Why did the accountant stare at his glass of orange juice for three hours? After spending a good 45 minutes talking to Mark Maffett about accounting, his work, and settling in Hyde Park after migrating from the South, it was clear that accountant jokes need not apply. Joining Booth faculty in 2012, Mark Maffett is an Assistant Professor of Accounting and Centel Foundation/Robert P. Reuss Faculty Scholar at Booth. Maffett may be best known among Booth students for his financial accounting intro course. But for those who are interested in pursuing a career in consulting, there may be an opportunity to have a little more Maffett in your life as he prepares to teach a new course with a heavy emphasis on financial accounting applied in a consulting setting (read on to find out more).

For those who shudder at the thought of devoting a lifetime to thinking about debits and credits, Maffett makes it clear that the interesting and more powerful part of accounting lies elsewhere: “The overlap between what we teach and what we research is not as direct as some of the other disciplines. A lot of what we research is on more of a big picture level than the nuances—like accounting rules—that we teach in classes. More generally, our focus is on how the quality of a firm’s disclosure environment affects various capital market outcomes.”

Mark Maffett, Assistant Professor of Accounting and Centel Foundation/Robert P. Reuss Faculty Scholar at Booth — Mark Maffett, Assistant Professor of Accounting and Centel Foundation/Robert P. Reuss Faculty Scholar at Booth

“A paper that has had a lot of influence on the way that we do things and the questions that we ask is one by two economists, [Ginger Zhe] Jin and [Phillip] Leslie, that look at the effect of the disclosure of hygiene scorecards in restaurants. They were able to get ER admissions information from where they did the study so that they could look at the incidence of foodborne illness and other sickness, then tie it back to these disclosures of the scorecards and how that changed what restaurants people decide to go to. This paper seems as far removed from accounting as you can get, but the conceptual mechanisms that underlie the effects of going from having to go to the courthouse to flip through the files for hygiene scores to explicitly posting the score where everyone can see it when they walk through the door is very related to the type of questions we think about.”

Applying this to his own work: “I’m looking at whether the provision in the Dodd Frank bill requiring firms to disclose mine safety information in the financial statement had any real effects. Did it decrease mining related accidents and injuries? If you increase safety it’s going to be costly from the mine’s perspective, so did it lower productivity? I also find that there are very real effects on demand for these companies. For example, if you’re a mutual fund and don’t want to be exposed to the possibility that a company in your portfolio could have a catastrophic mining accident.”

As consumers of financial reporting, Maffett’s message for Booth students “be aware of the context in which you are receiving a piece of financial information and how that is shaped by the interests of the parties that are disclosing that piece of information—the levers they have to turn. Financial information is shaped by a particular party’s incentives in terms of what they disclose to you.”

Maffett recognizes a need for an advanced accounting course that is more reflective of the changing career aspirations of Booth students entering functions that require a solid grasp of accounting: “a lot of the jobs that students are taking are changing. The higher proportion in consulting, lends itself to a little more of a broad of a focus.” Aware that students who have interviewed for consulting have found that interviewers expect more accounting knowledge that what is taught in the financial accounting intro course, Maffett envisions his course to be more advanced than the intro course but more transaction focused than FSA.

Aspiring consultants, help Prof. Mark Maffett help you be more prepared for your internship and full time job. Email him at (Mark.Maffett@chicagobooth.edu) or stop by his office (Room 437) to chat.

Araba is a first year at Booth who recently discovered that there’s life above the 2nd floor of Harper Center.

Didn’t bid enough points for Designing a Good Life last quarter? I had a chance to sit down with Nicholas Epley, the John T. Keller Professor of Behavioral Science at the University Of Chicago Booth School Of Business. Famous in the academic world for his work in personality and social psychology, he is popularly known among students as the man behind one of the most “expensive” classes of Winter Quarter. Dressed down in jeans and a polo shirt, his casual demeanor amidst an office full of books was an appropriate representation of his mix of intellectual and outdoor pursuits.

On how he spends his time: “I grew up in rural Iowa and have always been a farm boy at heart, so I like to be outdoors. Hunting, fishing, working in the woods. I do a lot of gardening at home. I have an orchard, and I’m planting trees with great regularity. We own a little bit of land in Central Illinois—50 acres that we manage as part of a forestry program. We’re doing a prairie grass restoration there, so I’m actually going out there this weekend to do some turkey hunting and also burning some of the grassland and wood to beat back the invasive species and make it better for wildlife.”

Despite his love for the outdoors, Epley was drawn to an academic career in social psychology after his first psych course in college: “I was really interested in why good people do bad things. A classic problem in intellectual thought and everyday life. Philosophy gives you lots of ways to talk about this issue, but no ways to really answer that question. But psychology allows you to think those kinds of big questions but also gives you the tools to answer them.”

In his 11th year at Booth, Epley has found the environment at Booth to be one which has not forced him to narrow down the scope of his research to an explicit business focus. Rather, it has enhanced his research by forcing him to think hard about why the work that he does matter. (After a little provocation), Epley responds to the “soft” label often heard applied to Organizational Behavior courses at Booth: “The mind is the most complicated thing ever. Ever. It’s not reducible to a simple math problem, not even a complicated math problem. So referring to [research that addresses this] as ‘soft’ is very odd.”

Nicholas Epley, the John T. Keller Professor of Behavioral Science — Nicholas Epley, the John T. Keller Professor of Behavioral Science

Offering the course for the first time this year, Epley’s goal in creating Designing a Good Life was to provide a course that explores ethics in a manner that would be both interesting and useful to students: “The class builds up from a basic understanding of what ethics are and what leads us to do things that aren’t in line with our own understanding of what would be good. It builds up from a basic understanding of the psychology of this to the organizational level—how to create an organization that helps good people not do [the things that they recognize as unethical], then it ends by asking the question of whether ethics and hedonics are aligned—whether being good feels good.”

So does being good go with feeling good? Epley argues “yes”: “Being good and feeling good are deeply aligned. Ethics is about pro‐sociality, and having good social relationships is one of the key ingredients of happiness.” Don’t believe this? Take the course and participate in an original experiment that substantiates this.

The one idea that he would want all Booth students to leave with: “Overconfidence is the biggest problem that psychologists have identified in everyday life. You can always learn better. There is always a lot that you don’t know. The most critical element of learning is having some sense of humility.”

On what’s next for him: “I’ve gotten really interested in how we misunderstand each other in fundamental ways. The things I have gotten interested in most recently is a phenomenon we might refer to as ‘de‐humanization.’ These are cases where we fail to understand that somebody has a fully human‐like mind like we do. There are lots of subtle instantiations of this. You think that someone is not quite as smart as you are. Not quite as compassionate or as empathic, not quite as moral. These are all judgments that someone lacks some fundamental feature of humanity. That’s gotten me really interested recently in the power of a person’s voice. We’re finding that the ability to communicate fundamental capacities—your ability to think, your ability to reason, that you’re a thoughtful, compassionate person—are not so much a thing that you can read about or see in others. It turns out that people can hear it. That your voice communicates thinking, empathy, compassion, feeling. And when people communicate in mediums that lack a voice, they are more likely to dehumanize a person.”

Araba is a first year at Booth who recently discovered that there’s life above the 2nd floor of Harper Center.

Coffee on the Third Floor: Mark Maffett on Hidden Ubiquity of Accounting

How Exactly Do You Design a Good Life? An Interview with Nick Epley