Three of our professors have research papers just accepted to the Contemporary Accounting Research (CAR) Conference. The conference is an opportunity for the accounting community to celebrate the diversity of accounting research.
Professors Steven Kachelmeier (UT), Michael Williamson (UT) and Todd Thornock (Iowa State) co-authored the paper, "Communicated Values as Informal Controls: Gaining Accuracy While Undermining Productivity?" They used experimentation to show that a statement emphasizing the importance of accuracy can actually lower the effectiveness of an incentive scheme to motivate accurate production. They suggest that too much emphasis on accuracy can suppress a more open production strategy that tolerates and corrects mistakes as a means to greater long-term efficiency.
Professors Lisa Koonce (UT), Jeffrey Miller (Notre Dame) and Jennifer Winchel (Virginia) had their paper accepted, "The Effects of Norms on Investor Reactions to Derivative Use" Both Jeffrey Miller and Jennifer Winchel are UT grads. Prior research indicated a firm's use of derivatives to manage business risks was viewed favorably by investors. But these studies did not consider a potentially key factor in this setting: the norms regarding derivatives by other firms in the industry or the firm itself. This paper details the results of multiple experiments that test whether norms are influential in affecting investors’ evaluations of firms’ derivatives choices. Their results showed that the generally favorable reactions to derivative use may actually reverse and become unfavorable, depending on the industry and firm norms regarding derivatives. Somewhat surprisingly, though, they found that industry and firm norms are not viewed similarly by investors.
We are so proud to have the Department of Accounting strongly represented at this conference. The CAR Conference is an invitation only event that draws researchers from around the world and from all formats of research.