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Invitation to the Asper School of Business Eminent Scholar Series
by ASBevents 17 Apr '25

17 Apr '25

[cid:b52cb596-22bf-4160-be3b-a316c504096a] Please join us for an installment of the 2024–2025 Asper School of Business Eminent Scholar Series: The Impact of ASC 842 Adoption on Labor Investment Efficiency Presented by Dr. Nerissa Brown Associate Dean of Graduate Programs Professor of Accountancy Chief Learning Innovation Officer Josef and Margot Lakonishok Faculty Fellow PwC Faculty Fellow Gies College of Business, University of Illinois Urbana-Champaign Thursday, May 1st, 2025 11:30 a.m. to 1:00 p.m. CST Zoom Webinar Please register at the link below: https://ca01web.zoom.us/webinar/register/WN_UT6KRVkOTVSM9-OXTrvHHQ Presentation Abstract: We examine the labor investment consequences of ASC 842, the revised lease standard which requires the recognition of operating leases on the balance sheet. Research finds that operating lease recognition under ASC 842 constrains firms’ financial and operational flexibility and tilts their capital resources toward buying versus leasing. However, an overlooked consequence is the impact of operating lease recognition on labor investment. Using a difference-in-differences research design, we examine changes in labor investment efficiency, such as hiring and firing practices, following the adoption of ASC 842. We find that firms with high operating lease commitments underinvest in labor during and immediately after the adoption year. This result suggests that operating lease recognition leads to workforce reduction as a cost-cutting response to financial constraints induced by the standard change. We further find that this underinvestment response (which can manifest as over-firing or under-hiring) harms employee perceptions of the firm and its management and dampens analyst expectations of firm performance. Taken together, our results highlight the unintended consequences of ASC 842, offering insights into how accounting standards can impact resource allocation and stakeholder perceptions.

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Invitation to the Asper School of Business Research Webinar Series
by ASBevents 07 May '24

07 May '24

[cid:dc07c629-09fc-4b0e-8d30-74a37cc90fe8] Please join us for the second installment of the 2023–2024 Asper School of Business Research Webinar Series: Human Readability of Disclosures in a Machine-Readable World Presented by Dr. Andy Call School Director & Professor, Accountancy Professional Advisory Board Professor School of Accountancy Arizona State University Friday, May 17th, 2024 1:30 p.m. to 3:00 p.m. CDT Zoom Webinar Please register at the link below: https://ca01web.zoom.us/webinar/register/WN_gDckgbRhQTyo4zoAb_gEMg Presentation Abstract: While regulators emphasize the need for machine-readable corporate disclosures, we examine how improvements in machine readability affect the human readability of financial disclosures. Using the passage of the 2018 Inline XBRL (iXBRL) regulation that creates a positive shock to machine readability, we observe a substitution effect between machine readability and human readability. The substitution effect is more pronounced when firms have higher proprietary costs of disclosure, when firm performance is poor, when managers engage in higher earnings management, and when managers are subject to relatively weaker monitoring, consistent with opportunistic reductions in human readability arising when managers have incentives and opportunities to obfuscate information. In addition, the substitution effect is greater when firms are complex and when managers face increased workloads when responding to the iXBRL mandate. Furthermore, we document that retail investors, who generally have less ability to process corporate disclosures with machines and who are more reliant on human readability, reduce ownership in stocks impacted by the iXBRL regulation, and that these disclosures become less informative to retail investors. Our results are robust to a regression discontinuity design and alternative difference-indifferences designs. Overall, our findings indicate that improved machine readability has implications for the human processing of disclosures. Andy Call joined the W. P. Carey School of Business in 2013 and is the Accountancy Professional Advisory Board Professor in the School of Accountancy. Professor Call researches various financial reporting topics, including the role of equity analysts in the capital markets and the role of whistleblowers in the discovery of financial misconduct. In the classroom, Professor Call teaches undergraduate and Ph.D. students. Prior to his appointment at ASU, Professor Call was on the faculty at the Terry College of Business at the University of Georgia.

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Invitation to the Asper School of Business Research Webinar Series
by ASBevents 03 May '24

03 May '24

[cid:5141f25d-6615-41bc-be5e-95e5b6ab59de] Please join us for the second installment of the 2023–2024 Asper School of Business Research Webinar Series: Human Readability of Disclosures in a Machine-Readable World Presented by Dr. Andy Call School Director & Professor, Accountancy Professional Advisory Board Professor School of Accountancy Arizona State University Friday, May 17th, 2024 1:30 p.m. to 3:00 p.m. CDT Zoom Webinar Please register at the link below: https://ca01web.zoom.us/webinar/register/WN_gDckgbRhQTyo4zoAb_gEMg [https://ca01web.zoom.us/w_p/63943841694/3a4ab8ec-6d7b-4218-be80-899f3ef9cf6…]<https://ca01web.zoom.us/webinar/register/WN_gDckgbRhQTyo4zoAb_gEMg> Welcome! You are invited to join a webinar: Human Readability of Disclosures in a Machine-Readable World. After registering, you will receive a confirmation email about joining the webinar.<https://ca01web.zoom.us/webinar/register/WN_gDckgbRhQTyo4zoAb_gEMg> ca01web.zoom.us Presentation Abstract: While regulators emphasize the need for machine-readable corporate disclosures, we examine how improvements in machine readability affect the human readability of financial disclosures. Using the passage of the 2018 Inline XBRL (iXBRL) regulation that creates a positive shock to machine readability, we observe a substitution effect between machine readability and human readability. The substitution effect is more pronounced when firms have higher proprietary costs of disclosure, when firm performance is poor, when managers engage in higher earnings management, and when managers are subject to relatively weaker monitoring, consistent with opportunistic reductions in human readability arising when managers have incentives and opportunities to obfuscate information. In addition, the substitution effect is greater when firms are complex and when managers face increased workloads when responding to the iXBRL mandate. Furthermore, we document that retail investors, who generally have less ability to process corporate disclosures with machines and who are more reliant on human readability, reduce ownership in stocks impacted by the iXBRL regulation, and that these disclosures become less informative to retail investors. Our results are robust to a regression discontinuity design and alternative difference-indifferences designs. Overall, our findings indicate that improved machine readability has implications for the human processing of disclosures. Andy Call joined the W. P. Carey School of Business in 2013 and is the Accountancy Professional Advisory Board Professor in the School of Accountancy. Professor Call researches various financial reporting topics, including the role of equity analysts in the capital markets and the role of whistleblowers in the discovery of financial misconduct. In the classroom, Professor Call teaches undergraduate and Ph.D. students. Prior to his appointment at ASU, Professor Call was on the faculty at the Terry College of Business at the University of Georgia.

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