Raffi Indjejikian is the Robert L. Dixon Collegiate Professor of Accounting at the Stephen M. Ross School of Business at the University of Michigan.[1] His research is primarily focused on the development of models and theories illustrating the role of managerial accounting in decision-making through the basis of agency theory.[1]
Indjejikian holds a Bachelor of Commerce and Diploma of Public Accountancy from McGill University in Montreal, an M.B.A. from the University of Western Ontario, and a Ph.D. from the Wharton School at the University of Pennsylvania. Before gaining a full professorship position at the University of Michigan in September 2000, Indjejikian held Associate Professor positions at the University of Michigan and University of Chicago from July 1992 to August 2000. He was also Assistant Professor, Instructor, and Lecturer at the University of Chicago, University of Pennsylvania, and McGill University, respectively.[2]
Raffi Indjejikian's research on two-tiered financial reporting pertains to the differences between sophisticated and unsophisticated users. Unsophisticated users may lack knowledge and technology to be able to analyze such complicated financial statements and reports. Therefore, a competitive advantage is created for the sophisticated users while unsophisticated users are left with an “information overload”. Two-tiered reporting can be damaging to unsophisticated users specifically in situations where important information is being eliminated or when too much information is being extracted.[3]
Another focus of Indjejikian's research is the responsibilities and compensation of CEOs and CFOs of public and private corporations. Several of his papers have examined how firms design their bonus plans for the CFO and CEO and contrast those plans to decision making. The research of these papers was through surveys of members of the American Institute of CPA's. The main findings of these papers were that bonuses are based on the length of executive tenure, size of the firm, and length of the product development and life cycle. The papers also found public companies, relative to private companies have reduced the percentage of bonus based on financial reporting to the extent that the Sarbanes-Oxley Act has made firms much more concerned about the integrity of their financial reports and increased the costs of noncompliance.[4] [5]
With Nanda, Indjejikian argues that incentive problems are a crucial aspect of responsibility accounting. Due to the Ratchet effect, the employer would be better off if both parties can agree on a multi-period contract without subsequent revisions. Two responsibility center structures are analyzed: Consolidated structures are produced when managers are attributed to multiple activities. These structures imply less ratcheting but at the loss of comparative performance information. Specialized structures mean managers are responsible for one activity thus providing a higher level of comparative performance information but also a higher level of ratcheting. Performance evaluation in firms with specialized structures is more informative because of the use of comparative measurements.[6]