Sidney Davidson, a nationally recognized scholar of accounting whose research changed the practice in boardrooms and on Wall Street died Saturday, September 15 at his home in Chicago’s Hyde Park neighborhood. He was 88 and was a distinguished service professor emeritus at the University of Chicago Graduate School of Business.
Davidson was dean of the school from 1969 to 1974 and led efforts to improve its facilities and add more endowed professorships as a means of attracting top faculty. He taught at the school for 41 years, wrote many articles and 15 books including the classic textbook on accounting Financial Accounting: An Introduction to Concepts, Methods, and Uses, now in its 12th edition co-authored with Clyde Stickney and Roman Weil.
In a 1971 article about the influence of the University of Chicago, The New York Times said Davidson is “sometimes called the nation’s number one accountant.” Davidson had, by then, served several years as an accounting standard setter on the Accounting Principles Board, the predecessor to the Financial Accounting Standards Board. His comments and dissents to the then-new parts of generally accepted accounting principles show how he applied the discipline of economics in ways that had never been used by accountants.
Davidson was among the first advocates of focusing accounting on the value of information, ideas and fair values that do not appear on the balance sheet. As a result of developments stemming from his work, companies now include some of these factors, including many controversial fair values, when presenting their accounts.
“His research in the 1950s on the nature of the so-called liabilities for deferred income taxes led his colleagues and students to study the economics of transactions, not just their debits and credits,” said Weil, the V. Duane Rath Professor of Accounting at the school. “Those methods are standard now in financial statement analysis as practiced in corporate America on Wall Street,” Weil said.
Davidson was president of the American Accounting Association, vice chairman of the Financial Accounting Foundation, and when he was elected a vice president of the American Institute of CPAs he became the first academic to be elected an officer of that association of practicing accountants.
He served as a consultant for many businesses and government agencies including the U.S. Treasury Department from 1961 to 1969, and the Securities and Exchange Commission. He also was a frequent expert witness in legal cases involving accounting and tax issues.
“Sidney was a giant in the field of accounting,” said Raymond Ball, the Sidney Davidson Professor of Accounting at the University of Chicago Graduate School of Business. “He was a pioneer in research, accounting standard-setting and academic leadership. On a personal level, he attracted me long ago to study at Chicago, and I now am proud to occupy the chair that bears his name.”
Davidson was a director of Brunswick Corp., Zenith Electronics Corp., and Stone Container Corp. He also served on the boards of Banco di Roma, CNA Income Shares, Duff and Phelps Utility Income Fund, Genesco, Inc. and Hyde Park Bank and Trust Company.
He was elected to the Accounting Hall of Fame in 1983.
In addition to writing Financial Accounting: An Introduction to Concepts, Methods and Uses, he also wrote Accounting: The Language of Business and he edited, with Weil, the Handbook of Modern Accounting.
“Sidney was a role model and mentor for thousands of students and faculty,” said Edward Snyder, dean of the Graduate School of Business. “Even after he retired, he tutored students in accounting as a way to give back to the community,” said Snyder, who also is the George Pratt Shultz Professor of Economics. “Sidney also provided consistent support and guidance to members of our faculty and to the deans who followed him in the leadership of the school.”
Davidson joined the business school faculty at the University of Chicago in 1958 and became director of the school’s Institute of Professional Accounting in 1962, the same year he was named the Arthur Young Professor of Accounting. In 1984, the University’s president named him the Arthur Young Distinguished Service Professor of Accounting.
While he formally retired in June 1999, Davidson continued to teach until 2004 and remained active in scholarship and fundraising activities. He and his wife gave a major gift to help fund construction of the school’s downtown Gleacher Center.
Davidson graduated from the University of Michigan where he received A.B., M.B.A. and Ph.D. degrees.
He is survived by his wife of 62 years, Freda Davidson.
Other survivors include their children Jonathan Davidson and Vicki Goldwyn, son-in-law John Goldwyn and daughter-in-law Joy Davidson, grandchildren Dhruva Davidson, David Goldwyn, Samantha Goldwyn, Brittany Davidson and Danielle Davidson, great-grandson Tyler Markowski Davidson.
Also surviving him are brother David Davidson and sister Delores Sacks.
Funeral services were held on Monday, September 17.
Contributions in his memory can be made to the Freda and Sidney Davidson Library Endowment at the Newberger Hillel Center, 5715 S. Woodlawn Ave., Chicago, IL 60637 or the University of Chicago Graduate School of Business in memory of Sidney Davidson.