Jamie Pratt was born in Indianapolis in 1951 and attended Bishop Chatard High School. After being drafted by the Chicago White Sox in 1969, an offer that he turned down, he attended Purdue University, where he majored in Industrial Management and played varsity baseball for four years, winning the MVP award in 1972 and the 1973 Big Ten Intercollegiate Conference Medal of Honor for academic and athletic excellence. He earned a doctorate in Business Administration from Indiana University’s School of Business in 1978, and with his spouse, Kathy, moved to Seattle, Washington, where he began his academic career at the University of Washington, and where Kathy began to work at Price Waterhouse (now PricewaterhouseCoopers).
Jamie served on the University of Washington faculty from 1978 to 1990, and during that time period earned the rank of full professor with tenure, started a family with Kathy, and took visiting positions at the Banking Institute at the University of Zurich (1981–82) and at Northwestern’s Kellogg School of Business (1989–90).
In 1990 Jamie and family moved to Bloomington, Indiana, and he accepted a position as professor of accounting at the School of Business, soon to become the Kelley School, and has remained here since. During that time period, Jamie took a visiting position at INSEAD in Fontainebleau, France. Jamie served as chair of the Kelley Accounting Department from 1998 to 2004 and chair of Graduate Accounting Programs from 2006 to 2007. In addition, he chaired the committee that created the Graduate Accounting Programs, which for over 20 years has delivered two highly successful master’s-level accounting programs. As the originator of these programs, Jamie was honored with an innovative teaching award for curriculum development from the Kelley School of Business. Jamie’s professional accomplishments are many and varied. His research has examined the processes and consequences of financial reporting, auditing, and investment decisions. His research record includes 33 peer-reviewed articles (20 of which appear in the most prestigious accounting research journals), earning for him the following honors: Department of Accounting Lifetime Achievement Award, Kelley School of Business Full Professor Research Award, the American Taxation Association Outstanding Manuscript Award, and International Research Fellow at the University of Manchester. This outstanding record also includes holding the prestigious Alva L. Prickett Research Chair of Accounting for 10 years until retirement as well as numerous invited research presentations at top universities throughout the United States, Europe, and Asia. In addition, Jamie served as associate editor at The Accounting Review, the American Accounting Association’s primary research journal, and chaired the research program at the annual meeting of the American Accounting Association.
Jamie has taught financial accounting and financial statement analysis at all levels. His impressive record as an educator includes over 30 teaching awards and recognitions for teaching undergraduate, master’s, and Ph.D. students. Not only has he received numerous teaching awards from the Kelley School of Business, but he also received awards from the University of Washington (Seattle), Northwestern University, and INSEAD.
He has taught all over the world, including Seoul (South Korea), Beijing (China), Ryazon (Russia), Tokyo (Japan), Mikkeli (Finland), and at universities across western Europe. He has also published frequently in accounting education journals and was chosen Outstanding Educator of the Year by the Indiana Society of CPAs. His textbook Financial Accounting in an Economic Context is in its 11th edition, and he has published a second textbook, a casebook, and a variety of innovative educational software products. Jamie is particularly proud of the success of a number of doctoral students whose dissertations he chaired. His students currently include the dean of the University of Washington’s Foster School of Business, chairs of the accounting departments at Villanova University and the University of Alabama, and the Perella Chair in the Department of Accounting at Lehigh University.
Even in retirement he continues to publish educational materials, earning the title of National Registry CPE Sponsor from the National Association of State Boards of Accountancy, a title that allows him to offer internet-based video financial reporting and analysis courses that can be completed by CPAs for continuing education credits.
In retirement, Jamie plans to continue a presence in the world of accounting by maintaining an active blog on LinkedIn that periodically offers commentary on interesting current developments in the practice of accounting and finance. He is also CEO of PRATTedu.com, which offers video-based financial reporting and analysis courses on the internet. He and Kathy, who just celebrated their 42nd anniversary, are the parents of three grown boys and two lovely grandchildren (and hopefully still counting). They move around among three homes: a condo in downtown Bloomington, a lake house in Brown County, and a lovely home on Harbour Island in the Bahamas, an island he has visited since he was a boy in the early 1960s. Jamie still enjoys sports, playing tennis and a variant of basketball, and volunteering as the junior varsity coach for the Bloomington High School North baseball team. It is not unusual to find him with a shovel digging around in the landscape, tinkering on the piano, or at a computer key board typing out his poetically licensed version of the history of Harbour Island.
Visiting Professor, INSEAD, Fontainbleau, France, 1996-1997
International Lecturer, Manchester, England, 1986
International Lecturer, Kwansei Gakuin, Japan, 1987
Visiting Professor, Banking Institute of the University of Zurich, Zurich, Switzerland, 1982-1983
Awards, Honors & Certificates
Associate Editor, The Accounting Review
Educator of the Year, Indiana State Society of CPAs
Numerous teaching awards
Program Chairman, American Accounting Association, 1993
Numerous editorial boards
KPMG Research Opportunities in Auditing Grant
Selected Publications
Hirst, E., and Pratt, J. (2009), Financial Reporting and Value Creation: What the Executive Needs to Know, John Wiley & Sons.
Pratt, J. (2006), Financial Accounting in an Economic Context (7th edition), John Wiley & Sons.
Frederickson, J., Hodge, F., and Pratt, J. (2006). The Evolution of Stock Option Accounting: Disclosure, Voluntary Recognition, Mandated Recognition and Management Disavowals. The Accounting Review, 81(5), 1073-1093.
Abstract
In this study we report the results of an experiment that examines how relatively sophisticated financial statement users interpret management stock option compensation disclosures under SFAS No. 123 and SFAS No. 123R. We predict and find that mandated income statement recognition, as required under SFAS No. 123R, leads to higher user assessments of reliability than either voluntary income statement recognition or voluntary footnote disclosure, options allowed under SFAS No. 123. Users view voluntary footnote disclosure as the least reliable reporting alternative. We also examine the amount users invest in response to these accounting treatments, and find that users invest more in a firm when management chooses income statement recognition than when management chooses footnote disclosure. We find no difference in investment amounts between mandated recognition and either voluntary recognition or footnote disclosure. Finally, although we find that these results are insensitive to whether management explicitly disavows the reliability of stock option expense, we present evidence that in side-by-side comparisons, where one firm disavows and the other does not, disavowals may affect user judgments and decisions.
Hodge, F., Hopkins, P. E., and Pratt, J. (2006). The Effect of Reporting Discretion and Reputation on the Credibility of Financial Statement Classification. Accounting, Organizations & Society, 31(7), 623-634.
Abstract
In this study we investigate how the level of discretion in the reporting environment and management's reporting reputation influence the extent to which management's reporting incentives are important in determining the perceived credibility of management's classification choices. Consistent with prior research, we show that users view incentive-inconsistent classifications as more credible than incentive-consistent classifications. We extend this finding by showing that the strength of this relationship (i.e., the extent to which users consider the consistency between the classification and management's reporting incentives) depends on the level of discretion in the reporting environment and management's reporting reputation. We find that users rely less (more) on the consistency between management's reporting incentives and the classification in a mandated (discretionary) reporting environment and when managers have a good (poor) reporting reputation. We conclude by discussing the implications of our findings and potential future research.
Hodge, F., Martin, R., and Pratt, J. (2006). Audit Qualifications of Income-Decreasing Accounting Changes. Contemporary Accounting Research, 23(2), 369-394.
Abstract
In this study we conduct a field experiment to examine how qualifying an income-decreasing accounting change in years of strong financial performance affects user assessments of strategic reporting, current financial performance, and financial performance over the next three years (future performance). We find that without the qualification, users viewed the income-decreasing accounting change as relatively non-strategic, and user assessments of current and future performance were not different. In the presence of the qualification, users believed that the accounting change was relatively strategic, they discounted the income effect of the accounting change, and their assessments of future performance were below their assessments of current performance but no different from the assessments of future performance in the absence of the qualification. While our findings suggest audit qualifications encourage users to be skeptical of income-decreasing accounting changes, we find no evidence that they impose negative consequences on management in terms of lower assessments of financial performance.
