Q&A with Accounting Pioneer Jagdish Gangolly

Jagdish Gangolly in his orchard

 

Emeritus Associate Professor Jagdish Gangolly taught and researched at UAlbany from 1979 until 2011, first in the School of Business where he served as chair of the accounting department from 2005 to 2008. He then joined the College of Computing and Information (now the College of Engineering and Applied Sciences). He rained in that college until his retirement in 2011, when he was named a Vincent O’Leary Associate Professor Emeritus of Informatics.

During his tenure, he explored the field of textual analysis well before it became of interest to the accounting research community. Textual analysis, based on linguistics theory, systematically analyzes the content, structure and functions of written work. In accounting, textual analysis is used on financial disclosures, accounting standards, financial articles and other items to draw inferences regarding events such as fraud, bankruptcy, stock prices, future firm performance and financial restatements.

In response to industry, Gangolly developed graduate concentrations in accounting information systems for accounting and MBA students, and an MS in forensic accounting.  He also established the Junior Accounting Orientation which continues to be sponsored by top public accounting firms.

Gangolly was awarded the President’s Award for Excellence in Teaching, and the SUNY Chancellor's Award for Excellence in Teaching.

Prior to his arrival at UAlbany, Gangolly taught at the University of Pittsburgh where he earned his PhD, the University of Kansas, Claremont McKenna College and the Claremont Graduate School in California and California State University at Fullerton.

Before arriving in the U.S., Gangolly held senior executive positions in pulp and paper and soft-drink franchising industries in India. He earned a bachelor’s degree in mathematical statistics from the University of Bombay and a master’s degree in operations research from Calcutta’s Indian Institute of Management.

Gangolly answered the following questions from his home in Claremont, California.
 

1.    Why accounting?

In school, I wanted to study materials engineering because I loved mathematics and chemistry. But could not because of family circumstances, so majored in mathematical statistics to be an actuary. After graduating, I changed my mind and studied operations and industrial engineering for my MBA. I came to the U.S. for a PhD in operations research in 1973, but my thesis advisor passed away within four months of my entering the doctoral program. Since I could not find a mentor elsewhere, I had to change my major to accounting. Since my return ticket to India had expired and I had no money to buy a ticket to go back, it was the best option. So, I became an accounting PhD. But I had worked in India for some time designing accounting systems, and that helped.

Accounting impacts every person whether (s)he likes it or not. So, for any student it is important to have some accounting background. Many will find a passion for it, and it was my job to arouse that passion. I am glad I became an accountant even though I do research in diverse areas of accounting as well as applied computer science.
 

2.    How did you end up at UAlbany?

Way back in 1975 when I passed my PhD comprehensives, I was running out of my scholarship funding and so started applying for jobs. I did get about four offers including Albany. But I decided to stay back, complete the degree and then look for jobs. Luckily, I found a teaching assistantship, completed PhD, and decided to go to University of Kansas mainly because they had a well-known PhD program. In two years, when I got married, I had to move again. Thankfully both of us got jobs in Albany, I at the university and my wife at Albany Medical Center. I fell in love with Albany as soon as I arrived. I found their faculty outstanding university-wide and its reputation as “Princeton-on-Hudson” impressed me.  I spent my entire career at the University at Albany except for a few years on sabbatical or teaching elsewhere. All my published papers carry the SUNY Albany label.
 

3.    What can you tell me about developing the groundbreaking concentration in accounting information systems?

As my research interests moved towards computer science, on hearing from the accounting firms about shortage of information systems knowledgeable accountants, I thought it would be a good idea to develop curriculum in AIS that was highly selective, highly technical and a rather difficult program. We got the best students: graduates of great universities such as Cornell, Columbia, Cambridge (United Kingdom), Würzburg (Germany) and the London School of Economics. We set up the Arthur Andersen Lab with up-to-date technology. The firms were excited. Unfortunately, the enrollments did not come up to our expectations.


4.    Why the research focus on textual analysis?

In accounting most of the research has dealt with numeric information in the financial reports. However, numerical information can be unreliable, doctored. On the other hand, textual information was not studied until fairly recently. We started working on a number of topics such as building lexical resources to aid searching information (Yi-Fang Wu), developing algorithms to reconstruct applicable accounting standards for a given date on-the-fly (Ingrid Fisher), extracting structural relations between domain concepts that can be useful in accounting as well as systems security based on Biometric authentication (Stephen Buerle), and textual analysis to detect fraud strictly by analyzing textual data in the financial reports (Sunita Goel). Most of these were done by doctoral students in information science.
 

5.    What led you to develop the Junior Accounting Orientation?

I have always been fascinated by the rituals surrounding entry of young students in other professions. Medical schools, for example, have white coat ceremonies and the Hippocratic oath. They are not just rituals but a re-orientation of the lives of those students. I got most information from my late wife who herself was a physician, and from children of my cousins and friends who also were physicians.  When I suggested the idea to the accounting firms, they were very excited, and we had complete cooperation of the then Dean Paul Leonard throughout the process.
 

6.    What did you do at the College of Computing and Information? How did that fit with your previous work in the School of Business?

I was among three tenured faculty recruited by then Dean Peter Bloniarz of the College of Computing & Information to start the Department of Informatics (the others being Professors Steve DeLong (Earth Sciences) and Tim Lance (Mathematics). The department was to be the center of university’s efforts for research and education in the application of computer science methods in all scholarly domains in the university such as Physics, Psychology, Geography, Library Science, Sociology, Criminal Justice, Social Welfare, Fine Arts.

I was the director of the inter-disciplinary PhD program in information science, and a faculty member in the knowledge organization & management, and information assurance specialization. Since my area within accounting was accounting systems and auditing, my association with IA was a natural fit in CCI. The work I did in KOM was an outgrowth of my interest in text analysis within the accounting domain. The work in both specializations led to my chairing 14 PhD dissertations of which eight were accounting-related especially to auditing and AIS.
 

7.    I heard that you are still doing research.  Would you tell me about a recent project?

Yes. In 2020, I had a paper on computational aspects of segregation of duties in auditing published in the prestigious Australian journal Abacus. It was written in collaboration with Professor Rosemary Kim of the Loyola Marymount University in Los Angeles, and Professors Daniel Rosenkrantz and S.S. Ravi from the Department of Computer Science at UAlbany. The paper builds algorithms for finding an assignment of people to tasks in large organizations, and verifying that a given assignment does not violate any SoD rules. The former should be useful in management, and the latter should make the task of auditing real-time accounting transaction processing systems easier. 

Another paper reviews all work in the area of SoD for the past 50 years and is being revised for submission. Now we are doing data analysis of 50000+ documents in the Stanford Database on cases under Private Securities Litigation Reform Act in order to identify the topics covered by the cases so we can study the trends in such litigation and the areas in accounting covered by them. We expect to extend this study later to the text analysis of the entire SEC’s EDGAR database for 1995-2020 to identify the evolution of corporate accounting issues over the quarter century. Most accounting researchers have been using data purveyed by CRSP, Compustat, and Audit Analytics. However, all three of these databases contain massaged data. Our study includes only actual corporate filings with the SEC.
 

8.    Are you involved in any other professional activities?

I am semi-active in the American Accounting Association, and at times attend their conferences. I also am member of Association for Computing Machinery, and the International Association for Artificial Intelligence and Law, but am not very active in them.
 

9.    Are there any former students that you are particularly proud of?

Seven who come to mind are:

  1. Ingrid Fisher, currently the chair of accounting at Albany.
  2. Timothy P. Hedley, a senior forensics partner at KPMG who retired last year.
  3. Randolph Deyulio, a managing partner with Deloitte in New York.
  4. Bettina Curtze, vice president at Rocket in Berlin, Germany.
  5. Ulrich Beck, an entrepreneur who started the Tridui Insurance Project in Frankfurt, Germany.
  6. Juri Kondratev, vice president at Metlife in New York.
  7. Stephen Buerle, vice president for cybersecurity, JP Morgan Chase & Co. New York
     
10.    What would you like your legacy to be?

To be considered a fair and honest man who helped students.
 

11.    How are you holding up during the pandemic?

Not great, but am coping. I am getting the vaccine in two days.
 

12.    What are your leisure interests?

Gardening is my passion. When my wife was alive, we grew most of our vegetables, more than our requirements of fruits (pomegranates, pomelos, navel oranges, lemons, black mission figs, guavas, pineapple guavas, peaches and olives), and flowers (sixty rose bushes, gardenia, citronella and narcissus). Now I have had to slow down because of my health and missing my wife who always was there with me in the garden.

My second passion is Indian classical music of a particular genre called Dhrupad (meaning poetry set to music). It is nearly 2,000+ years old. I manage a group on Facebook that is 450+ strong and includes members from over a dozen countries speaking dozens of different languages.
 

13.    Family members?

 My wife passed away three years ago. I have two daughters. The older one was a senior producer of the Larry King Now show, but now is waiting to see her kids grow so she can get back to work. My younger daughter works for Facebook in San Francisco.