News

Ramanan Work Published

Author: Lorie Marsh

Congratulations to Ram Ramanan, who recently had two papers published:

  • An analysis of trading volume response to regulatory events affecting major coal mining firms, (with Matthew Hayes and Kirk Phillipich) Oil, Gas & Energy Quarterly, Vol. 67,  No. 3, 2019, pp. 435-444.           
  • An inter-temporal analysis of the volatility of oil spot prices and CEO compensation in the oil and gas industry, (with Kirk Phillipich and Junghyun Lee) Oil, Gas & Energy Quarterly, 

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Milani Article Published

Author: Lorie Marsh

Ken Milani’s article, “Seeking shelter: Pondering the potential and problems,” co-authored with Richard Rodriguez, was recently published in the October 2019 issue of The Tax Magazine. Richard is a Double Domer, with both undergraduate and MSA degrees from ND.

 

Abstract: As federal income tax rates drop and the individual alternative minimum tax (AMT) decreases or disappears, the appeal of and interest in tax shelters appears to be diminishing. When one adds the "target marketing" of shelters to the mix, it's easy to understand why many practitioners find themselves with little or no experience or exposure to the potential and the problems of tax shelters. Nonetheless, increased IRS scrutiny of investments that allow for tax avoidance, and at times tax evasion continues. This heightened level of attention generates investigations that focus on whether or not an offering is an "abusive tax shelter." Questions are posed such as: Does the investment have beneficial societal outcomes? Are the tax benefits exaggerated? All of these elements combine in a manner that makes it important for tax practitioners to understand the benefits and the blemishes of tax shelters.…

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Badertscher Paper Accepted at Journal of Management Accounting Research

Author: Lorie Marsh

Brad Badertscher's paper, Private versus public corporate ownership: Implications for future changes in profitability, has been accepted by the Journal of Management Accounting Research.

Abstract: Managers have long debated the implications of public and private corporate ownership; however, little empirical research has provided insight into the issue. Among their findings, Brad and his co-authors discovered robust evidence that public firms are associated with significantly lower future changes in operating profitability compared to private firms matched on current profitability, size, growth and industry. The results provide insight for managers and investors into the differential future changes in profitability of public versus private firms and into the factors that drive the differential profitability.…

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Badertscher Promoted

Author: Lorie Marsh

Accountancy's Brad Badertscher was appointed as the Deloitte and Touche Professor of Accountancy as of January 1, 2020. Congratulations, Brad!…

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Kowaleski Ethics Paper Accepted

Author: Lorie Marsh

Congratulations to Zach Kowaleski for his first-round acceptance at the Journal of Financial Economics of his paper, "Can ethics be taught? Evidence from securities exams and investment adviser misconduct," co-authored with Andrew G. Sutherland and Felix W. Vetter. The abstract follows. 
 
We study the consequences of a 2010 change in the investment adviser qualification exam that reallocated coverage from the rules and ethics section to the technical material section. Comparing advisers with the same employer in the same location and year, we find those passing the exam with more rules and ethics coverage are one-fourth less likely to commit misconduct. The exam change appears to affect advisers’ perception of acceptable conduct, and not just their awareness of specific rules or selection into the qualification. Those passing the rules and ethics-focused exam are more likely to depart employers experiencing scandals. Such departures also predict future scandals. Our paper offers the first archival evidence on how rules and ethics training affects conduct and labor market activity in the financial sector.  

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Recently Published Work

Author: Lorie Marsh

Tonia Murphy's paper "The Right of Publicity: Worth a Closer Look in the Classroom," was published in the Journal of Legal Studies Education (Vol. 36, Issue 2, Summer 2019).…

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2019 Notable Contribution to Management Accounting Literature Award

Author: Lorie Marsh

Asis Martinez-Jerez received the 2019 Notable Contribution to Management Accounting Literature Award for "The performance effect of feedback frequency and detail: Evidence from a field experiment in customer satisfaction," Journal of Accounting Research, 55/5 (December 2017): 1051-1088, co-authored with Pablo Casas-Arce and Sofia Lourenco. Asis and his co-authors were presented with this prestigious award yesterday at the American Accounting Association meeting in San Francisco.…

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Paper Acceptances

Author: Lorie Marsh

Brad Badertscher's paper, "Private versus public corporate ownership: Implications for future changes in profitability," co-authored with Kristian D. Allee and Teri L. Yohn, has been accepted for publication at the Journal of Management Accounting Research.

 

Andy Imdieke's paper, "On the relation between insider trading and going concern opinions," co-authored with Nicholas Hallman, Kyonghee Kim, and Raynolde Perreira, has been accepted for publication at Auditing: A Journal of Practice and Theory

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Outstanding Service Award

Author: Lorie Marsh

Brad Badertscher received the Outstanding Service Award from the Financial Accounting and Reporting Section (FARS) of the American Accounting Association for his service on the FARS Steering Board Committee.…

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Department of Accountancy Names New Lizzadro Chaired Professor

Author: Lorie Marsh

Hal White is the Vincent and Rose Lizzadro Professor of Accountancy. Before joining Mendoza in 2019, he spent five years at Penn State's Smeal College of Business, and six years at the University of Michigan’s Ross School of Business, where he taught in both undergraduate and graduate (Masters and PhD) programs. Before entering academia, Professor White worked in public accounting as an auditor in the late 1990s, first with Deloitte & Touche LLP, then with Pearce, Beville, Leesburg and Moore LLP. Professor White's research focuses broadly on corporate disclosure. In particular, his research includes assessing the quality of financial reports, disclosure externalities, disclosure regulation, and managerial signaling. He also examines the impact of recent innovations in information technology on firm communications.…

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Latest Burks paper accepted by RAST

Author: Lorie Marsh

Please join us in congratulating Jeff Burks on the acceptance of Competition and voluntary disclosure: Evidence from deregulation in the banking industry (with coauthors Cuny, Gerakos, and Granja) by the Review of Accounting Studies. Congratulations Jeff!…

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Badertscher Paper on Private Ownership and Public Debt Published

Author: Lorie Marsh

Brad Badertscher's paper (co-authored with Sharon Katz, Dan Givloy, and Hanna Lee) "Private Ownership and the Cost of Public Debt: Evidence from the Bond Market" has been accepted for publication in Management Science.

A number of studies have examined the effect of public and private ownership on the cost of debt and conclude that the cost of debt of privately owned firms is higher, driven mainly by the poorer information environment in which these firms operate. We extend this strand of research in two ways. First, we identify and empirically establish the mechanisms that bring about a higher cost of debt to privately-owned firms, namely the limited access that these firms have to the equity capital market, their high rate of management and private-equity ownership, and their less conservative reporting. Second, we improve the reliability of the estimates of the effect of ownership type on the cost of debt by controlling for the different information environments in which privately- and publicly-owned firms operate. This is accomplished through the use of a sample consisting of publicly-owned and privately-owned firms that have public debt and are therefore subject to identical reporting and disclosure requirements. Certain data and design features allow us to better control for other factors that might lead to the observed difference in the cost-of-debt between the two groups of firms. The results contribute to our understanding of the role of ownership type on the cost of capital.…

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Ramanan Publishes Paper In Oil, Gas & Energy Quarterly

Author: Lorie Marsh

Ram Ramanan's paper with Kirk Phillipich and Bruce Bublitz, "One Conspirator or Two in the Death of the Coal-Miner's Daughter", has been accepted for publication by Oil, Gas, & Energy Quarterly.

This research attempts to address the question of who was culpable in the market decline experienced by coal companies during the 2014 through early 2016 time period.  Was the coal industry being creatively destroyed as more climate-friendly substitutes (e.g. natural gas) became more viable and less expensive?  Alternatively, did the role played by the regulatory process, at a minimum, contribute to the coal industry’s demise?…

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Larocque Publishes paper on Cost of Equity Capital Estimates

Author: Lorie Marsh

Stephannie Larocque's Paper, "Manager's Cost of Equity Capital Estimates: Empirical Evidence," will be published in the Journal of Accounting, Auditing and Finance. Larocque co-authored the paper with Alastair Lawrence, UC Berkeley, and Kevin Veenstra, McMaster University.

 Abstract:      

Using actual practice data from U.S. corporate treasury executives, we provide initial evidence of managers’ internal estimates of their firms’ cost of equity capital (COEC) and extrapolate managers’ estimation practices to the broader population of public firms. Our study provides insights into the assumptions managers use in applying the capital asset pricing model (CAPM), the model that managers generally use to estimate their firms’ COEC according to prior research. We show that COEC estimates based on managers’ surveyed estimation practices are positively correlated with realized returns only in the pre-survey period, suggesting that managers set their COEC estimates in a backward-looking manner. Moreover, managers’ estimates are most correlated with estimates reverse-engineered following Easton (2004) and Gode and Mohanram (2003).…

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Why Bank Earnings Report Might Be Old News

Author: Lorie Marsh

Many publicly traded banks wrapped up their second-quarter earnings reports before the end of July. Some banks didn’t, but for that group, investors actually might have had an early window into their performance: The banks’ quarterly regulatory filings, known as “call reports,” were likely already available, according to a new study by researchers at the University of Notre Dame.

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Want An Early Peek At Bank Profits? Get It From U.S. Government

Author: Lorie Marsh

There’s a hidden way to get detailed financial data on publicly traded U.S. banks days before the companies release their earnings. The information is accurate, free, and -- most important -- totally legal.

The source is the federal government, which publishes snapshots of banks’ financial pictures, known as call reports, on a hard-to-find website

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New Study Shows That Call Reports Matter to US Markets

Author: Lorie Marsh

Independent research by the University of Notre Dame shows that bank call reports have a material effect on U.S. equity markets. Conclusions also state that the effect increases as asset size decreases, indicating that small and medium-sized banks are quietly releasing a flood of mandatory but market-moving information to the public with little to no fanfare.…

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