcc) program ever (117 this past spring). We aim to continue increasing enrollment as well as diversity in the student population. Given the trends in growth, we could not be more gratified by our success in attracting tenure-track faculty to provide depth in our research and teaching capacity.

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Ph.D. PROGRAM

The Ph.D. program is key to the vibrancy of our research environment.

Abbie Daly (first row, second from the left in the photo below) and Cass Hausserman (first row, second from the right) both graduated from the program in 2014.

Abbie accepted a faculty position with the University of Wisconsin–Whitewater and Cass accepted a position with Portland State University. We wish them

A warm hello to three new students in the doctoral program. Kayla Nordgren, Clay Partridge, and Dimitri Yatsenko joined the 12 students already in the program. Welcome!

both the best of luck in their new positions.

WSB Ph.D. graduates and advisors at the Ph.D. hooding ceremony

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Ph.D. STUDENT UPDATES

AMANDA CONVERY Amanda Convery is in her fifth year in the Ph.D. program.

She’s researching the impact of a firm’s regulatory environment on its financial reporting system and the role of that information in capital markets. Her dissertation investigates two questions. First, she examines the influence of government contracting and its regulations on the quality of firms’ internal control and financial reporting systems. Second, she uses disclosures in the government contracting setting to test whether disaggregated revenue disclosures that will be required by the FASB’s new revenue standard are relevant in forecasting firm performance. Prior to pursuing her doctorate, Amanda worked as a lead financial analyst in financial reporting for the Federal Reserve Bank of Philadelphia. As a CPA, she worked as an auditor for nonprofit firms for Goldenberg Rosenthal, LLP, a regional public accounting firm in the Philadelphia area. She received her MBA from Villanova University and her BBA from Temple University. Amanda expects to graduate in Spring 2015.

PATRICK HURLEY Patrick Hurley joined the Ph.D. program in Fall 2010 and anticipates graduating in May 2015. He received both a B.S. in accounting and information systems and a B.S. in finance from Virginia Tech. His career began as an auditor in KPMG’s Washington, D.C., office, working primarily on clients within the Department of Homeland Security.

Patrick’s research interests include using psychological theories to investigate auditors’ judgment and decisionmaking processes. He also enjoys designing and running economic experiments to explore market-level methods of improving audit quality. Specific interests include audit quality, auditors’ cognitive processing, and auditor independence.

RACHEL MARTIN

SEAN DENNIS Sean Dennis graduated from the University of Notre Dame with a BBA in accounting in 2005 and an MS in accountancy in 2006. He then worked in KPMG’s financial services audit practice in Charlotte, NC. Joining the Ph.D. program as an Accounting Doctoral Scholar in 2010, his interest lies in how auditors can enhance the value they add to the financial reporting process. His current research projects examine auditing complex estimates, earnings management, the auditor’s reporting model, and fraud brainstorming. Sean’s teaching experience includes both advanced auditing and introductory financial accounting.

Sean expects to graduate in Spring 2015.

Rachel Martin received her bachelor’s and master’s degrees in accounting from the University of Arkansas, Fayetteville. She then took a position with the Wal-Mart home office in their strategy and finance division where her experience consisted of market and product analysis and strategic planning. After several years with Wal-Mart, she moved to Madison to pursue a Ph.D. in accounting.

Her research interests fall within managerial accounting with a focus on evaluation and compensation decisions and the employee and market behaviors resulting from those decisions. Rachel expects to graduate in Fall 2015.

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Ph.D. STUDENT UPDATES

MATT KAUFMAN Matt Kaufman is a fourth-year Ph.D. student with an interest in operational reporting and managerial control. He is currently investigating the contribution of accounting staff to the design and maintenance of operational processes through the work of a firm’s internal audit function. With a background in both public accounting and corporate finance, he hopes to bring accounting practice into the classroom through applied research. He received an MBA from the University of Oregon and a BA from George Fox University. Matt expects to graduate in Spring 2016.

XIAO XIAO Xiao got her B.A. in finance and M.A. in economics from Peking University in China. She joined the Ph.D. program in 2011 and is expected to graduate in 2016. She is interested in empirical financial accounting research.

AMY TEGELER

KARA OBERMIRE Kara Obermire joined the Ph.D. program in Fall 2011 and expects to graduate in Spring 2016. Kara received both her B.S. in business administration and her MAcc from the University of Montana. She began her career as an auditor in Deloitte’s Seattle office, primarily working on public clients in the financial services industry. Kara then spent two years as an adjunct instructor and lecturer of managerial and financial accounting at the University of Montana and The Ohio State University. Her research interests include using experimental economics to examine audit quality at the market level and exploring individuals’ judgments and decisions in an auditing context.

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Amy Tegeler joined the University of Wisconsin Ph.D. program as an Accounting Doctoral Scholar in 2012. She graduated with a BBA in accounting from the College of William and Mary in 2004 and worked at KPMG LLP in Washington, D.C., as a senior manager in the audit practice. Amy expects to complete the Ph.D. program in 2017. Her research interests involve studying auditor behavior using experimental methods, specifically as it relates to the structure and implementation of regulatory practices associated with the PCAOB.

ERIC CONDIE Eric Condie began the Ph.D. program in 2012 as an Accounting Doctoral Scholar. He received his B.S. degree in accounting from Brigham Young University in 2000 and his MBA from Utah State University in 2003. Prior to joining the Ph.D. program, Eric was an audit senior manager with KPMG in Orange County, California, serving clients in the real estate, manufacturing, and asset management industries. His research focuses on factors contributing to, and consequences of, financial reporting fraud, including auditor detection methods and scenarios involving significant and complex auditor decision making.

Eric expects to complete the Ph.D. program in 2017.

ZACH KOWALESKI Zach Kowaleski is a second-year Ph.D. student with an interest in using experimental and archival methods to examine audit and financial reporting issues. A graduate of the UW–Madison IMAcc program (BBA ’08, MAcc ’09), Zach went on to work for PwC as an auditor in the Milwaukee and Minneapolis offices. He expects to complete the Ph.D. program in 2018.

ABE CARR

JASON CHOI Jason Choi graduated from Washington University in St. Louis in 2009 with a degree in economics and a second major in finance. He then served in the U.S. Army as a military intelligence officer with the 1st Infantry Division and served one tour in Iraq. He is currently a second-year Ph.D. student with interests in financial accounting and financial market efficiency and expects to complete the program in 2018.

Abe Carr graduated in 2009 from Brigham Young University with a BS in accounting and a Master of Accountancy degree. Before joining the Ph.D. program in Fall 2013, he worked in the Washington, D.C., area for Deloitte in the commercial audit practice, serving clients in the telecommunications industry. He is a licensed CPA in the state of Virginia and has research interests in audit using both experimental and archival methods. Abe expects to complete the Ph.D. program in 2018.

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AWARDS BANQUET

The Department of Accounting and Information Systems, along with the Sigma chapter of Beta Alpha Psi, held its annual awards banquet in September on the UW–Madison campus.

Scholarship recipients and fellowships for the 2014– 2015 school year and outstanding teaching assistants and seniors from the 2013–2014 academic year were honored. The organizations and individuals who generously support the program and its students were also recognized.

The Douglas Clarke Memorial Teaching Award for outstanding Ph.D. teaching assistants was awarded to Amanda Convery and Sean Dennis.

The Teaching Assistant: Excellence in Teaching Award for outstanding MAcc teaching assistants was awarded to Salman Aasi (MAcc ’14) and Zachary Rockers (MAcc ’14).

Jean Bedard (above left, MS ’79, Ph.D. ’85) received the 2014 Distinguished Accounting Alumnus award (presented by Professor Karla Johnstone).

Jean C. Bedard is the Timothy B. Harbert Professor of Accounting in the Department of Accountancy at Bentley University. Professor Bedard’s research

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These top-10 accounting graduates were recognized for their academic accomplishments: 1. Matthew Baker 2. David Carswell 3. Thomas Fine 4. Matt Frankel 5. Brian Ip

6. Andrew Moss 7. Katie Poffenberger 8. Emily Rosenbaum 9. Leichen Zheng 10. Shengjie Zhu

interests include individual auditor decision quality, risk assessment and risk adjustment in audit engagements, and the effects of information technology on the audit process. She has over 80 scholarly and professional publications and has taught auditing and financial accounting at the undergraduate, master’s, and Ph.D. levels. Professor Bedard has served as vice president–publications of the American Accounting Association (AAA) as well as president, secretary, and historian of the AAA’s Auditing Section, which recognized her as Outstanding Educator in 2012. Her work experience outside academia includes public accounting and management of public health services.

STUDENT FAREWELL AND WELCOME On a beautiful sunny Saturday, May 18, 101 MAcc students became Wisconsin Business alumni.

After an energetic and exciting commencement ceremony at Camp Randall, graduates and their families celebrated at a reception hosted by the Department of Accounting at Memorial Union.

Several Accounting faculty members joined Dean François Ortalo-Magné in reflecting on the students’ accomplishments and wishing them success.

The department welcomes a new group into the twoyear graduate-only Master of Accountancy (GMAcc) program.

The Department is excited to welcome 92 MAcc graduate students this fall.

Students will have the opportunity to take courses in accounting theory, strategic cost management, advanced audit and assurance, and corporate tax as well as a new capstone course. Designed to allow students to complete a module-based, three-credit class over the course of the academic year, the capstone course uses an evidenced-based practice model and offers a unique opportunity to address new topics as well as expand on those introduced in prior coursework. Modules will include topics such as accounting research, global mindset in the accounting profession, accounting changes, analytics, taxes and decision making, and governmental and not-for-profit accounting.

MAcc Commencement Campaign Committee members (L to R) (Front) Danielle McMahon, Sara Nissen, Charis Wong, Kimberly Connor, (Back) Joshua Usem, Tyler Brown, Salman Aasi

The MAcc graduates demonstrated their pride as Business Badgers by participating in the second annual MAcc Commencement Campaign. With guidance from the UW Foundation, the peer-driven campaign was a success, with 79% of the graduates pledging to give back to the school.

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STUDENT GROUP UPDATES

Continuing its tradition of success, the honorary accounting organization Beta Alpha Psi was awarded the Distinguished Chapter status by the national organization.

With 180 members and pledges during the 2013–2014 academic year, Beta members contributed 1,320 hours of community service and raised $18,000 to help fund student scholarships and chapter activities.

Members of the Beta Alpha Psi, Sigma Chapter, visit the Minneapolis office of KPMG during a chapter trip to Minnesota

The Sigma chapter welcomed new faculty advisor Tony Greig, who took over for Ann O’Brien.

Ann served as faculty advisor for Beta Alpha Psi for six years and spent countless hours providing leadership, oversight, guidance, and encouragement to members.

Beta student leadership recognized Ann’s service with a special plaque.

Beta Alpha Psi past President Drew Moss (BBA ’14) presents Ann O’Brien with a plaque for her service

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INSTITUTE OF MANAGEMENT ACCOUNTANTS

NATIONAL ASSOCIATION OF BLACK ACCOUNTANTS

The University of Wisconsin–Madison student chapter of the Institute of Management Accountants (IMA) enjoyed another successful year under the leadership of faculty member Russell Epp. Membership grew to 90 students with the promotion of new initiatives, including a mentoring program and further partnership with the professional chapter of IMA. Members held meetings with General Mills, Hormel, General Electric, and Siemens.

A group of driven students initiated a University of Wisconsin–Madison student chapter of the National Association of Black Accountants (NABA). With support from faculty member Kristen Fuhremann and the Milwaukee professional NABA chapter, students held organizing meetings and professional development meetings with firm sponsors. NABA members attended the Fall 2013 Central Regional Student Conference in Detroit and the annual professional NABA conference in Washington, D.C., where they had the opportunity to network with other NABA members, attend career fairs, interview for internships, and develop professionally.

ACCOUNTING ALUMNI CHOSEN FOR PRESTIGIOUS INTERNSHIPS

Wisconsin School of Business MAcc graduates Liesl Seiser and Andrea Willette were recently awarded postgraduate technical assistant (PTA) internships at the Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB), respectively.

Seiser and Willette will be assigned to major agenda projects or to short-term practice and implementation issues. PTAs are involved in all phases of their assigned projects, including analyzing documents, reviewing published research, preparing memorandums on technical issues, and drafting due process documents.

Both Seiser and Willette began their one-year appointments in July 2014.

Liesl Seiser and Andrea Willette celebrating their graduation from the MAcc program

The Wisconsin MAcc program has a long tradition of sending students to PTA positions within the FASB. Seiser will be the first MAcc student to intern with the GASB. Recent FASB interns include Alex Debbink (BBA ’12, MAcc ’13) and Kate Konetzke (BBA ’12, MAcc ’13).

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CASE COMPETITIONS

Each year students have the opportunity to compete in case competitions, where they’re able to polish their analytical, teamwork, research, and presentation skills, network with professionals, and get a feel for the issues they will face upon entering the profession.

Our students performed well in several competitions, including the PwC Extreme Tax competition, KPMG International Case Competition, and the Deloitte Audit Case Competition, and had notable finishes in the NABA National Case Competition and Deloitte FanTAXtic Case Competition.

NABA JUNE 2014 NATIONAL CASE COMPETITION A group of UW–Madison pre-business students took second place in the 2014 KPMG/NABA Case Study Competition at the national conference of the National Association of Black Accountants in Washington, D.C. The team, comprised of freshmen Risharda Bond, Noro Datiri, and Alex Esuoso as well as sophomore Lauren Wundrock, was the first from UW–Madison to participate in the competition.

(L to R) Alex Esuoso, Risharda Bond, Kristen Fuhremann, Lauren Wundrock, and Noro Datiri celebrate the team’s second-place finish

“This group of students came together as a true team and delivered a compelling and creative solution to a very complex case,” said Kristen Fuhremann, the students’ faculty advisor. “They demonstrated poise and professionalism in their delivery and overall represented the University of Wisconsin in a very positive way.”

The students had three hours to prepare a 20-minute PowerPoint presentation with their solution to the given case. After their presentation and a 10-minute Q&A, the team advanced to the next round and presented their solution to a new panel of judges. Final results were revealed at the NABA Awards Gala, and each member of the team received a $300 scholarship from KPMG.

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DELOITTE JANUARY 2014 FANTAXTIC CASE COMPETITION Students Cole Bjornstad and Laura Rudolph (sophomores), Troy Henkel, Scott Papez, and Emily Rosenbaum (MAcc students), along with faculty advisor Stacie Laplante, represented the Wisconsin School of Business at Deloitte’s National FanTAXtic Competition at Deloitte University in Dallas. After winning a regional competition in Milwaukee this fall, the team competed against eight other teams from around the country and took home first place!

(L to R) Scott Papez, Emily Rosenbaum, Troy Helkel, Laura Rudolph, Cole Bjornstad, and Stacie Laplante celebrate their first-place finish

The team’s ability to work together was crucial in the two-day competition that included writing a technical memo and presenting recommendations to the president and chairman of the board of a fictitious client. Professor Laplante notes: “One of the most rewarding observations I had was seeing how the senior students helped the sophomores get up to speed in such a technical area, and then seeing them all perform so well. In fact, after the competition, the judges said that they could not really tell which team members were sophomores.”

STUDENT RECOGNITION

3RD/1ST Did you know that the Department of Accounting and Information Systems ranks third in the country for first-time pass rates on the CPA exam?

ELIJAH WATT SELLS AWARD Six Wisconsin School of Business students, among the top-scoring CPA test takers in the nation in 2013, have received the prestigious Elijah Watt Sells Award, given by the American Institute of CPAs (AICPA) for outstanding performance on the Uniform CPA Examination.

Of the 94,000+ people who sat for the exam, 55 met the criteria for the Sells award: a score above 95.5 across the four exam sections. With six award winners, the University of Wisconsin–Madison leads the nation.

“We are proud of our graduates and their outstanding performance on the CPA exam,” said Terry Warfield, chair of the Accounting and Information Systems department. “This most recent Sells Award recognition continues our tradition of strong performance on the CPA exam and provides an important external validation of the quality of the accounting program at the University of Wisconsin.”

Named for one of the country’s first CPAs, the Elijah Watt Sells Award program was established by the AICPA in 1923. Sells was active in the establishment of the AICPA and played a key role in advancing professional education in the field.

The Elijah Watt Sells Award winners from the Wisconsin School of Business are: • Nathan Chivers (BBA ’12, MAcc ’13). Chivers is from Lakeville, Minn., and is employed by Triple Tree in Minneapolis.

• Patrick Ditter (BBA ’12, MAcc ’13). Ditter is from Brookfield, Wis., and is employed by UBS Investment Bank in New York City.

• Michael Finkel (BBA ’11, MAcc ’12). Finkel is from Livingston, N.J., and is employed by Goldman Sachs in New York City.

• Daniel Rubin (BBA ’12, MAcc ’13). Rubin is from Wynnewood, Pa., and is employed by PwC in New York City.

• Gregory Simbro (BBA ’12, MAcc ’13). Simbro is from Shorewood, Wis., and is employed by BDO USA in San Francisco.

• Matthew Zimdars (BBA ’13). Zimdars is from Madison, Wis., and is employed by PwC in Milwaukee.

WICPA SCHOLARSHIPS Two IMAcc students—Thomas Fine and Zachary Boehmke—were honored with scholarships from the Wisconsin Institute of Certified Public Accountants (WICPA) Education Foundation, which recognizes fifth-year students working toward the 150-hour requirement to sit for the CPA Exam. The LeRoy Schmidt 150 Hour Accounting Scholarship is based on academic achievement, a personal statement, and letters of recommendation. Boehmke, from Waukesha, Wis., received $2,500, and Fine, from Neenah, Wis., received $5,000.

PCAOB SCHOLARSHIP IMAcc student Shengjie Zhu was honored with a scholarship from the Public Company Accounting Oversight Board (PCAOB). The $10,000 award is given for academic achievement to a student pursuing a Master of Accountancy degree with an interest in joining the auditing profession.

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ETHICS AND PROFESSIONALISM PROGRAM

The Howard Carver Ethics and Professionalism Program hosted two featured speakers during the 2013–2014 academic year.

For news on the Howard Carver Ethics and Professionalism Program student initiatives and its statement of values, see our website at: go.wisc.edu/aisethics

DAN KELLY, AMERICAN FAMILY CFO Students involved in the Ethics and Professionalism Program invited accounting program alum Dan Kelly (BBA ’84, MBA ’85), CFO of American Family Insurance and member of the Dean’s Advisory Board, to talk to them about “real-world” ethics. Mr. Kelly discussed some of the ethical challenges he has encountered in his role as CFO as well as in other positions throughout his career. Students then divided into groups to discuss and report on a case study detailing a potential ethical issue.

MAcc students Emily Rosenbaum and Kristen Dennis promote ethics as part of Ethics Week 2013

WALTER PAVLO, JR. Walter Pavlo, Jr., who oversaw a $2 billion operation at MCI Communications before he was caught in a scheme to embezzle $6 million, delivered the keynote address at the Wisconsin School of Business Department of Accounting’s Spring Ethics Symposium.

Walter Pavlo, Jr. Joan Schmit, Dan Kelly, and Terry Warfield

Leading up to the event, students promoted ethics beyond the accounting program in the atrium of the School of Business, held a viewing of the film Too Big to Fail followed by group discussion, and hosted a trivia night with ethics questions taken from current events.

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His cautionary tale, which detailed his journey from ethical family man to convicted felon, was honest and eye opening. Recounting the environment at MCI that compelled him to “cheat,” the double life he led, and the toll it took personally, professionally, and physically, Pavlo provided a powerful and unique insight into a large fraud with many consequences. He truly brought to life the textbook scenarios students discuss in their classes.

PROFESSIONAL ISSUES COURSE

Jim Leisenring, Kate Konetzke, and Alex Debbink work with students in the Professional Issues Course

Integrated Master of Accountancy (IMAcc) students have the opportunity to take a three-week professional issues course after completing a springtime internship.

In April 2014 Professor Karla Johnstone led the Professional Practice Issues in Accounting, Auditing, and Taxation course, treating 74 IMAcc students to an engaging schedule that included a variety of guest speakers: • Corporate Governance: Implications for Financial Reporting, Auditing, and Tax Mary Ann Cloyd, PwC Partner and Leader of the Firms’s Center for Board Governance​ Ray Wilson, PwC Lead Relationship Partner with UW–Madison (and honorary Badger) • Financial Accounting Standards Setting and Regulation Jim Leisenring, FASB Senior Technical Advisor (former FASB and IASB board member)

• Financial Reporting Judgments in the Real World Jim Walker (BBA ’82), Associate Dean of Financial Management Office in the Wisconsin School of Business • Tax Policy and Regulation Todd Watchmaker (BBA ’82), KPMG Lead Relationship Partner with UW–Madison • Considering a Corporate Career Troy Van Beek (BBA ’05, MAcc ’06), Enterprise Capital Management Director, American Family Insurance • Making Career Choices Dan Langer (BBA ’78), Controller, UW–Madison Accounting Services Zach Kowaleski (BBA ’08, MAcc ’09), Ph.D. student in the Wisconsin School of Business

Alex Debbink (BBA ’12, MAcc ’13), FASB Postgraduate Technical Intern (PTA)

Kristen Pisani (BBA ’02, MAcc ’03), Senior Manager, EY

Kate Konetzke (BBA ’12, MAcc ’13), FASB PTA

Salman Aasi (MAcc ’14) Analyst, Dispute Consulting, Duff & Phelps

• Auditing Standards Setting and Regulation Cynthia Fornelli, Executive Director of the Center for Audit Quality • Auditing Judgments Regarding Audit Quality Carla Gogin (BBA ’92), Partner, Baker Tilly • Internal Control and Perspectives from a CFO and former COSO Chairman David Stockwell (BBA ’94), CFO, Therma-Stor LLC Professor Emeritus Larry Rittenberg, former COSO Chairman

• Managing Your Impression, Networking, Mentorship and Work-Life Balance Kathy Feucht (BBA ’96), Deloitte Lead Relationship Partner with UW–Madison Liesl Seiser (BBA ’13, MAcc ’14) Joe Paskov (BBA ’12, MAcc ’13), Assurance Associate, EY Kelly Raquet, Senior Associate Tax Services, McGladrey

• Global Mindset Ken Bouyer, EY Director of Diversity and Inclusion Recruiting

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EY DONATES $1.1 MILLION

Karla Johnstone, the EY Professor of Accounting, is leading the global mindset effort, along with Accounting Department Chair Terry Warfield and Professor Ella Mae Matsumura. The initiative has two primary components: academic and extracurricular activities that demonstrate the value of diversity in the classroom, workplace, and business environment and the creation of the Global Mindset Scholars program, which provides scholarships and supports outreach efforts to underrepresented minority students.

Leaders from EY and the Ernst & Young Foundation were on hand to present a donation to the Wisconsin School of Business

Ernst & Young LLP (EY) has pledged $1.1 million to the Wisconsin School of Business. The majority of the gift ($850,000) will fund the Global Mindset Leaders Program, designed to introduce students to cultural and social diversity in business.

The remainder will go toward other programs within the accounting department.

“The Ernst & Young Foundation and my fellow contributing partners from Ernst & Young LLP are honored to make this gift. By creating the Global Mindset Leaders Program and investing in other accounting program and school initiatives, we are working toward our purpose of building a better working world,” said David Gay, a partner in the firm’s Milwaukee office. “In partnership with the Wisconsin School of Business, we are confident the program will increase diversity and inclusion within the school and teach the importance of embracing different perspectives in today’s global business environment.”

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“Business professionals who have a global mindset are more aware of cultural differences and open to diverse perspectives,” Johnstone said. “They do not merely tolerate diversity; they embrace it and ask how the company might learn and benefit from views that differ from mainstream thinking. This gift will enable us to better prepare our students for the challenges and opportunities of our globalized business world.”

The gift makes EY the first corporate partner for the Wisconsin School of Business Innovation Fund, which focuses on projects that impact large numbers of students, provide transformational experiences, and incorporate faculty research.

“We are delighted to share with EY a commitment to outstanding learning experiences for our students,” said Wisconsin School of Business Dean François Ortalo-Magné. “We are most grateful to EY for joining our efforts to reinvent business education by moving from delivering teaching to inspiring learning.”

The accounting department began rolling out a Global Mindset curriculum in the introductory financial and managerial courses, which are required for all Wisconsin School of Business students. Student feedback was very positive and the department, and School, look forward to expanding the curriculum in future years.

ARTHUR ANDERSEN CENTER ACTIVITIES ANDERSEN CENTER WORKSHOP SPEAKERS AND THEIR PRESENTATIONS, 2013–2014

• Abbie Daly, Ph.D. candidate, University of Wisconsin–Madison.

“The Effect of the Accounting Information Environment on Returns for Consolidated Entities Holding Publicly Traded Subsidiaries” • Darren Roulstone, The Ohio State University. “Management Earnings Forecasts and Forward-Looking Statements” • Brian Mayhew, University of Wisconsin–Madison. “Are Related Party Transactions Red Flags?”

• Sanjay Kalluper, Indian School of Business. “Differential Audit Quality across Individual Big 4 Audit Partners, Regulatory Effectiveness, and Deterrence in Korea” Accounting students participating in team-building exercises at The Future Is Now

The Arthur Andersen Center continues to support a wide range of activities within the Department of Accounting and Information Systems, providing an independent source of funding for activities focused on accounting research, student development, and the accounting profession.

The Future Is Now is the department’s signature event, bringing together over 40 alumni to share knowledge on personal brand development, global mindset, professional competencies, career path exploration, team building, and leadership. The two-day event is at the center of efforts to attract students to the profession and start them on the path to becoming accounting professionals.

The Center also sponsors an ongoing workshop series for both faculty and Ph.D. students focusing on cutting-edge accounting research and issues. Each semester four to six leading accounting scholars are invited to present their research. Presentations by department faculty and Ph.D. students are also encouraged. Outside speakers meet with faculty and students one-on-one and in small groups, which serves as a great networking opportunity and keeps UW connected to the wider academic community. This series also serves an important role in recruiting new faculty. Candidates give presentations as part of their on-campus visits, providing insights into their research while also demonstrating their teaching skills.

• Albert Tsang, The Chinese University of Hong Kong.

“Mandatory IFRS Adoption, Accounting Proximity, and International Cross-Listings” • Katharine Drake, University of Arizona. “Investing in Tax Breaks: Assessing the Outcomes of Political Strategy Choices” • Logan Steele, University of Connecticut. “The Risk-Relevance of Taxable Income” • David Wood, Brigham Young University. “Shadow IT and Data Credibility: The Impact of Shadow Systems in an ERP Environment” • Linda Myers, University of Arkansas. “The Effect of Media Characteristics on Analyst Forecast Properties: CrossCountry Evidence” • Michael Williamson, University of Texas at Austin. “Selection Benefits of Stock-Based Compensation for the Rank-and-File” • Lori Schefchik, Ph.D. candidate, Georgia Institute of Technology. “Potential Benefits and Unintended Consequences of Risk-Based Inspections on Auditor Behavior” • Eldar Maksymov, Cornell University. “Do Auditor Communication and Manager Action Help Auditors Assess Manager Competence After Control Failure?”

• Emily Griffith, University of Georgia. “Auditing Complex Estimates: The Interaction of Audit-Team Specialists’ Caveats and Client Source Credibility” • Brian Fitzgerald, Texas A&M University. “Specialists or Colleagues: Who Do Auditors Listen To?” • Dereck Barr, University of Mississippi. “The Role of Independence in the Effectiveness of Continuous Auditing” • Dan Lynch, Ph.D. candidate, Michigan State University.

“Investing in the Corporate Tax Function: The Effects of Remediating Material Weaknesses in Internal Control on Tax Avoidance” • Sean Dennis, Ph.D. candidate, University of Wisconsin– Madison. “An Audit Partner-Led Field Intervention in Fraud Brainstorming” • Michael Willenborg, University of Connecticut. “Issuer Operating Performance and IPO Price Formation”

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NEW FACULTY

The Wisconsin School of Business continues to add expertise to its accounting department as it brings on four new faculty members.

Dereck D. Barr, a certified public accountant and internal auditor who received his Ph.D. from the University of Mississippi in May 2014, is teaching intermediate accounting beginning in Fall 2014. Barr began his career as an external auditor, but spent most of his six years in practice as a senior internal auditor for Federal Express.

His research focuses on factors that affect auditors’ internal and external judgments and the interactions between auditors and managers. His current projects examine the effect of audit frequency on internal auditor judgments, how multiaccount audit settings affect an auditor’s ability to anticipate and respond to a manager’s possible financial misreporting tendencies, and the effect of professional skepticism on auditor decision making.

Emily Griffith joined the school in the fall of 2014 teaching auditing. Griffith received her Ph.D. from the University of Georgia in May 2014, where she previously taught at the Terry College of Business. She is a certified public accountant with three years of experience in public accounting and is a member of the inaugural class of the AICPA Accounting Doctoral Scholars Program. Griffith’s research focuses on auditor judgments about nonverifiable information, such as complex estimates and the involvement of nonaudit professionals in auditing. Her work thus far examines factors and interventions that help auditors combine information from diverse sources to identify problems within estimates. She has presented her research at academic conferences including the AAA Auditing Section and ABO Section Mid-Year Meetings and recently had articles accepted for publication in the peerreviewed journal of Contemporary Accounting Research and the Journal of Accounting Research.

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Dan Lynch will teach financial accounting and taxation beginning in the 2014–2015 academic year. Lynch received his Ph.D. from Michigan State University. He is a certified public accountant with two years of experience in public accounting, where he specialized in corporate and individual taxation. Lynch’s research focuses on the intersection of financial and tax reporting. He is particularly interested in corporate tax avoidance and the effects of regulation on company behavior. One of his papers illustrates how U.S. oil refineries reduce crude oil inventories prior to year-end property tax assessment dates and shows how the crude oil market adjusts prices as a result. He has served as an ad-hoc reviewer for the Journal of American Taxation Association and is a member of the American Accounting Association as well as the American Taxation Association.

Logan Steele joined the school’s accounting department in Fall 2014 and will be teaching intermediate accounting.

Previously, Steele taught classes in both finance and managerial accounting at the University of Connecticut.

His academic background includes a Ph.D. in accounting from the University of Arizona and an MBA from Western Washington University. After obtaining his MBA, he pursued a career in public accounting. Steele’s research interest focuses on the relationship between firms’ underlying operations and their financial reporting outcomes.

FACULTY RECOGNITION

Brian Mayhew, director for the Arthur Andersen Center for Financial Reporting and Control, was promoted to full professor by the Wisconsin School of Business and appointed as the Arthur Andersen Alumni Professor.

and Assurance Research in Canberra and presented a research workshop paper at the University of Melbourne. Her time in Australia also included quality leisure time with two of her children (who attended public schools in Coogee Beach), swimming, hiking, vineyard tours, and many of Sydney’s main attractions (Bondi Beach, the Opera House, jet-boating, and numerous sports venues). Karla and her family loved everything about Australia, barring the very large huntsman spiders that managed to sneak into their apartment.

Back in the United States, Karla began a two-year term as editor of the top auditing research journal, Auditing: A Journal of Practice & Theory in addition to completing the latest edition of her textbook, Auditing: A Risk-Based Approach to Conducting Quality Audits.

Stacie Laplante was promoted to Associate Professor and named the David J. Lesar Chair of Accounting by the Wisconsin School of Business.

Terry Warfield, PwC Professor in Accounting and Chair of the Department of Accounting and Information Systems, and Kristen Fuhremann, Director of the Professional Programs in Accounting, were recognized during the annual Wisconsin School of Business awards ceremony. Terry was awarded the Gaumnitz Distinguished Faculty Award for Service and Kristen received the Mabel W. Chipman Outstanding Academic Staff Teaching Award.

Karla Johnstone, EY Professor of Accounting, spent the Fall 2013 semester on sabbatical at the University of New South Wales in Sydney, Australia, where she interacted with faculty and Ph.D. students, presented a research workshop paper, and developed new colleagues and co-authors. She gave the Keynote Address to the Australian National Centre for Audit

Mark Covaleski received the Mary Parker Follett Award for Outstanding Paper for 2013: “Theoretical Triangulation and Methodological Pluralism in Management Accounting Research,” Accounting, Auditing & Accountability Journal 26 (2013), with Zahirul Hoque (La Trobe University, Melbourne, Australia) and Tharusha Gooneratne (University of Colombo, Sri Lanka).

He was also appointed University of Wisconsin– Madison Athletic Board chair and serves as faculty representative to the NCAA, Big Ten Conference, and WCHA, as well as campus governance of athletics.

Professor Emeritus Larry Rittenberg was recognized as a 2014 Outstanding Contributor by the Institute of Internal Auditors for the article “COSO 2013: A Reflection of the Times,” published in the August 2013 issue of Internal Auditor.

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RESEARCH GRANTS, PUBLICATIONS, AND PRESENTATIONS

Ella Mae Matsumura spoke on a panel at the American Accounting Association’s Management Accounting Section Conference in January 2014: Becoming Sustainable: A Rational Decision Based on Sound Information and Effective Processes?

Ella Mae Matsumura, Rachna Prakash, and Sandra C. Vera-Muñoz. “Firm-Value Effects of Carbon Emissions and Carbon Disclosures.” The Accounting Review: March 2014, vol. 89, no. 2, 695-724.

In Fall 2013, a managerial (practitioner) version of the research paper was published as a KPMG Global Valuation Institute publication, “Carbon Footprint Stomps on Firm Value.” Per KPMG, “This paper breaks new ground on an important environmental issue as the authors have quantified the impact of carbon emissions produced by firms on their value.”

C. Chen, E.M. Matsumura, and J.Y. Shin. “The Joint Effect of Competition Intensity and Competition Type on the Use of Customer Satisfaction Measures in Executive Annual Bonus Contracts.”

The Accounting Review, forthcoming, January 2015.

Karla Johnstone, EY Professor in Accounting, presented her research paper, “An Audit PartnerLed Field Intervention in Fraud Brainstorming,” coauthored with S.A. Dennis, at numerous locations, including University of Notre Dame (2014), University of Missouri-Columbia (2014), University of Connecticut (2014), North Eastern Behavioral Accounting Research Symposium (Boston, 2014), and the International Symposium on Audit Research (Maastricht, Netherlands, 2014).

K.M. Johnstone. C. Li, and S. Luo. “Client-Auditor Supply Chain Relationships, Audit Quality, and Audit Pricing.” Auditing: A Journal of Practice & Theory, forthcoming 2014.

K. Ittonen, K.M. Johnstone, and E.R. Myllymäki.

“Audit Partner Public-Client Specialization and Client Abnormal Accruals.” European Accounting Review, forthcoming 2014.

T.S. Hsieh, J.C. Bedard, and K.M. Johnston. “CEO Overconfidence and Earnings Management.”

Journal of Business Finance & Accounting, forthcoming 2015.

E.M. Matsumura and J.Y. Shin. “Relative Performance Evaluation: A Review of Managerial Accounting Research.” Journal of Management Accounting, Japan, 2013, Supplement II, 3–12 (invited paper).

Kristian D. Allee, Dan Lynch, Kathy R. Petroni, and Joseph H. Schroeder. “Do Property Taxes Affect Real Operating Decisions and Market Prices for Crude Oil?” (September 24, 2013). Contemporary Accounting Research, forthcoming.

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Mark Covaleski, Robert Beyer Professor of Management Accounting, presented on the Economic Impact of the Affordable Care Act at the following conferences: • AHANA (African American, Hispanic, Asian, Native Americans) Conference of Health Disparities, University of Wisconsin School of Medicine and Public Health, Madison, WI.

Bradley S. Blaylock, Fabio B. Gaertner, and Terry J. Shevlin. “Book-Tax Conformity and Capital Structure.” Working paper (2014).

James Chyz, Fabio B. Gaertner, Asad Kausar, and Luke Watson. “Overconfidence and Aggressive Corporate Tax Policy.” Working paper (2014).

• American College of Obstetricians and Gynecologists, Washington, D.C. • American College of Physician Executives, Seattle, WA

Mark A. Covaleski, Mark W. Dirsmith, and Jane Weiss (Ph.D. ’01). “The Social Construction, Challenge and Transformation of a Budgetary Regime: The Endogenization of Welfare Regulation by Institutional Entrepreneurs.”

Accounting, Organizations & Society 38 (2013): 333–364.

Mark W. Dirsmith, Mark A. Covaleski, Sajay Samual, and Jane Weiss (Ph.D. ’01). “From the Physical to the Fiscal: Monetizing the Poor.”

Public Administration Research 3 (2014): 1–16.

Stacie Laplante was appointed to the editorial board of Contemporary Accounting Research and reappointed as chair of the Research Resources and Methodologies Committee of the American Taxation Association.

Kenneth J. Klassen and Stacie K. Laplante. “A Model of the Cost of Income Shifting with an Application to Tax Planning and E-Commerce.”

Journal of the American Taxation Association, forthcoming.

Mark W. Dirsmith, Mark A. Covaleski, and Sajay Samual. “On Being Professional in the 21st Century: An Empirically-Informed Essay.”

Auditing: A Journal of Practice and Theory, forthcoming.

Thomas Kubick, Dan Lynch, Michael Mayberry, and Thomas Omer. “Product Market Power and Tax Avoidance: Market Leaders, Mimicking Strategies, and Stock Returns.” The Accounting Review, forthcoming, March 2015.

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RESEARCH GRANTS, PUBLICATIONS, AND PRESENTATIONS

University of Wisconsin–Madison Faculty Recognized by National Accounting Organizations—Award supports Wisconsin School of Business research to help improve audit practice.

Wisconsin School of Business Accounting Professor Emily Griffith and Ph.D. student Patrick Hurley (with University of Georgia Professor and UW–Madison Alumna Jackie Hammersley [BBA ’86]) received the Access to Audit Personnel Program Award, sponsored by the Center for Audit Quality and the Auditing Section of the American Accounting Association.

Griffith and Hurley are one of only four research teams in the U.S. to receive this prestigious award.

Griffith and Hurley’s proposal, Ego Depletion and Evidence Integration While Auditing Complex Estimates, focuses on the role of ego depletion on job performance in auditors. A popular topic in social psychology, ego depletion argues that exercising self-control over a long period of time limits a person’s ability to do so in the near future. Griffith and Hurley’s research will examine ego depletion in auditors who work long hours during the busy season.

“Auditors simply have too much work to do during the busy season, but the historical make-up of accounting firms doesn’t allow for workload reductions during those times,” says Hurley. “We want to focus on how auditors could structure their work to improve their judgment and performance.”

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EMILY GRIFFITH

PATRICK HURLEY

Griffith and Hurley believe their research topic was the right balance of theory and practical application, examining the academic question of how ego depletion affects the brain as well as the real solutions companies could use to combat the effects.

The award gives the winning faculty and UW–Madison students access to auditors from several accounting firms for data collection and academic research. A committee of senior academics and audit practitioners considered several factors for the award, including the research’s ability to address questions relevant to the industry, its contribution to academic literature, and its methodological soundness.

ADVISORY BOARD MEMBERS

DEPARTMENT OF ACCOUNTING AND INFORMATION SYSTEMS ADVISORY BOARD MEMBERS

Mike Altschaefl* President Still Water Partners

Katherine Feucht* Deloitte AERS Partner

Isabel Bartos* Financial Reporting Analyst Journal Communications, Inc.

David Gay* Partner Ernst & Young LLP

Steven Carter* Vice President and Corporate Controller SC Johnson & Son, Inc.

Neil Lonergan* Managing Director Grant Thornton LLP

Robert J. Cottingham* Partner Wipfli LLP

Tim Mattke* Executive Vice President – CFO MGIC Investment Corporation

Dianne Dubois* CFO Say Media, Inc.

Derek Matzke* Assurance Senior Manager BDO

Wayne Ehlert* Partner and Regional Risk Leader Baker Tilly Virchow Krause LLP

Amy Mutziger* Assistant Corporate Controller Johnson Controls, Inc.

Todd Watchmaker* Partner KPMG LLP

Ray Wilson Partner PwC

*Alumni

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DEPARTMENT OF

ACCOUNTING & INFORMATION SYSTEMS

STAY IN TOUCH TERRY WARFIELD

KRISTEN FUHREMANN

Department Chair PwC Professor in Accounting twarfield@bus.wisc.edu 608-262-1025

Director of Professional Programs in Accounting kfuhremann@bus.wisc.edu 608-262-0316