Pa. — Two new accounting faculty members in the Penn State Smeal College of Business share a research interest that connects to their respective backgrounds
Assistant Professor Fred Asante and Associate Professor Rimmy E. Tomy both study the role of accounting in developing economies. That interest was further strengthened when each served as a founding member of the Accounting and Development Forum (ADF), a scholarly community established in 2025 that serves as a shared platform for researchers working at the intersection of accounting, developing economies and entrepreneurship. Now colleagues in Smeal, the two plan to build on that common ground through future research collaborations.
Asante comes to Smeal from Cornell University, where he earned his doctorate in accounting earlier this year. His research examines how financial information, regulation, debt markets and supply chain governance shape credit access and economic behavior in both developed and developing economies.
Before academia, Asante built a professional career in corporate finance and commercial banking at Bank of America and gained additional experience at Deloitte & Touche, J.P. Morgan and Lockheed Martin.
“These experiences inform my research by providing practical insights into the interaction between financial markets, regulatory frameworks and corporate decision making,” he said.
Asante recalled that, when he was considering options for his dissertation, a mentor gave him some sound advice: Look to your background.
“I was born in Ghana, in an area with an informal economy, and I had eight years of banking experience,” he said. “How do I bring together these two elements of my background?”
Asante went back to Ghana to explore how global accounting harmonization – international efforts to align different national financial reporting standards into a consistent framework – is affecting lending in informal economies. He focused particularly on a rule known as IFRS 9, enforced by the International Accounting Standards Board, which requires banks to estimate potential loan losses using forward-looking information.
“In rural areas around the world, including Ghana, many households and small businesses have difficulty accessing loans,” Asante said. “I was curious about what is driving banks’ decisions to reduce lending in these informal economies.”
He hypothesized that the adoption of global accounting standards could contribute to this reduction in lending. And he found that borrowers in high-informal economies face greater difficulty accessing credit because they often lack documentation, such as formal IDs, financial records, credit histories, collateral documentation and other verifiable information that banks use to assess the likelihood of repayment and estimate potential loan losses.
“So, these new standards can create documentation frictions,” he said. “Global accounting harmonization, while intended to improve transparency, can unintentionally exclude certain groups from accessing loans.”
Asante said he plans to do further research into the role of accounting in informal economies, with the goal of expanding his understanding of how policies affect banking activities in informal economies versus formal economies.
Tomy comes to Smeal from the accounting faculty of the University of Chicago and previously worked at Ernst & Young LLP and McKinsey & Company. Her research centers on regulation and enforcement in the financial sector, extending to developing countries, where she said weak formal institutions such as courts, auditing and financial-reporting systems make credit access and effective oversight especially difficult.
That focus grew out of questions she said she had been asking for a long time.
“Growing up in a developing country, I could see issues stemming from an informal economy, and I was interested in understanding more,” Tomy said. “That led to my pursuing research into how financial information — or the lack of it — affects access to credit in informal economies.”
To understand the role of financial information in relationships between wholesalers and retailers in informal markets, Tomy and colleagues studied economic activity in the Iewduh bazaar, a large, historic market in northeast India.
“Bazaars — informal markets where sellers gather to form an assortment of small shops and stalls that offer food items, clothing and household wares — are economic engines that help drive the informal economy,” she explained. “We wanted to know more about how wholesalers in these markets provide credit to retailers in the absence of formal accounting information.”
The researchers found that trade credit in bazaars depends heavily on community ties. Compared with retailers from outside their community, wholesalers were more likely to extend credit to retailers from their own community, offer them more favorable repayment terms and show greater flexibility when payments were delayed.
The researchers argued that this pattern is driven by indirect reciprocity. That is, traders who support fellow community members build a reputation for cooperation, even when doing so involves short-term costs. When they later face financial hardship or an unexpected loss of income, that reputation encourages others in the community to help them in return. As a result, extending credit is not simply a financial transaction but also an investment in a network of mutual support.
This reciprocal system helps traders manage economic shocks and sustains cooperation in markets where formal financial institutions are weak or absent, Tomy said. A downside of such informal arrangements, though, is that credit is not widely accessible.
“The use of accounting information in credit allocation in informal markets has the potential to expand credit access and thereby support the growth and expansion of these businesses,” Tomy said.
In a follow-up study, the researchers found that a key factor that limits the use of accounting information in informal markets was a lack of trust.
“We found that wholesalers did not believe that retailers would report their financials truthfully, and retailers were concerned that wholesalers may misuse their financial information,” Tomy said.
Tomy and her colleagues are now looking further into the problem of distrust in informal markets.
“What does it mean when a wholesaler says they don’t trust a retailer’s financials? Is it mistrust in an individual or is it institutional mistrust, and what are the repercussions of that?” she asked. “Trustworthiness is key to expanding the use of financial information in credit allocation decisions within informal markets, so it’s important to understand this issue.”
Asante and Tomy’s shared research interests helped lead to the formation of the Accounting and Development Forum. Inspired by the success of the <a href="https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbusiness.rice.edu%2Fevent%2Fconference-role-accounting-and-information-frictions-microenterprises&data=05%7C02%7C%7Cbf7a12dbb3184d4129b008dec1777dbf%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C639160916131553086%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=7A9DHLfbK8WafNU5TISoYmjVJI2lwdjSx1Sp4XA10sw%3D&reserved=0″ rel=”nofollow noopener” target=”_blank”>2025 Rice Microenterprises Conference and by ongoing discussions that followed, ADF aims to bring core accounting questions into the context of developing economies.
“We formed ADF because several of us are interested in promoting developing market work within the field of accounting,” Tomy said. “There hasn’t been a lot of work in this area, and there are a lot of open questions. We wanted a forum that brings together a community of people who are interested in developing market work within accounting.”
ADF holds a conference every other year, with the next planned for June 2-3 in Zurich, as well as quarterly online workshops that bring together researchers interested in accounting and economic development. At the 2026 American Accounting Association’s annual meeting, a panel of ADF members, including Tomy, presented and promoted their research. Asante and other ADF founding members also taught a summer school for accounting research for doctoral students in Ghana, focusing on the role of accounting in economic development.
As a new academic year begins at Smeal, Asante and Tomy said they are looking forward to collaborating on multiple research projects.
“Collaborating with Rimmy is one of the reasons I am excited to be here,” Asante said. “We are both looking forward to pursuing our research at Smeal, and we hope to contribute to strengthening Penn State’s position as a powerhouse in this research area.”
Contact
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- awe2@psu.edu
- Cell Phone: 814-863-3798
- http://www.smeal.psu.edu
