Department of Accountancy & Taxation
Conducting research that is relevant to theory, practice and education
Our Faculty and doctoral students discover and publish new knowledge that relates to the role of accounting on businesses, capital markets, and the society.
In line with the varying needs of our students, one of the most diverse in the nation, and our regional businesses, one of the fastest growing in the nation, our research topics vary widely to include financial accounting, managerial accounting, auditing, tax, and accounting theory.
Our research significantly impacts academic business literature. According to BYU 2019 Accounting Rankings, our faculty's research ranks 4th in Texas and 30th in the world, during the last six years, tying with Cornell University and Michigan State University.
Please explore our featured research in leading academic journals:
Click here to see the new Department of Accountancy & Taxation research database:
Faculty: Novia Chen, Assistant Professor
Publication: The Accounting Review (2021)
Title: Aggressive Tax Avoiders: U.S. Multinationals Shifting Domestic Earnings to Zero
Insights: Professor Chen investigates whether U.S. multinational corporations shift income overseas to the point of recording domestic pretax earnings around zero. Firms facing tax incentives to shift income and firms with greater income shifting ability are more likely to report near-zero domestic earnings. In addition, investors value the earnings of these firms higher than that of other U.S. multinational firms, suggesting that, on average, investors hold a positive view of income shifting to the point of recording domestic earnings around zero.
Faculty: Volkan Muslu, Associate Professor
Publication: The Accounting Review (2021)
Title: How Do Firms Change Investments Based on MD&A Disclosures of Peer Firms?
Insights: Professor Muslu shows that a firm’s one-year-ahead capital investments and inventory increase (decrease) when peer firms’ MD&A narratives become more optimistic (pessimistic). This finding is driven by firms that access peer firms’ 10-K filings within seven days of filing, and remains after controlling for other determinants of a firm’s investments as well as economic connections between the firm and peer firms. These findings provide broad insights on the information content and proprietary costs of MD&A disclosures.
Faculty: Yuping Zhao, Assistant Professor
Publication: Contemporary Accounting Research (2021)
Title: How Aggressive Tax Planning Facilitates the Diversion of Corporate Resources: Evidence from Path Analysis
Insights: By measuring tunneling with intercorporate loans disclosed by Chinese listed companies, Professor Zhao analyzes the underlying channels through which aggressive tax planning facilitates the diversion of corporate resources by firm insiders. This research lends some support to recent theory on the importance of taxes to corporate governance by demonstrating how the agency costs of tax planning allow certain shareholders to benefit from firm activities at the expense of others.
Faculty: Steve Crawford, Assistant Professor
Publication: Review of Accounting Studies (2020)
Title: Oil Prices, Earnings, and Stock Returns
Insights: Prior research has failed to document a consistent association between oil prices and stock prices. Professor Crawford proposes and examines whether that failure is due to the need to link oil price changes to firm-level changes in earnings and investments. Professor Crawford finds that the impact of oil prices on a firm’s earnings and investments varies by firm fixed effects more than ten times it varies by industry and time fixed effects combined, indicating that aggregation by industry and time can mask the unique impact of oil prices on an individual firm’s earnings and investments. Professor Crawford also finds that investors react more strongly to oil-related earnings than non-oil-related earnings. By providing a firm-level mapping of the impact of oil prices on performance/ investments and stock prices, these findings extend prior studies that examine the impact of oil prices on the aggregate economy and stock markets.
Faculty: Bin Li, Assistant Professor
Publication: Contemporary Accounting Research (2020)
Title: Economic Consequences of IFRS Adoption: The Role of Changes in Disclosure Quality
Insights: Professor Li’s study adopts a two-step approach to better understand the importance of the disclosure channel on the economic consequences of IFRS adoption. While more disaggregated information provided by IFRS-adopting firms offers incremental capital market benefits (liquidity), all IFRS-adopting firms incur the same costs (audit fees) regardless of the disclosure improvements. Therefore, the cost-benefit trade-offs not only vary across IFRS-adopting countries but also vary across IFRS-adopting firms within a country.
Faculty: Annika Wang, Assistant Professor
Publication: Contemporary Accounting Research (2019)
Title: Maintaining a Reputation for Consistently Beating Earnings Expectations and the Slippery Slope to Earnings Manipulation
Insights: Professor Wang finds that maintaining a reputation for consistently beating analyst forecasts can motivate executives to move from “within GAAP” earnings management to “outside of GAAP” earnings manipulation. Firms subject to SEC enforcement actions consistently beat analyst forecasts in the three years prior to the manipulation period and continue to do so by smaller “beats” during the manipulation period. The manipulation often ends with a miss in expectations. Among all determinants, maintaining the reputation plays a key role in explaining earnings manipulation.
Faculty: Chad Larson, Assistant Professor
Publication: Review of Accounting Studies (2018)
Title: Defining, Measuring and Modeling Accruals: A Guide for Researchers.
Insights: Research on accounting accruals is pervasive. Yet the measurement and modeling of accruals has developed in an ad hoc manner. Professor Larson’s research creates a systematic and comprehensive accrual measurement framework and several accrual modeling innovations.
Faculty: Gerald Lobo, Professor and Arthur Andersen Chair in Accounting
Publication: The Accounting Review (2017)
Title: The Effect of Analyst Forecasts During Earnings Announcements on Investor Responses to Reported Earnings
Insights: With the increased frequency of forecasts during earnings announcements, making (smart) investments seems to be more risk-based than ever before. Lobo’s research examines the implications of analyst forecasts issued during earnings announcements, finding a limited effect on investor response, but a positive trend when forecasts are reinforced with analyst research.
R. Christopher Small
Faculty: R. Christopher Small, Assistant Professor
Publication: Journal of Accounting & Economics 63 (2017)
Title: Does Managerial Sentiment Affect Accrual Estimates? Evidence from the Banking Industry
Insights: A growing body of research considers the role of sentiment in financial decisions. Using a sample of public banks, Professor Small’s research finds that managerial sentiment (i.e., managers’ unjustified beliefs about future firm outcomes) is associated with errors in accrual estimates. Results are similar for private banks, suggesting that accrual manipulation related to capital market incentives is unlikely to explain the results.
Faculty: Amy Sun, Associate Professor
Publication: Contemporary Accounting Research 33 (2016)
Title: Abnormal Accruals and Managerial Intent: Evidence from the Timing of Merger Announcements and Completions.
Insights: Companies boost earnings to inflate their stock prices before mergers and acquisitions. Professor Sun’s research documents that acquiring firms with the most inflated earnings exploit investor inattention by announcing mergers on Friday while distancing some of their earnings management activities from the merger announcement date.
Faculty: Saleha Khumawala, Professor
Publication: The Accounting Review 90 (2015)
Title: Executive Compensation and Regulation-Imposed Governance: Evidence from the California Nonprofit Integrity Act of 2004
Insights: The California Nonprofit Integrity Act of 2004 is intended to make executive compensation of charitable corporations “just and reasonable”. However, Khumawala’s research documents that the level of CEO compensation increased during the post-regulation period but pay performance sensitivity did not.
Faculty: Haijin Lin, Associate Professor
Publication: Review of Accounting Studies 20 (2015)
Title: Welfare-enhancing Fraudulent Behavior
Insights: Professor Lin distinguishes between undetected fraud and likelihood of fraud. Undetected fraud always harms both an organization and its auditor. Yet, increased likelihood of fraud can induce the auditor to increase auditing effort. This in turn reduces the incidence of undetected fraud and thereby benefits both the organization and the selected auditor.
Faculty: Janet Meade, Associate Professor
Publication: Journal of the American Taxation Association 37 (2015)
Title: Strategic Corporate Tax Lobbying
Insights: Professor Meade’s research sheds light on the lobbying activities of tax-sophisticated firms either to obtain tax benefits (strategic lobbying) or to avoid losing one (defensive lobbying).
Faculty: Tong Lu, Associate Professor
Publication: Journal of Accounting Research 52 (2014)
Title: Do Joint Audits Improve or Impair Audit Quality?
Insights: Joint audits are meant to improve audit quality, as conventional wisdom suggests that two is better than one. However, Professor Lu argues that joint audits by one small audit firm and one large audit firm may impair audit quality due to free-riding problem.
Faculty: Emre Kilic, Associate Professor
Publication: The Accounting Review 88 (2013)
Title: The Impact of SFAS 133 on Income Smoothing by Banks through Loan Loss Provision
Insights: Under SFAS 133, financial institutions recognize any hedge ineffectiveness in income as it occurs. Kilic’s research finds that banks that are affected by SFAS 133 use their discretion in loan loss provisions (LLP) to smooth income. Such actions impair the ability of LLP to predict loan defaults.
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