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Accounting Professor Charles Mulford runs the Georgia Tech Financial Reporting and Analysis Lab.
Accounting Professor Charles Mulford runs the Georgia Tech Financial Reporting and Analysis Lab.

Faculty Profile: Accounting Professor Mulford Refines Art of Synergy

If you want to know how accounting professor Charles Mulford has time to accomplish all that he does in a day, he’ll sum it up for you in one word: synergy. Unlike multitasking or burning the midnight oil, synergy is a cooperation of actions that combined are greater than the sum of their separate actions. Synergy has been the hallmark of his 30-plus-year career at Georgia Tech, which he delineates into three main periods, each lasting about 10 years.

Mulford’s first period, like that of many young academics, focused on academic research—both his and that of his doctoral students. “At the time, I was doing archival research that ended up in academic journals such as Journal of Accounting Research and The Accounting Review,” he says.

During his second period, the pendulum swung toward the professional side of accounting, an outgrowth of his ability to communicate with practitioners like accountants and financial, credit, and equity analysts. In this period he found himself writing books and articles for practitioner journals such as the Commercial Lending Review and consulting to commercial banks, activities that led him to the activity of his third, and current, period—running the Financial Reporting and Analysis Lab.

Accounting Scandals

Mulford, who holds the Invesco Chair, founded the Lab in 2002, when scrutiny of accounting practices was heightening after scandals at Enron and Worlcome. These scandals came to light as Mulford was publishing his third book, The Financial Numbers Game: Detecting Creative Accounting Practices.

“It got a bit of attention,” Mulford jokes, going on to say that the book was translated into four languages. “The book came out at the perfect moment,” he says. “I like to tell my students it outsold Harry Potter . . . for a day.”

Soon after, Mulford had become the “go-to” guy for financial reporters and practitioners alike, all struggling to make sense of accounting and financial statements. “I was on the phone all the time,” he says, “and this activity has continued to this day.” Reporters at outlets that regularly seek his help include The Wall Street Journal, The New York Times and CFO.  To formalize what he was doing on an ad hoc basis, Mulford created the Lab as a vehicle for him to research, write, and publish reports on pertinent accounting issues.

Twelve years later, deep into the third main period of his career, Mulford’s Lab produces eight reports per year for its more than 1,000 active subscribers representing a range of roles, from money and hedge fund managers to investment bankers, commercial lenders, financial analysts, and reporters. “Whenever I sit down to select a topic for a report,” says Mulford, “I think about the target reader—someone who is charged with making informed credit or investment decisions.” In particular, he likes to write about topics in which his readers are not well versed.  

Helping him with the research and writing are four MBA students, who work as Graduate Research Assistants (GRAs) in the Lab.  The work they do gives them an opportunity to delve in depth into a subject and then translate it for a non-academic audience.

A recent example is the topic of Unrecognized Tax Benefits (UTB), something Mulford came across in a newspaper article. He asked one of the GRAs, who happened to be a CPA, if he had ever heard of UTBs. “He hadn’t heard of it and I knew little about it, so I told him, ‘you and I are going to learn about this together,’” he says. By the end of the 15-week semester the student and Mulford had become experts on UTBs, a topic about which many companies had been grappling. “They learn a lot, I learn a lot, we publish the report on our web site, and sometimes we turn that report into a paper that is then published in an academic journal,” he explains.

Returning to the idea of synergy, Mulford points out that the Lab is a place where he can teach (the GRAs), provide information to practitioners, and gather new material for his classes. “There has to be synergy in what you do,” he says, “otherwise, there simply isn’t time in the day to do everything.”

Not surprisingly, Mulford starts each day reading The Wall Street Journal, always on the lookout for a new topic to bring to the Lab and his students.

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