Madhav V. Rajan

The Robert K. Jaedicke Professor of Accounting

Senior Associate Dean for Academic Affairs

Professor of Law (by courtesy), Stanford Law School

Phone: (650) 724-1546


Academic Areas: Accounting

Madhav Rajan specializes in the economics-based analysis of management accounting issues. His work examines the optimal choice of information and incentive systems in firms and the rationale behind observed internal accounting practices. Rajan has done analytical, empirical, and field-based work on the role of incentives in supply chain contracting, the use of nonfinancial performance measures, and the value of “cost of quality” accounting systems in modern manufacturing environments.


Madhav Rajan is Senior Associate Dean for Academic Affairs at the Graduate School of Business, Stanford University. In that role, he has academic oversight for the MBA program. He is the Robert K. Jaedicke Professor of Accounting at the business school and also a Professor of Law (by courtesy) at Stanford Law School. Madhav joined Stanford University in 2001. From 2002 to 2010, he served as the area coordinator for Accounting at Stanford GSB. Madhav received his undergraduate degree in Commerce from the University of Madras, India, and his MS in Accounting, MBA, and PhD degrees from the Graduate School of Industrial Administration at Carnegie Mellon University. In 1990, his dissertation won the Alexander Henderson Award for Excellence in Economic Theory. After completing his doctoral studies, Madhav joined the faculty of the Wharton School of the University of Pennsylvania and was promoted to the rank of tenured Associate Professor in 1996, and Professor in 2000. Madhav’s primary area of research interest is the economics-based analysis of management accounting issues, especially as they relate to the choice of internal control and performance systems in firms. His theoretical work has examined the optimal choice of information and incentive systems and the rationale behind observed internal accounting practices related to cost allocation and capital budgeting. Madhav has also carried out empirical research, using both archival and field data, on the role of incentive systems, quality-based programs, and buyer-supplier relations. In 2004, he received the Notable Contribution to Management Accounting Literature award for his work with Stan Baiman on “The Role of Information and Opportunism in the Choice of Buyer-Supplier Relationships.” Madhav’s most recent work focuses on the internal control of multi-divisional firms. Topics include the efficiency of auction markets at allocating resources across divisions and the usefulness of bonus pools as a means for incorporating subjective measures of managerial performance. He is also currently involved in several projects on the fundamental question of how accounting measures of performance can be used to infer the economic profitability of firms. In 2008, Madhav completed two terms as an editor of The Accounting Review. He has also served as Departmental Editor for Accounting at Management Science, and as Associate Editor for both the Accounting and Operations areas. He is a member of the Management Accounting section of the American Accounting Association and has twice been a plenary speaker at the AAA Management Accounting Conference. Madhav has taught courses in managerial accounting at the undergraduate, MBA, and executive MBA levels. He has also taught an elective class in financial reporting at Stanford Law School. Madhav has won several teaching awards at Wharton and Stanford, including the David W. Hauck Award, the highest undergraduate teaching honor at Wharton. At Stanford, Madhav participates in a variety of executive education initiatives, including teaching in the flagship Stanford Executive Program and directing an Advanced Management Program for the National Institute of Bank Management (India). He has made invited presentations to the Labor Seminar of the National Football League Management Council and taught in the National Basketball Players Association Program. Madhav is coauthor of a textbook, Cost Accounting: A Managerial Emphasis, the 14th edition of which was published by Pearson Prentice Hall in January 2011. He also coauthored the first edition of Fundamentals of Cost Accounting, published by McGraw Hill-Irwin in 2005. Madhav is a Director of iShares, Inc. and a Trustee of the iShares Trust.

Academic Degrees

PhD, Carnegie Mellon Univ., 1990; MBA 1989; MS 1987; B.Com, Univ. of Madras, India, 1984.

Professional Experience

At Stanford since 2001. Senior Associate Dean for Academic Affairs, Stanford GSB, 2010-present. Area Coordinator for Accounting, Stanford GSB, 2002-2010. Visiting Prof., Chicago GSB, Winter 2007-08. Prof., Wharton School, Univ. of Pennsylvania, 2000-2001; Assoc. Prof., 1996-2000; Asst. Prof., 1990-96.

Selected Publications

  • Discretion in Managerial Bonus Pools: Foundations and Trends in Accounting, 2011
  • Cost Accounting: A Managerial Emphasis: Pearson Prentice Hall, Fourteenth Edition: January, 2011
  • The Incentive Value of Inventory and Cross-Training in Modern Manufacturing: Journal of Accounting Research, September, 2009
  • Depreciation Rules and the Relation Between Marginal and Historical Cost: Journal of Accounting Research, June, 2009
  • Objective versus Subjective Indicators of Managerial Performance: The Accounting Review, January, 2009

Working Papers

  • 1956: Conservatism, Growth, and Return on Investment
  • 2041: Dynamics of Rate-of-Return Regulation
  • 2042R: Stability Properties of the Rate-of-Return Regulation Process

Selected Cases

  • A198: Financial Restatements: Methods Companies Use to Distort Financial Performance

Awards and Honors

  • Notable Contribution to Management Accounting Literature Award, 2004
  • David W. Hauck Award for Outstanding Teaching, 2000
  • Alexander Henderson Award for Excellence in Economic Theory, 1990

Courses Taught



  • Editor: The Accounting Review
  • Assoc. Editor: Management Science (Accounting and Operations); Journal of Accounting, Auditing, and Finance
  • Editorial Board: Review of Accounting Studies