Time to Change Academic Research Is Now
- Editor-in-Chief Mary-Jo Kranacher’s column “The Future
of the Profession: Assessing Priorities in a Changing Environment”
(March 2008) got me thinking.
accounting research has a lot to offer the accounting community.
Yet, the way accounting research is communicated stifles its potential
impact. Accounting research is steeped in analytical terminology
and statistical results that are not generally understood outside
academia. For many years, internal and external critics of accounting
research have called for change. But change has not come.
community has been forced to change as a result of corporate scandals.
The academic community should follow suit and take an introspective
look toward change. Examine how our research could have played
a more pivotal role in communicating the impending corporate failures—and
perhaps hampering them. If accounting research on earnings behavior,
auditor relationships, or agency theories provided any evidence
of the imminent corporate failures, then researchers did a woeful
job communicating their findings in a manner that would allow
anyone to understand them. The relevance of accounting research
has to be communicated in a way that goes beyond demonstrating
the researcher’s eloquent mastery of scientific methods.
no doubt that doctoral programs do an excellent job training candidates
to rigorously research questions. However, doctoral programs fail
to train candidates to communicate the importance of their findings
in a way that benefits a broader readership, a readership beyond
the academic community.
If not now, when? There is a quiet frustration within the academic
community about our research. There are those who have the power
to change the system but don’t because it benefits them.
Others with power to make changes decry the current system but
do little to effect change. Small populations of junior faculty
and others, like me, yearn for change but are powerless to be
the catalytic stimulus to incite change.
research is in the midst of a crisis of relevance. We will continue
in that crisis until change comes. To whom the credit belongs
for the following adage, I do not know. As researchers in accounting,
we are destined to continue in our perilous crisis if we do not
hearken to these words: “You will continue to have what
you have always had, if you continue to do what you have always
K. Gates, PhD, CPA
Assistant Professor of Accounting
University of Texas at Tyler
State Taxes When Making Business Decisions
“Comparing State Taxes When Making Business Decisions”
(The CPA Journal, March 2008) compares corporate income
taxes, gross receipts tax, sales and use tax, and corporate alternative
minimum tax (AMT). The article was excellent, but not exhaustive,
because in many instances local taxes also play a significant
while California and North Carolina do not have a gross receipts
tax, some jurisdictions in these states do. Some have no maximum,
or a very high maximum, while others have a low maximum. For example,
Los Angeles has a gross receipts tax (with no maximum), while
jurisdictions in North Carolina have a gross receipts tax but
with a maximum of not more than a few thousand dollars.
the article doesn’t mention business personal property tax,
which many jurisdictions have. The taxes themselves vary by jurisdiction
and can be significant, as can the administrative time involved
in completing these tax forms because they require detail of not
only owned assets by specific categories, but also of all leased
assets. In addition, if there are significant disposals, certain
jurisdictions, such as Memphis, Tenn., require the company to
“prove” the disposals.
In my opinion,
the business personal property tax is the most regressive tax
there can be. The property each year is depreciated in value.
Therefore, the tax decreases as the assets get older, so buying
new assets puts the value in year 1, thereby increasing the tax—a
disincentive to purchase new assets.
sales tax rates (e.g., New York State’s is 4.0%, New Jersey’s
is 7.0%, and Texas’s is 6.25%), New Jersey’s is a
statewide sales tax and is the full rate (i.e., jurisdictions
do not have a separate rate). New York’s effective rate
is really more like 8%—the combined rate when adding the
statewide rate to the rate for a particular local jurisdiction.
Texas’s effective rate is more like 8.25% when adding in
the local jurisdiction’s tax rate. So, while at first New
Jersey appears to have a lower sales tax rate than New York or
Texas, further analysis shows otherwise.
decision needs to be based on economic analysis, of which taxes
are only one part, and that includes federal, state, and local
E. Pecora, CPA