Rick Mergenthaler

Color portrait of Rick Mergenthaler

Associate Professor in Accounting

Department Accounting

Phone Number 814-863-7055
Email Address rjm6979@psu.edu

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Education

Ph.D., Accounting, The University of Washington, 2008

Masters of Accountancy, Audit, Brigham Young University, 2002

Bachelors of Science, Accounting, Brigham Young University, 2002

Courses Taught

ACCTG 481 – Fin Anal Eval Dec (3)
An accounting based evaluation and decision making approach to analyzing financial statements by studying business and firm valuation.ACCTG 481 Financial Statement Analysis (3) The proposed course in financial statement analysis is structured to improve the student's ability to extract and interpret information from actual financial statements and to expose the student to how financial statement information is integrated into equity valuation and credit analysis. The course would not only rely upon textbook-based and lecture-based learning, but also emphasize case-based learning.The course will consist of two main sections. The first will deal with accounting and business analysis. This part will explore the types of financial information data typically available for publicly traded companies and introduce a model of the economic drivers of company performance. It would incorporate some technical accounting as well as some standards business economics/strategy concepts. Students will be forced to recast financial statements that they believe do not reflect the underlying economic state of the company. Financial reporting issues relating to revenue and expense recognition, leases and consolidations will be discussed.The other section of the course will deal with firm valuation. Students would be exposed to some standard approaches to equity valuation and the analysis activities underlying these approaches. Aspects of valuation that would be covered in this section of the course are financial ratio analysis, forecasting, pro-forma statements, cost of capital and valuation methods.The course will rely on lectures and extensive use of case studies.

ACCTG 501 – Res Meth Acctg (3)

ACCTG 502 – Accounting Research (3)
This course prepares DBA students to consume and produce accounting research. Students will also be equipped with a solid understanding of the philosophy of science and know how to design a research study to avoid common threats to validity. Students will also be instructed on the proper etiquette they should employ when serving in the academic community-especially as it pertains to scholarly peer reviews.

Selected Publications

Ashraf M., Donelson D., McInnis J., Mergenthaler R., "Fair Value Accounting Standards and Securities Litigation." Journal of Accounting and Economics, vol. 79, no. 1, 2025
Chen C., Melessa S., Mergenthaler R., Ohn H., "Measuring Cash Flows: A Guide for Researchers." The Accounting Review, 2025
I note Heejin Ohn as a graduate student as he was a graduate student at the University of Iowa when he was added to the project. Ciao-Wei Chen was also my graduate student (I was his advisor), but he was not a graduate student when we started this project. Rather, he and Sam Melessa were assistant professors.
Hribar P., Mergenthaler R., Roeschley A., Young S., Zhao C., "Do Managers Issue More Voluntary Disclosure When GAAP Limits Their Reporting Discretion in Financial Statements?." Journal of Accounting Research, vol. 60, no. 1, 2022
I was working on this paper with my two Ph.D. students, Spencer Young and Aaron Roeschley. We had a working draft and Paul approached me with the same idea as I'm the expert on the discretion afforded to managers via GAAP. Hence, I chose to team up with Paul as he is a good friend and colleague. Having five coauthors on this paper is an anomaly and is the exception in my published papers.
Chen C., Collins D., Mergenthaler R., "Financial Statement Comparability and the Efficiency of Acquisition Decisions." Contemporary Accounting Research, vol. 35, no. 1, 2018
Ciao-Wei Chen was my graduate student (i.e., I was the co-chair of his dissertation committee) and this paper was started from his second year paper, for which I was his advisor.
Acito A., Hogan C., Mergenthaler R., "The Effects of PCAOB Inspections on Auditor-Client Relationships." The Accounting Review, vol. 93, no. 2, 2018, pp. 1-35
Hribar P., Folsom D., Peterson, Mergenthaler R., "Principles-Based Standards and Earnings Attributes." Management Science, vol. 63, no. 8, 2017
David Folsom and I started this paper when I was an assistant professor and he was a graduate student at the University of Iowa. Hence, I marked him as a graduate student--meaning he was a grad student when the project started.
Donelson D., McInnis J., Mergenthaler R., "Explaining Rules-Based Characteristics in U.S. GAAP: Theories and Evidence?." Journal of Accounting Research, vol. 54, no. 3, 2016
Donelson D., McInnis J., Mergenthaler R., "The Effect of Corporate Governance Reform on Financial Reporting Fraud." Journal of Law, Finance, and Accounting, vol. 1, no. 2, 2016
Donelson D., McInnis J., Mergenthaler R., "Discontinuities and Earnings Management: Evidence from Restatements Related to Securities Litigation." Contemporary Accounting Research, vol. 30, no. 1, 2013
Brown N., Christensen T., Elliott B., Mergenthaler R., "Investor Sentiment and Pro Forma Earnings Disclosures." Journal of Accounting Research, vol. 50, no. 1, 2012
Donelson D., McInnis J., Mergenthaler R., "Rules-Based Accounting Standards and Litigation." The Accounting Review, vol. 87, no. 4, 2012
Donelson D., McInnis J., Mergenthaler R., Yu Y., "The Timeliness of Bad Earnings News and Litigation Risk." The Accounting Review, vol. 87, no. 6, 2012
Bhattacharya N., Black E., Christensen T., Mergenthaler R., "Who Trades on Pro Forma Earnings Information?." The Accounting Review, vol. 82, no. 3, 2007
Bhattacharya N., Black E., Christensen T., Mergenthaler R., "Empirical Evidence on Recent Trends in Pro Forma Reporting." Accounting Horizons, vol. 18, no. 1, 2004

Honors and Awards