Dowdell’s research area is financial reporting. Financial reporting provides information about companies to help investors and creditors with their decisions on investments and loans. He examines the interaction of three financial reporting activities: financial report preparation, financial report rules, and enforcement of financial report rules. Dowdell has published papers in accounting, finance, and education journals (e.g., Journal of Accounting and Public Policy, Journal of Financial and Quantitative Analysis, Advances in Accounting Education) and has presented papers at regional and national accounting conferences.
Dowdell has three publications and two ongoing projects related to in-process research and development costs (IPRD). His first two papers showed the effect of enforcement on financial report preparation: the Securities and Exchange Commission (SEC) criticized IPRD reporting and companies revised what they recorded to IPRD, even though there was no actual change to the IPRD accounting rules. His third IPRD paper examined how a change in the IPRD accounting rules affected financial report preparation; his research shows that changing IPRD from an expense to an asset caused companies to report less IPRD in their acquisitions. Dowdell’s current projects examine (1) whether investors value IPRD differently now that it is recorded as an asset as compared to when it was immediately recorded to expense and (2) what is the success/failure rate of research and development through what companies are currently reporting about their IPRD.
Dowdell’s research record also includes six papers on the interaction between companies managing their earnings (part of financial report preparation) and enforcement of financial report rules through audits or internal control of financial reporting (ICFR), both of which are a concern of the SEC.Accounting researchers are concerned that companies manage their earnings through biased estimates or by real activities (e.g. increase or reduce discretionary expenses like research and development). The results indicate that auditor and manager scrutiny of ICFR reduces earnings management and improve financial reporting quality. In addition, it is evident that auditors are concerned with companies managing their earnings through real activities, in addition to managing them through biased estimates. Lastly, Dowdell’s research findings show that companies manage their earnings more if their CFO previously worked for their audit firm. One of Dowdell’s work in processes is examining weaknesses in ICFR and the effect on operating profitability.
Dowdell’s research provides feedback for accounting standard setters like the FASB and standard enforcers like the SEC. For accounting standard setters, Dowdell provides feedback as to how financial report preparers respond to accounting rules where a wide degree of discretion is allowed. For accounting standard enforcers, Dowdell provides feedback on the effectiveness of different enforcement practices: public statements, audits, internal controls.