5 Questions with Faculty: Richard Schneible

ALBANY, N.Y. (Jan. 31, 2017) — Richard A. Schneible Jr. is an assistant professor of accounting in the Department of Accounting and Law, part of the School of Business. He came to UAlbany in 2010, attracted, he said, “by the opportunity to do interesting research in collaboration with an already excellent faculty, to contribute to the education of a wonderful student body, and to be closer to family.”

Richard Schneible won an undergraduate teaching award in the School of Business in November of 2016.

What are your working on now?

I have a project right now that examines book value of equity forecasts made by analysts. Most people I have talked to, even those well informed about the capital markets, seem puzzled by the issuance of forecasts of book value of equity. We adopt the perspective of investor demand for information to shed light on this phenomenon.

We first show that analysts’ book value of equity forecasts are more accurate than those from naïve models such as a random walk and mechanically imputed from analysts’ own earnings forecasts and that stock prices react to unexpected book value at the time when actual financial results are released, demonstrating the accuracy and usefulness of these forecasts. Next, we explore the factors determining issuance of book value forecasts, and find that analyst decisions accord with the valuation importance of book value as predicted by the real options-based model of Zhang (2000). Specifically, analysts are more likely to issue book value forecasts for firms faced with a significant chance of exercising either abandonment options or growth. Furthermore, the effect of growth potential is more pronounced for high- (versus low-) profitability firms, and the effect of ROA volatility is more pronounced for firms in high- (versus low-) growth industries, consistent with the predictions of the theoretical model.

Our study sheds light on the determinants and consequences of analysts issuing book value forecasts from a valuation perspective.

What made you decide to pursue your field?

I’m one of those people who is interested in everything. Accounting, as the language of business, stands at the nexus of a number of business disciplines and allows me to explore many different ideas and disciplines. So far, I have been able to explore (and publish) ideas in accounting, finance and management.

What’s your favorite class to teach?

It’s hard to pick a favorite, but I would have to go with BACC 680: Research Seminar in Accounting. This class comes at the end of the students’ time in the program. It gives me the opportunity to see in the students’ command of the material and their ability to develop their ideas some of the fruits of the labor of all the faculty, staff, and students. I am constantly updating the content of the course to examine what is “over the horizon” in accounting which gives me the opportunity to learn with and from my students as we explore these new ideas and proposals together.

Dinner tonight with anyone, living or not: Who, and why?

My wife. I suppose the usual answer to this question is some famous religious person, philosopher or scientist. That would surely be interesting, but life is short and there is too little time to spend with the ones you love.

What was the last book you read for pleasure?

I am currently reading The Hobbit with my children.

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