Accounting Research: On the Relevance of Research to Practice.

Abstract This article comments on the relevance of academic accounting research to the accounting profession. There has been a great deal of discussion over the past several years about whether--or how well--academic accounting research meets the needs of the accounting profession. Usually the discussion is framed in terms of the "relevance" of accounting research to accounting practice. To begin with, "relevant" isn't really the right term to use. And the FASB may be as much to blame as anybody for introducing that term into the debate. That is because accountants tend to think in terms of the "relevance" and "reliability" of accounting information. However, in the context of decision makers rather than decision usefulness, relevance and reliability alone are not sufficient. There is a subtle difference between decision makers, on the one hand, and decision usefulness, on the other hand, that is often overlooked. That distinction is important because information that is not understandable to decision makers will not be used by them even if it is decision useful.