Eli Amir is a Professor of Accounting at Tel Aviv University’s Recanati Graduate School of Management and a part time Professor at City University of London (Cass). Until August 2012, Amir was a Professor at London Business School. From May 2000 to April 2003, Amir was the Chairman of the Israel Accounting Standards Board. Amir received his B.A. degree in Accounting and Economics from Tel Aviv University (1986) and his Ph.D. in Business Administration from the University of California, Berkeley (1991). He is a Certified Public Accountant in Israel since 1987. Amir teaches courses in financial accounting, corporate financial reporting, financial statement analysis, financial analysis of mergers and acquisitions and empirical research in accounting. Amir’s research concentrates on financial analysis, equity valuation, pension asset allocation, auditing and the association between personal attributes and corporate decisions. He has published articles in leading academic journals such as the Review of Accounting Studies, The Accounting Review, Journal of Accounting and Economics, and Journal of Accounting Research.
My current research interests focus primarily on financial statement analysis. In particular, I am interested in developing an economic framework for financial ratio analysis. In a recent paper, my co-authors and I show that the market reaction to a ratio depends not only on its unconditional persistence (its autocorrelation coefficient), but on its conditional persistence (the ability of the variable’s persistence to explain the persistence of a variable higher in the hierarchy). We also provide a theory for why ratio analysis is useful in detecting and suppressing earnings management. We argue that ratios are useful because they are more resistant to transitory shocks and manipulations. Building on this theory, we develop a simple measure of earnings quality, which is based on deviations from normal profit margins.