An interview with Andy Schmidt, Associate Professor of Accounting at North Carolina State University. NCSU recently upgraded to a Professional subscription.
What intrigued you about Calcbench?
I was interested in ways to democratize financial information - to give access to hard to find information to students and professors. I thought products built on top of XBRL could do that.
XBRL was very inaccessible at first. It required coding and managing taxonomies that were a heavy lift for most accountants and accounting students. Calcbench not only makes XBRL accessible for teaching and research, but they also use XBRL to make accounting data more accessible to users.
How do you use Calcbench in the classroom?
I teach a senior-level capstone course on business valuation - students build spreadsheets and apply different valuation and analysis models. In the past, they would have to go to many sources to access the information needed - from Yahoo! Finance to a companies’ investor relations page to get profile information and financials. Calcbench is a one-stop shop for accounting-based valuation and analysis. You can quickly download entire financial statements or footnotes in formatted spreadsheets or use the XBRL functions to build your own analysis templates in Excel (e.g. DuPont analysis, Piotroski F-scores, and Altman Z-scores). Once you have a template built, you just type in a ticker symbol and date and Boom! - there is the data, ready for analysis.
What Calcbench features do you use in your research?
I am a self-proclaimed nerd and like to read accounting footnotes. I like to sort out boilerplate language from the disclosures that really say something about a company’s performance. For me, simple tools like comparing disclosures across time are valuable. I haven’t seen this type of functionality in other XBRL applications.
The ability to dig deep into footnotes is important to my research. I have recently been working on a project related to the deferred tax asset valuation allowance. This data is in the tax footnote and is time-consuming to collect by hand.
How much time do you save with Calcbench?
I have a disability from a spinal cord injury that has affected the use of my arms and hands. That means it takes me even longer to hunt and peck for information that is not collected by other financial data providers (e.g., financial statement footnote data). In the past it could take me weeks to months to hand-collect data for research. Calcbench reduces this time significantly, to say the least.
What skills do accounting students need to learn these days?
Well, I think accounting students still need to learn accounting - the structure and taxonomy of accounting data. Most accounting classes teach students a taxonomy as defined by GAAP. For example, students learn the definition of an account, how accountants typically value the account, potential different ways to arrive at the account value, and how to report the account value in the financial statements or footnotes. In addition to preparing accounting data, we are now asking students to become better users of accounting data - to analyze the data to make decisions. From an analysis standpoint, students should have an advanced understanding of spreadsheet programs like Excel and a semester or two of statistics, covering topics like hypothesis testing, correlation and regression analysis, and forecasting.
Any parting words for our readers?
I think that students do not spend enough time with actual financial statements, which impairs their ability to (1) better connect how transactions affect the financial statements and (2) assess the implications of the transactions for a variety of outcomes (e.g., performance). To help students make those connections, I think professors in every accounting class could use Calcbench to quickly deploy examples using current and prior financial statements and footnotes.
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