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A Fascination with Accounting



March 31, 2014
Dr. Fang Zhao brings her focus on the students’ perspective to make accounting and financial reporting accessible and interesting  to students in her classroom.

During her senior year at Nanjing University in China, Fang Zhao was offered a job at an electric company. An accounting major, she was about to receive her bachelor’s degree in business administration.

But, yearning for more adventure, she declined the job offer. Then in her early 20’s, Fang says she wanted “to further her education, have more experiences, understand different cultures and see other parts of the world.” 

She set her sights on the United States. Realizing that graduate education in economics, business, and accounting is more advanced in the United States than in China, she decided to pursue her graduate studies here. 

Now, Fang is anticipating receiving her Ph.D. in accounting and coming to the Girard School to teach accounting on a tenure track.

Beginning at the Girard School in the fall, Fang will teach an undergraduate course in Intermediate Accounting and a graduate course in Financial Reporting and Statement Analysis, part of a new Master of Science in Accounting program.

Fang also stated that she “feels really excited to contribute her efforts in the developing stages of this new program”.

With regards to the small class size and the community at Merrimack College, she said “it feels like a family”. This attracted her to our campus. And the region also appeals to her:

 “There is a great history and culture in the Boston and New England area. I love living in a small town but close to a big city.”

Coming from China, Fang knows about big cities. Nanjing is a city of more than 3.6 million people and Nanjing University has more than 35,000 students.

She moved to the United States in 2006 and spent her first four years living in Indiana, where she received an M.A. in economics from the University of Notre Dame and an M.S. in accounting from Indiana University. Then she entered the Accounting Ph.D. program at Florida International University in Miami, concentrating on financial reporting issues.

She says about her research: “I found financial reporting issues most fascinating, since they help me thoroughly understand a firm’s financial reporting, the incentives and techniques of earnings management and how different internal and external factors affect a firm’s financial reporting quality.”

Fang says about returning to accounting after studying economics. “The process is long and not easy, but I am so happy that I went through it with persistence and hard work,”

Her dissertation, “The Implication of FIN 46 on Accruals Quality and Investment Efficiency,” examines the effects of changes in the accounting consolidation procedures of off-balance sheet activities on financial reporting quality and investment efficiency. The Financial Accounting Standards Board issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, in 2003. Fang explains that under FIN46 “companies are required to consolidate special purpose entities (SPEs) on the financial statements if they are the primary beneficiaries of the SPEs, regardless of their voting interests in the entities.”

Her research has two objectives, she continues:

“The first objective of this study is to investigate whether the implementation of this new guidance affects accruals quality for firms with SPEs. The second objective is to investigate whether this new guidance affects investment efficiency for firms using SPEs.” 

 In 2013, she was named an American Accounting Association/Deloitte Foundation/J. Michael Cook Doctoral Consortium Fellow and successfully defended her dissertation proposal in June of that year.

 Teaching an introductory financial accounting course at FIU for three years, Fang says “my research experiences have helped me discuss financial reporting topics in class more in depth, thus broadening students’ perspective and understanding of the course materials.”

While teaching she asks herself questions in order to help students, “What is their learning curve for certain difficult topics? Why do they have difficulty in understanding certain concepts? Then I explain in a way that best helps them to learn step-by-step until they understand it completely.”

Having lived in the United Stated for nearly eight years, she appreciates the American emphasis on the individual. “I am more suited for the lifestyle in the U.S. because of my personality,” says Fang. “Individualism is emphasized here. People make decisions on their own. Personal needs are respected and considered in every aspect of the society.” Fang takes pride in her individualism, nurtured by her move to the United States. However, she still holds on to traditional family values. “I am proud of making my own decisions in many transitions in my life,” she says. “I never regret any of the decisions that I have made.”

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    Dr. Fang Zhao

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