Ever wonder how an academic uses Calcbench? We recently talked with Ahmet Kurt, Ph.D., assistant professor of accounting at Suffolk University, about his extensive use of Calcbench for research and how he is incorporating Calcbench into his classroom this fall.
Q: Tell us a bit about your research and teaching style.
I do archival research on financial reporting quality, corporate governance, and auditing. I value practical research. My work has been cited in the Wall Street Journal, Bloomberg, and CFO.com.
In the classroom, I use my accounting and finance training to explain to students how these two important business functions interact. My teaching style is hands-on, with extensive use of real company data.
Q: What kind of data are you or your students looking for?
For my research on financial reporting quality, I am mostly interested in data pertaining to companies’ corporate financing transactions, such as share repurchases and equity financing.
My students use a variety of information included in the companies’ annual reports, such as financial statement data, management forecasts and discussion, and information on retail outlets and lease agreements.
Q: As a professor, how do you use Calcbench?
The day I started using Calcbench changed the way I collect data. Using Calcbench has cut my hand collection by more than 50 percent; in some cases, there is no hand collection required at all.
During my Ph.D. years, I spent a good amount of my time hand collecting data from companies’ SEC filings. This is a very time-consuming process. With Calcbench, I eliminated the need for manual data collection from the SEC’s website. However, if I still need to access companies’ SEC filings, Calcbench makes that process much easier by providing direct access to relevant filings with the “trace” link. I can also quickly download links to all 10-K filings, proxy statements, and earnings releases on the SEC’s website into a spreadsheet.
For my classroom, this will be the first semester that I am using Calcbench as an instructional tool. In the past, I built an Excel spreadsheet to download financial statement data from Yahoo Finance and other sources. Now the students in my Financial Statement Analysis course will be able to download, analyze, and compare companies’ financials using Calcbench.
Q: Calcbench uses XBRL to power its platform. You’re an author of, An Input Based Measure of Financial Statement Comparability. How is XBRL changing the way you research financial data?
XBRL is a promising technology for accounting and finance research. With the introduction of XBRL, researchers have gained immediate access to detailed financial data as reported by companies. The use of standardized tags, in many cases, facilitates the comparability of financial information across companies. Nevertheless, it is challenging for researchers to use “as is” XBRL data in their analysis because companies’ XBRL reporting practices are not uniform. (For example, there are some differences in how companies label particular XBRL items.) Standardized metrics provided by Calcbench help address this issue.
Q: Share repurchases are a hot topic these days. You recently published an article in CFO Magazine on accelerated stock repurchases (ASRs). Tell us about ASRs and why they are important.
ASRs let firms buy back a large block of their shares quickly from an investment bank. This is different from traditional buybacks where firms gradually repurchase shares in small amounts on the open market.
Shares repurchased in an ASR transaction are immediately recorded in treasury stock, reducing the company’s share count overnight. Some people even refer to ASRs as “overnight share buybacks.” This raises the question of whether firms use ASRs opportunistically to give a quick boost to earnings per share (EPS).
I find some support for this argument. One out of every four ASR firms would have missed analysts’ EPS forecasts had they not initiated the ASR transaction. I also find that the likelihood of using ASRs as an earnings management device is higher among firms that provided their CEOs with EPS-contingent bonus plans and firms that are habitual beaters of analysts’ EPS targets.
For the ASR article in CFO Magazine, I was able to get the most recent information on share repurchases from Calcbench in 30 seconds.
Among your areas of expertise are financial reporting quality, corporate governance, and auditing. How do you see Calcbench helping with financial reporting quality, corporate governance and auditing?
Calcbench provides immediate access to a large amount of data, contributing to information discovery and processing by market participants as well as academics.
High-quality research by analysts, investors, and other users improves transparency in capital markets, which is key to better reporting, auditing, and governance.