TOPIC 1: Management’s Responsibility Acceptance, Locus of Breach, and Investors’ Reactions to Internal Control Reports

TOPIC 2:The Publication Process for Top Tier Accounting Journals

Speaker: Hun Tong TAN, Professor in Accounting at the Nanyang Business School, Nanyang Technological University

Host: Prof. HAN Hongling

Time: 15:00-17:00 October 28th, 2016 (Friday)

Venue: Room 702

Abstract: 

TOPIC 1:We report the results of experiments that examine the joint effects of two aspects in management’s explanations for breaches in the internal control over financial reporting (ICFR): the extent to which management accepts responsibility for the breach, and the locus of the breach(external versus internal). We predict and find that in the presence of an external breach, investors assign less responsibility to management and are more willing to invest in the firm when management accepts more rather than less responsibility (Experiment 1); in contrast, the effect of management’s responsibility acceptance is either muted or reverses in the presence of an internal breach (Experiments 2 and 3). We also test our predictions using data hand-collected from 292 ICFR reports. The archival results show that market reactions are less negative when management accepts low (as opposed to high) responsibility for internal breaches.

TOPIC 2: In this part of the talk, Professor TAN will discuss some key pointers to note in the publication process, including identification of viable research topics, co-authors, and managing the review process. The session is intended to be interactive, so please bring your questions and share your experiences.