Dr. Dye is the Leonard Spacek Professor of Accounting Information & Management at Northwestern University’s Kellogg School of Management. Prior to his tenure at Kellogg, he held appointments in accounting and economics at the University of Chicago and in accounting at Yale University. Dr. Dye is world-renowned for his academic contributions in managerial accounting, management compensation, financial disclosure, information economics, and the economics of standards. As a consultant, Dr. Dye has served as a testifying expert on a number of litigation cases involving various complex accounting and economic issues.
If there was one accounting rule you could change, what would it be and why?
The biggest defect in accounting standards today is the accounting for intangibles: for most tech, software, and e-commerce firms, their investments in intangibles are their biggest and most important investments, but the FASB continues to force these firms to record those expenditures as expenses. This is not good for the firms, and it is not good for investors. Even non-e-commerce companies are significantly adversely affected by the current accounting for intangibles: their investments in marketing, training, and R&D are all currently recorded as expenses too.
In your opinion, what developments, if any, are currently poised to have a significant impact on the field of Accounting?
Changes in the lease accounting rules where many more leases are going to have to be put on firms’ balance sheets is, at least in the short term, the largest US GAAP issue. A lot of firms are going to see their debt-to-equity ratios skyrocket as the new lease accounting standards take effect, and it is going to take time for some of the less sophisticated investors and analysts to adjust how they interpret firms’ capital ratios as a result.
To date, what stands out to you as a couple of the highlights of your academic career?
I am most proud to have been the principal academicadvisor to some really great PhD students in accounting atNorthwestern. Two of my most recent students are now faculty members at Stanford’s business school, and over the years I have had students whose first academic jobs were at the Harvard Business School, Columbia,MIT, and Wharton. Another highlight is my research studying firms’ voluntary disclosure decisions. I have worked on the economic analysis of disclosures for more than twenty years, and I continue to be fascinated by it.
On what types of consulting cases do you prefer working?
Because my background spans both economics and accounting, I have gotten to work on a variety of different cases, and I have found them all enjoyable. Each case has presented unique challenges and has posed interesting questions to answer. If I had to pick a specific type, I would probably choose cases that involve financial disclosure issues, since - as I noted above - that’s an area on which I have focused much of my academic research.
What do you like most about where you teach?
Northwestern is a great university that attracts some of the very best business minds from around the globe, students and faculty alike. The accounting faculty and students are great, but so are the students and my colleagues in economics, finance, and strategy, to name just three areas. It has been a real privilege to work with such accomplished colleagues and to educate the next generation of business leaders.