IN MEMORIAM

George J. Staubus

Haas School of Business, Professor Emeritus

UC Berkeley

1926 – 2014

George J. Staubus, the Michael Chetkovich Professor at the Haas School of Business, passed away on March 21, 2014, at the age of 87. Born in Chariton, Missouri, to George and Florence Staubus, he began his education in a one-room school in northern Missouri, finishing high school in 1943 at the age of sixteen. It wasn’t until Staubus reached the University of Missouri after a year of service in the U.S. Navy that he developed an interest in accounting. He began his teaching career at the age of 21 at the University of Buffalo where he met his wife Sarah. His degrees include a B.S. from the University of Missouri and an M.B.A. and Ph.D. from the University of Chicago. He was a C.P.A. in the state of Illinois. He joined the faculty of the Haas School of Business in 1952, retiring in 1991.

 

Professor Staubus received both domestic and international honors. In 1982 the American Accounting Association named him Distinguished International Lecturer. He was an Erskine Fellow at the University of Canterbury New Zealand in 1972 and 1991. Professor Staubus was Director of Research and Technical Activities at the Financial Accounting Standards Board from 1976 to 1979. He received the Lifetime Achievement Award for distinguished contributions to the accounting program at the Haas School of Business in 2009.

 

Professor Staubus was an active scholar. His bibliography includes 59 items. He dedicated his life’s work to teaching, research and the improvement of the standards and practices of financial reporting. Of particular importance is the development of the “theory of decision usefulness of accounting” begun in his dissertation (An accounting Concept of Revenue, 1958) which was a significant contribution to financial accounting theory in the 20th century. Following articles in The Accounting Review (1958 and 1959), the mature theory was published as A Theory of Accounting to Investors by the University of California Press in 1961. It was republished in the Accounting Classics Series by the Scholars Book Co. in 1970 and translated into Japanese by Hakuto Shobo in 1986.The decision usefulness theory stressed the importance of cash flow-oriented business decisions. This theory provides direction for accounting and financial choices. Under this theory, the primary objective of financial reporting is to provide information that is useful in making investment decisions. Prior to Staubus pointing out the importance of cash flows in investment decisions the emphasis was primarily on accounting based net income.

 

Prior to Staubus pointing out the importance of cash flows in investment decisions, the theory was solely focused on accounting-based net income. Despite numerous rejections of Staubus’ insight in the 1950’s, the academic community embraced the decision-usefulness theory in the sixties, and the standards-setting community followed suit in the seventies.

 

More recently, Staubus commented on the theory in the preface of The Decision-Usefulness Theory of Accounting: A Limited History (1999): “From Today’s perspective, it is not a broad theory of accounting. The key to the decision-usefulness theory is the decision-usefulness objective. It is the base on which a coherent, broad structure of ideas has been built. No other such structure of accounting ideas has been developed, to my knowledge.”

 

The residual equity theory developed by Staubus in an article of 1959 makes common stockholders the center of accounting attention. A company’s residual equity holders take the greatest risk of all the company’s stakeholders because they are the last in line to be repaid if the company goes under.

 

Staubus is survived by his wife of 65 years, Sarah, and their four children, Lindsay, Martin, Paul and Janette. Sarah was also an accounting teacher at the university level.

 

Alan R. Cerf