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Anup Srivastava

Professor and Canada Research Chair
Recognition Year(s): 2024
Area of Impact: Finance or Accounting
School: Haskayne School of Business, University of Calgary
Location: Canada

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Summary

Anup Srivastava is a professor and holds the Canada Research Chair in Accounting, Decision-Making, and Capital Markets at the University of Calgary’s Haskayne School of Business. He is one of the world’s foremost researchers, speakers, and thought leaders on financial accounting for modern technology corporations.

Financial reporting and valuation models were primarily created for twentieth-century companies whose key assets included factories, buildings, land, and inventory. In contrast, twenty-first-century tech companies value innovations, patents, brands, algorithms, and human capital. Srivastava’s research reflects this shift. His work provides new insights that can guide directors, policymakers, accountants, and others in adjusting their practices to fit the emerging challenges and opportunities of the technology transformation.

Description of Research Impact

Srivastava has published 76 papers, with over 75 percent of his articles appearing in journals in the Financial Times’ top 50 list. Several of those papers have been published in top-tier scholarly journals, as rated by the Academic Journal Guide. Srivastava is perhaps the only active researcher to publish four solo articles in premier accounting journals, and one of his articles appears in the Hall of Fame at the Journal of Financial Economics. Srivastava has contributed 40 articles to the Harvard Business Review (HBR). His body of research has been downloaded more than 35,000 times from the Social Science Research Network alone, ranking him among the top one percent of the world’s most-downloaded social sciences authors.

Srivastava’s publications provide unique insights into accounting, valuation, governance, and tax issues related to knowledge firms. He advises the Accounting Setting Board of Canada as a member of its Academic Advisory Committee. His work has also been used by important policy setters, including the Alberta Securities Commission, the commissioner of the U.S. Securities and Exchange Commission (SEC), and the U.S. Congressional Research Service on legislative debate concerning global corporate taxation. It has also informed a white paper issued by the CPA of Ontario.

Four of Srivastava’s HBR articles addressed the transformation of college education in the aftermath of the global, technology-based experiment conducted during the pandemic. In addition to his many HBR publications, Srivastava contributed seven articles to the California Management Review (CMR) Insights platform; these offerings are noteworthy because HBR and CMR are the top two practitioner-oriented management resources in the world.

Srivastava has conducted training sessions for finance, banking, and executive professionals for CPA Ontario, Spartan Technologies, and BlackRock. He has given keynote speeches at the University of Toronto’s Annual Conference on Professional Accounting Futures, the Accountability in a Sustainable World Conference (University of Notre Dame), BlackRock investment bank, the Canadian Performance Reporting Board of CPA Canada, the Chartered Association of Business Schools (U.K.), the Egyptian Accounting Series, the Calgary Immigration Society, Columbia Business School’s Value Investing Conference, the Society of Quantitative Analysts (New York), and at the 2022 flagship event Confederation of Indian Industry. Srivastava has also appeared in a roundtable discussion of chief finance officers, industry experts, and banking leaders organized by the Journal of Applied Corporate Finance.

Examples of Research Impact

Modern tech companies do not compete with physical assets, such as land, oil fields, refineries, factories, and warehouses. Instead, they compete with innovation, patents, brands, customer relationships, computerized data and software, and talent and human capital. Accounting and financial reporting, however, is facing an existential crisis because self-developed intangibles are largely omitted from a company’s balance sheet. In addition, the more a modern technology company spends on developing its intangible building blocks, the bigger are its reported losses. Srivastava’s research addresses whether and how financial reports have become increasingly deficient in conveying the true profits and value of assets for modern corporations, as well as how accounting could be improved to foster better decision-making.

Srivastava’s work has built on two seminal papers published on identifying problems with financial reporting in modern times: “Why Have Measures of Earnings Quality Changed over Time?” and “Should Intangible Investments Be Reported Separately or Commingled with Operating Expenses? New Evidence.” Another paper, “Do Digital Technology Firms Earn Excess Profits? Alternative Perspectives,” addressed one of the most significant issues confronting society today. The study was motivated by allegations from governments around the world, including those of the U.S., the E.U., and Australia, that digital technology giants, like Amazon, Apple, Google, and Microsoft, earn abnormal profits and do so by misusing their market powers. This study was significant in two ways. First, it provided data-based evidence about an important issue confronting governments around the world. Second, it offered a new way to measure firm performance.

In 2018, Srivastava co-authored two highly influential HBR articles that discussed the growing financial reporting problems in the emerging knowledge economy: “Why Financial Statements Don’t Work for Digital Companies” and “Why We Need to Update Financial Reporting for the Digital Era.” Srivastava further extended thought leadership in the area of financial reporting by publishing two additional articles in HBR: “U.S. Financial Reporting Is Stuck in the 20th Century” and “Mind the GAAP.”

Srivastava was invited by Stanford University to explain why so many companies report losses today, and his talk was converted into an article titled “Trivialization of the Bottom Line and Losing Relevance of Losses.” Srivastava showed why losses do not maintain their traditional meaning, as loss-reporting companies turn out to be among the most successful. These articles explain the deficiencies in Generally Accepted Accounting Principles (GAAP) and how firms attempt to address them. Srivastava also provided new reporting ideas in an article titled “The Case for Reinventing Financial Reporting in the 21st Century” and through a speech he presented at the Society of Quantitative Analysts in New York, titled “Correcting Earnings and Book Values for Accounting Deficiencies.”

Another of Srivastava’s papers, “Improving the Measures of Real Earnings Management,” was motivated by allegations that firms frequently make suboptimal decisions, such as cutting research and development investments to misreport their profits. Srivastava provided a new, superior method for determining whether a firm is investing in value-creating activities or is undercutting intangible investments to misreport profits. He examined these ideas in two HBR articles that talked about the importance of innovation in today’s economy: “It’s Time to Stop Treating R&D as a Discretionary Expenditure” and “R&D Spending Has Dramatically Surpassed Advertising Spending.” He proposes a new way of estimating the value of firms' intangible capital in an article forthcoming in Management Science.

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