Robert Ernest Verrecchia

Robert Ernest Verrecchia is the Elizabeth F. Putzel Professor, Professor Emeritus of Accounting, Wharton School, The University of Pennsylvania.  Born in Rosemont, Pennsylvania in 1949, “Ro” Verrecchia achieved a position of eminence from the world class qualities of his contributions to academic literature and the impact of his work upon standard setting.   He holds a Ph.D. from the Graduate School of Business, Stanford University, an M.S. from the University of North Carolina at Chapel Hill, and an Sc.B. from Brown University.

Prior to his 1983 Wharton School appointment, he was a faculty member at the University of Illinois Urbana-Champaign and the University of Chicago. He served as department chair (1985-1997) at Wharton, providing leadership and addressing issues with sagacity and empathy.

Verrecchia has published world-renowned theoretical accounting research related to discretionary disclosure, financial accounting, and information economics.  A key feature of Verrecchia’s work that sets it apart from most theoretical research in accounting is that the insights he develops are clearly relevant to financial reporting practice and regulation.  Even though his work employs rigorous mathematical models, he writes his papers in a way that makes them accessible to non-theorists.  More importantly, the papers address issues that financial accountants of all types care about.  It is rare to find someone with this combination of skills.  Yet, this is exactly the type of scholar on which learned professions such as accounting depend.

The breadth of Verrecchia’s contributions to topics of his National Bureau of Economic Research coauthored working papers is evidenced in the subject matter, including defining an intertemporal tax discontinuity (ITD) as a circumstance in which different tax rates are applied to gains and losses realized at one point in time versus some other point in time, as well as studying the effects of ITDs on market behaviors at the time of disclosures of firm performance. His papers also addressed fundamental issues such as the debate over the consequences of information asymmetry, or information differences across investors in capital markets.

Perhaps most importantly over the forty years of his contributions, given that disclosure, including voluntary disclosure, is central to financial reporting, the insights from his work in this area have not only given rise to an extensive academic literature on the subject, but the record also supports that this literature has affected regulators’ views on disclosure. His intuition regarding the incentives and the consequences of those incentives, for voluntary disclosures, are paradigmatic, dominant explanations, considered fundamental.  These foundational views are observed not just in U.S. capital markets, but around the globe.

In addition, peers and former student testaments establish he is well recognized for sharing his time and knowledge with doctoral students, not only at his own institution but also through mini-course offerings and presentations in the United States and Europe.

Robert Ernest Verrecchia is the One Hundred and Thirteenth member of The Accounting Hall of Fame.