Haim Falk Award

2011 Recipient of the Haim Falk Award for Distinguished Contribution to Accounting Thought

The CAAA and the Haim Falk Award Committee, consisting of Patricia O'Brien (chair), Michel Magnan and Dan Simunic, are pleased to name Professor Michael A. Welker, Queen’s University, as the 2011 Award recipient.

Professor Welker’s contributions to accounting thought relate accounting decisions and standards to investors’ use of information and to the functioning of capital markets. He has been at the forefront of research on the internationalization of accounting.

His widely cited 2003 Accounting Review paper with Utpal Bhattacharya and Hazem Daouk, "The Worldwide Price of Earnings Opacity," relates earnings transparency/opacity to capital costs and capital market function across 34 countries and 15 years. Professor Wayne Thomas notes that "[a]t the time it was published, researchers were just beginning to explore such issues using cross-country settings." Professor Welker’s 2008 Accounting Review piece with Kee-Hong Bae and Hongping Tan, "International GAAP Differences: The Impact on Foreign Analysts," demonstrates how worldwide harmonization of accounting can improve information flows by facilitating coverage by foreign analysts. He continues this stream of contributions in his 2011 Journal of Accounting Research piece, "Timing Equity Issuance in Response to Information Asymmetry Arising from IFRS Adoption in Australia and Europe," co-authored with Shiheng Wang. In his letter of support, Professor Daniel Thornton describes their finding that "companies in over 30 countries tended to peddle overpriced equity prior to making unfavorable restatements when they switched to IFRS," and goes on to note how it has influenced Canadian regulators’ approach to our own IFRS transition.

A prominent theme in Professor Welker’s research is that increased disclosure improves equity market function. Several letters supporting the nomination cited Professor Welker’s 1995 paper in Contemporary Accounting Research, "Disclosure Policy, Information Asymmetry and Liquidity in Equity Markets," which stems from his PhD dissertation at the University of Iowa.

This paper demonstrates that companies with better disclosure, as evaluated by professional investment managers, enjoy greater market liquidity than those ranked as poor disclosers. His later papers have examined disclosures ranging from corporate reporting on social responsibility activities to evaluations of the market risk of derivative instruments. In this body of work, he has contributed substantially to our knowledge of how better disclosure improves investors’ evaluations and pricing of companies.

The letters of support that accompanied the nomination particularly noted Professor Welker’s strong record of working with doctoral students, helping to produce future generations of Canadian accounting researchers. His students offer praise such as "always ready to offer his generous guidance," "a mentor with superb insight and exceptional ability," "kind, patient, generous, respectful and supportive." Professor Hongping Tan, a former student, notes that "Mike has inspired the people around him – PhD students, colleagues and friends – to strive for research excellence."

Professor Welker’s research contribution also includes mentoring aspiring authors through the journal review process. He has served on the Editorial Board of Contemporary Accounting Research since 2000, and as Associate Editor since 2007. His work as Associate Editor has been consistently timely, thoughtful and well articulated. His interactions with authors have been respectful and in the traditional spirit of CAR, i.e., in working with authors to enhance their manuscripts.

In summary, for his original and important contributions in the areas of international financial reporting and the impact of improved disclosure, and for his mentoring of doctoral students and colleagues, we are pleased to recognize Professor Michael A. Welker with the 2011 Haim Falk Award for Distinguished Contribution to Accounting Thought.

• Patricia O’Brien, Chair of the Haim Falk Committee, University of Waterloo
• Michel Magnan, Concordia University
• Dan Simunic, University of British Columbia