Four accountancy professors from the University of Nebraska–Lincoln College of Business Administration recently presented their research in Paris at the European Accounting Association annual congress. The conference program included research contributions in auditing and financial reporting by CBA faculty members Dr. Janice Lawrence, Dr. Scott Seavey, Dr. David Smith and Dr. Paul Tanyi.
“The fact we had four faculty members send high quality research to a very well-known and highly respected international conference speaks to our commitment to increasing the quality and quantity of our research,” said Seavey, assistant professor of accountancy.
Seavey also observed the UNL CBA School of Accountancy had double the representation at the conference than any other American university.
“Our presentations were well received, and whenever anyone turned around at the conference, they ran into someone from Nebraska. Our presence and quality research definitely helps raise our profile internationally,” he said.
Dr. Janice Lawrence (black coat) and Dr. David Smith (red hat) pose in Normandy, France
At the conference, Seavey examined the growing trend of companies reporting earnings early without the assurance of auditors. The study was coauthored with Dr. James D. Whitworth of the University of North Carolina Wilmington. This topic was particularly important for the conference’s European audience because Europe is experiencing the same trend.
Seavey explained publicly traded companies ultimately have two choices in deciding when to release earnings to their investors.
“They can either wait until the audit is completed and filed with the Securities Exchange Commission (SEC) to release findings that are reliable yet not as relevant, or they can release earnings early recognizing they do not have the assurance of the auditor, but the information is a lot more relevant to meet investors’ needs,” he said.
Companies are releasing earnings without the full assurance of an audit because of better accounting quality that makes their information more reliable.
“We also found when companies release bad news early, there is actually less of a negative reaction. They are releasing information on their own time and tone, which has a lesser effect on the market,” he explained.
Tanyi, assistant professor of accountancy, examined the effects of audit partner rotation, a measure set forth by the Sarbanes-Oxley Act of 2002.The study investigates the financial reporting quality after an auditor change and the relation to firm size and auditor type. Tanyi coauthored the study with Dr. Barri Litt of Nova Southeastern University, Dr. Divesh Sharma of Kennesaw State University and Dr. Thuy Simpson of Grand Valley State University.
Research led by Smith, Ray Dein Professor & Deloitte Scholar, explored associations between financial statement comparability and equity cost of capital in different market conditions. The study was coauthored by Seavey and Dr. Michael Imhof of Wichita State University. Since their findings contributed to existing research, Smith’s session also included a discussion with Dr. Victoria Clout, an expert on capital markets.
Lawrence, professor of ethics, investigated SEC Division of Corporation Finance (DCF) filings, as well as past theoretical research in management, finance and accounting that provides evidence suggesting the DCF may target companies with strong CEOs and weak monitoring. Their findings cast light on the power struggle between the board and CEO by signifying the CEO’s influence over the board may adversely affect board oversight. The study was coauthored with Smith, Dr. Xiaoyan Chen of University of Nebraska at Omaha and Dr. Lei Gao of SUNY Geneseo.