Accounting & Information Assurance Theses and Dissertations
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- ItemAre the voices of customers louder when they are seen? Evidence from CFPB complaints(2022) Mazur, Laurel Celastine; Hann, Rebecca; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This paper exploits a unique policy change in the banking sector – the first disclosure of the customer complaints submitted to the Consumer Financial Protection Bureau (CFPB) – to examine whether regulatory scrutiny represents one mechanism through which the disclosure of customer complaints can affect bank behavior. I find that banks with a higher complaint volume on the disclosure date increase mortgage approval rates relative to banks with fewer complaints in the same county, and that this effect is strongest in financially underserved communities. I further find that the disclosure effect is larger for banks under more regulatory scrutiny, namely, those operating in states with stronger consumer financial protection enforcement and those with prior consumer affairs violations. Taken together, the results suggest that the public disclosure of customer complaints, especially when accompanied by regulatory pressure, can serve as a mechanism for customers to influence banks’ consumer lending behavior.
- ItemBEYOND RISK: VOLUNTARY DISCLOSURE UNDER AMBIGUITY(2022) Rava, Ariel; Zur, Emanuel; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In my dissertation, I examine the impact of ambiguity (Knightian uncertainty), alongside that of risk, on firms’ voluntary disclosure decisions. I confirm the well-known result that an increase in risk—uncertainty over outcomes—is associated with an increase in management guidance (earnings and capital expenditure forecasts). Conversely, I find that an increase in ambiguity—uncertainty over the probabilities of outcomes—is associated with less guidance. Furthermore, I show that ambiguity decreases following voluntary disclosures, consistent with managers being aware of and reacting to heightened ambiguity. Finally, I provide novel empirical evidence showing that guidance under ambiguity has adverse capital market consequences. Even though the ways through which risk impacts managers’ disclosure decisions have been extensively studied in the accounting literature, no extant research has examined whether and how ambiguity impacts these decisions. My findings are consistent with the notion that managers’ take into account the ambiguity in the environment, showing that ambiguity has an important and distinct impact on their voluntary disclosure decisions.
- ItemCAUSES AND CONSEQUENCES OF SUPPLY CHAIN TRANSPARENCY: EVIDENCE FROM SUPPLIER IDENTITY DISCLOSURE.(2021) Choi, Jin Kyung; Hann, Rebecca; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This study examines the determinants and consequences of managers’ choices to disclose the identity about their firm’s first-tier suppliers. I find that reputational benefits, informational benefits, and proprietary costs are important determinants in a firm’s voluntary disclosure choices regarding the identity of suppliers. Further analyses reveal that both shareholders and financial intermediaries find supplier identity disclosures useful. I find that shareholder response to supply chain risk events is timelier for firms that disclose supplier identity. Moreover, supplier identity disclosure appears to help analysts improve earnings forecast accuracy. Taken together, my results shed light on the cost-benefit tradeoffs faced by firms in disclosing supplier identity and how capital market participants use the information disclosed.
- ItemDoes Climate Change Transparency Affect Capital Flows? Evidence from Mandatory Greenhouse Gas Emissions Disclosure(2021) Zotova, Viktoriya; Hann, Rebecca; Zur, Emanuel; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this study, I exploit a quasi-natural experiment—the introduction of the mandatory Greenhouse Gas Emissions Reporting Program (GHGRP) in the United States—to examine the impact of climate change regulations on corporate investments, in particular, the effect of non-financial carbon disclosures on firms’ capital investment location decisions. Using unique project-level data on inter-state and foreign direct investments (FDI) for a sample of U.S. corporations, I document two sets of findings. Within the U.S., firms reacted by increasing investments in more environmentally-oriented jurisdictions, while decreasing investments in less environmentally-oriented jurisdictions, making the domestic profile of investment greener. Outside of the U.S., in contrast, I find that, against a backdrop of declining global FDI, the reduction of U.S. FDI was significantly smaller in less environmentally-oriented jurisdictions, making the international profile of investment less green. These results are driven by firms with lower environmental reputation. I show that a channel for the Program’s effect on investment location decisions is the presence of capital market pressure, which is in alignment with the goals of the Program to raise awareness among stakeholders. Consistent with investment and disclosure theory, the results suggest that firms with lower environmental reputation respond to investor pressures by geographically shifting investments into more eco-friendly locations at home but not abroad. Overall, the study demonstrates that carbon disclosure policies, such as the GHGRP, can have a significant effect on firms’ real decisions as well as potential international spillovers.
- ItemEarnings Uncertainty and Nonprofessional Intermediaries(2021) Hyman, Cody Alyssa; Seybert, Nick; Business and Management: Accounting & Information Assurance; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Prior research is mixed on individual investors’ ability to utilize earnings information and generally credits professional information intermediaries with alleviating processing costs. Over the past decade, individual investors increasingly rely on online social networks to help them process the information they use to trade. This paper investigates the role of earnings uncertainty (persistence, predictability, smoothness, and accrual quality) as a processing cost and the ability of nonprofessional intermediaries to ameliorate this cost. Using comments and trades made on a popular social trading platform as raw and applied information, respectively, I show that raw information is impeded by earnings uncertainty while applied information reduces integration costs to improve the use of earnings information.