TO THE ACCOUNTING HALL OF FAME
The induction ceremony was held during the August 2022 Annual Meeting in San Diego, CA.
Three new members of The Accounting Hall of Fame were inducted by the American Accounting Association (AAA) in August 2022, during the organization’s Annual Meeting held in San Diego, CA. The Accounting Hall of Fame originated at The Ohio State University in 1950 and has inducted 110 members since its inception. In 2017, the operations of The Accounting Hall of Fame were assumed by the AAA.
For 2022, the three inductees represent a diverse group of accounting thought leaders from both practice and educational backgrounds, according to Bruce Behn, a past president of the AAA who chairs The Accounting Hall of Fame Committee. The nomination process engaged members of The Accounting Hall of Fame, the AAA and other professional accounting organizations. This year’s inductees, Frank Donaldson Brown (1885-1965), Robert Louis Bunting, and Robert Ernest Verrecchia, are profiled in the following information.
Frank Donaldson Brown (1885-1965) was born in Baltimore on February 1, 1885, the son of J. Willcox Brown and Ellen Turner Macfarland. Brown entered Virginia Polytechnic Institute (VPI) in 1898 at the age of 13, graduating four years later with a degree in electrical engineering. Today, the student union at VPI is named for him.
He became the chief financial officer at DuPont Corporation in 1912 and later General Motors Corporation (GM) in 1921. At both companies, Donaldson Brown developed accounting innovations that led to the success of both organizations. These innovations included the DuPont Return-on-Investment (ROI) formula in 1914. However, ROI was not Brown’s only contribution to financial management. His dealer ten-day reporting system at GM was widely and rapidly adopted throughout the auto industry. His ideas to support a variety of forecasting and planning techniques supported decentralized corporate management, and his pricing processes were cutting-edge developments that others emulated. Flexible budgeting at General Motors also was implemented during his administration in the early 1920s.
Brown began his career in 1903 with the Baltimore & Ohio Railroad, but soon moved to the Sprague Electric Company, a subsidiary of General Electric. He stayed with that company until 1907 when he went into business for himself in a coal-moving company and then went to work in 1909 as a salesman of explosives for the DuPont Company. In 1912, DuPont general manager, Hamilton Barksdale, a first cousin who was married to a duPont*, recognized Brown's abilities and asked him to join the staff. In June 1916, Brown married Barksdale's daughter, Greta duPont Barksdale, which gave him a kinship that some considered necessary for advancement at DuPont. He was elected to the DuPont board of directors in 1918 and remained thereon until his death 47 years later. He served on the DuPont board’s Finance Committee for 45 years. He died on October 2, 1965, at the age of 80.
ROI was Brown's most prominent contribution and the technique achieved status as a dominant approach to financial management by the 1950s. As a national standard-of-performance measure, it was supported by varying sources including the American Management Association as well as in the teaching materials of academics, especially Robert N. Anthony of the Harvard Business School. The impact of these forms of dissemination led to ROI being adopted eventually at the Ford Motor Company when its previously autocratic centralized style of Ford family management was replaced by a team known as the Whiz Kids, led by Harvard Business School alumnus Robert McNamara and a former GM vice president, Ernest R. Breech. This is indicative that the innovations developed by Brown are among the most important of those initiated in 20th century corporate America, and thus among the most important in the development of 20th-century accounting and financial management thought.
Although it was at DuPont that Brown developed many of his concepts, it was at GM where he was able to put them to work. Brown’s title was officially that of chief financial officer, but he was also essentially what is known today as the chief information officer at both companies—a role that effectively supported GM’s decentralization. The practices initiated by Donaldson Brown enabled DuPont and General Motors to cope with the challenges of large companies seeking to balance centralized vs. decentralized decision-making. Brown’s ideas were made known through his writings, publications, and speeches, and ultimately by incorporation in textbooks, classrooms, and academic literature. Trade organizations and financial publications, for decades up to the present, have disseminated ROI materials. Furthermore, his disciples helped in spreading his influence far beyond GM and DuPont.
* Note that the name of the DuPont company is capitalized, but the surnames of the founding family members do not have an initial capitalization.
Robert Louis Bunting, born in Sacramento, California, in 1945, has based his entire professional career, following education at the University of Idaho, in the West, most prominently in the Seattle area. From this location, he has achieved both national and international recognition for leadership roles in challenging circumstances as Chairman of the Board of the American Institute of Certified Public Accountants (AICPA), and as Board Chair of the International Federation of Accountants (IFAC).
In the Northwest of the United States, as chairman of Moss Adams, (1981-2004), he was the acknowledged leader of developing and thriving peer firms with growing national and international duties, a person viewed as a role model of a professional firm leader. He maintained his focus on the firm for the main part of his career, and thereafter offered his time and talent to the broader professional community.
True to the adage that challenges find leaders, he began service on the Board of the AICPA in 1986 and served nearly continuously through his term as AICPA Board Chair (2004-2005). When it became apparent that the post-Enron world challenges would continue to profoundly affect the manner in which the accountancy profession was evolving throughout the world, leadership from the USA was seen as needed internationally. Following unanticipated circumstances, he was asked to assume a major role in these episodes. Bunting immediately agreed to extend his voluntary activities and made the needed commitment.
Thus, it was that IFAC, and the global profession became the beneficiaries of his leadership.
Following the East Asia Financial Crisis, professional bodies and international securities regulators began a series of reforms creating international standard setting boards for auditing, ethics, and education, overseen by a Public Interest Oversight Board (PIOB). These were challenging times, and the profession was concerned about regulatory overreach yet faced up to the importance of acting in the public interest and not self-interest. Bunting entered this series of events first as Deputy President (2005-2009) and then as President of IFAC (2009-2011), representing accountancy bodies from over 130 countries and some 25 of the largest international auditing networks. He navigated the nuanced geopolitical landscape advocating for the elements of a new model, in both the spirit and the letter of the reforms. He helped craft a pillar which has enabled the current generation of high-quality standards to fill a void.
These early steps created a foundation for the view of a global accounting profession which would begin a multi-generational effort to transcend the wariness of the profession, concerns of regulators, and advance the well-being of the public to bring about a better-informed investor community.
Since 2012 Bunting has chaired an AICPA Task Force on Sustainability Accounting and Assurance, adding a contemporary topic to his portfolio of leadership activities.
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.
About the American Accounting Association
Promoting excellence in accounting education, research, and practice, the American Accounting Association (AAA) is the largest community of accountants in academia. Founded in 1916, we have a rich and reputable history built on leading-edge research and publications. The diversity of our membership creates a fertile environment for collaboration and innovation. Collectively, we shape the future of accounting through teaching, research, and a powerful network, ensuring our position as thought leaders in accounting. For more information about the AAA, please visit http://aaahq.org
The Accounting Hall of Fame was established at The Ohio State University in 1950.
The Accounting Hall of Fame honors accountants who have made, or are making, significant contributions to the advancement of accounting since the beginning of the 20th century. Since its establishment in 1950, 110 leading accountants have been elected to the Hall of Fame.