Accounting research insights

Citation: Beck, M., Constance, P., & Li, C. (2025). Risky business: The impact of audit office experience with financially distressed clients on going concern opinions and audit costs. Auditing: A Journal of Practice & Theory. 44 (1):1–26.

KU Business faculty co-authors: Matthew Beck and Chan Li

Research objective

This study examines whether audit offices that have previously worked with financially distressed companies develop experience that helps them make better judgments about a company’s ability to continue operating.

The researchers focus on office-level experience rather than individual auditors to understand how shared learning may occur within audit teams. The study examines how this experience relates to the accuracy of going-concern opinions, which are warnings included in audit reports when a company may not survive. It also examines whether this experience is associated with audit fees and legal exposure for audit firms.

Overall, the objective is to determine whether repeated exposure to high-risk clients shapes audit reporting quality and related outcomes.

What the researchers find

The researchers find that audit offices with greater experience auditing financially distressed clients tend to issue more accurate going-concern opinions. These offices are less likely to issue warnings that later prove unnecessary and less likely to miss cases where a warning would have been appropriate. The findings suggest that this experience improves judgment rather than simply making auditors more conservative or more lenient. The study also finds that these audit offices generally charge lower audit fees to distressed clients, which may reflect greater efficiency or lower perceived legal risk. These patterns are strongest among audit offices outside the largest global audit firms, while results are more limited among the largest firms.

Why it matters

Going-concern opinions are important signals for investors, lenders, and other stakeholders who rely on audit reports to assess financial risk. Errors in these opinions can impose real costs, either by raising unnecessary alarms or by failing to warn about serious trouble.

This study highlights that hands-on experience with difficult clients can help auditors improve the quality of these judgments. The findings also suggest that experience may reduce costs for financially strained companies and lower legal risk for auditors. For regulators and practitioners, the study provides insight into how audit quality can improve through learning and experience rather than only through rules or oversight.

Citation: Brazel, J.F., K.L. Jones, and Q. Lian (forthcoming). Auditor use of benchmarks to assess fraud risk: The case for industry data. Current Issues in Auditing.

KU Business faculty co-author: Keith Jones

Research objective

This study examines how auditors develop expectations when assessing the risk of revenue misstatement due to fraud. The researchers focus on the benchmarks auditors use during early planning, such as prior period results, relationships within a company’s own data, and information from outside the company. They seek to understand whether some of these benchmarks are more effective than others at highlighting potential warning signs of revenue manipulation.

The study also compares what auditors report in practice with the benchmarks that have historically been most informative. Overall, the objective is to identify which benchmark types best support fraud risk assessment.

What the researchers find

The researchers find that auditors most often rely on prior-period balances and relationships within the client’s financial data when assessing fraud risk. Benchmarks based on industry data, nonfinancial measures, and cash flows are used less frequently. However, when the authors examine actual cases of revenue fraud, they find that industry-based benchmarks perform better than those commonly used in practice.

In particular, large gaps between a company’s revenue growth and its industry's revenue growth are strongly associated with fraudulent reporting. Other benchmarks tied closely to client-reported data tend to be less informative, likely because management decisions can influence them.

Why it matters

Revenue fraud can be difficult to detect and can cause serious harm to investors, companies, and auditors. This study shows that commonly used audit practices may rely too heavily on benchmarks that are less effective at revealing fraud risk. The findings suggest that industry comparisons can provide clearer warning signs and help auditors focus their attention on higher-risk areas.

For audit professionals, the study offers practical insight into how expectations can be set more effectively without relying on complex models. For regulators and other stakeholders, it highlights the value of external reference points when evaluating the credibility of reported financial performance.

Citation: Ciconte III, W.A., Leiby, J. and Willekens, M., 2025. Where does the time go? Auditors’ commercial effort, professional effort, and audit quality. Journal of Accounting Research, 63(1), pp.255-317.

KU Business faculty co-author: Will Ciconte

Research objective

This study examines whether auditors’ time spent on commercial activities, such as business development and client acquisition, undermines audit quality. Audit theory and regulation often assume that commercial motives conflict with auditors’ professional responsibilities, yet there is little direct evidence to test this assumption. Using detailed internal data from large audit firms, the researchers investigate how auditors’ commercial effort relates to their compensation, the total effort devoted to audits, and audit quality outcomes.

The study focuses on senior auditors, for whom commercial responsibilities are most relevant. Overall, the objective is to evaluate whether commercial effort poses a real threat to audit quality.

What the researchers find

The researchers find no evidence that auditors who devote more time to commercial activities reduce audit effort or deliver lower audit quality. Commercial effort is not consistently associated with higher compensation, and the relationship varies across firms and roles.

Importantly, greater commercial effort is not directly linked to poorer audit outcomes. Instead, auditors with higher commercial effort tend to rely more on technical consultations, particularly on accounting and auditing issues, which is associated with higher-quality outcomes, such as more modified audit opinions. The finding suggests that commercially active auditors maintain audit quality by using firm quality control mechanisms rather than cutting corners.

Why it matters

This study challenges a long-standing assumption in audit regulation that commercial motivation inherently threatens audit quality. By showing that commercial effort does not reduce audit effort or quality, the findings raise questions about regulatory approaches that seek to limit auditors’ commercial activities. The results suggest that audit quality depends less on suppressing commercial incentives and more on ensuring strong quality control systems, such as access to technical expertise.

For regulators and firms, the study highlights the importance of designing oversight and support mechanisms that allow auditors to balance commercial responsibilities without compromising professional standards.

Citation: Lennox, C., C. Li, and Y. Wang. 2025. A survey of the archival audit literature, forthcoming at Contemporary Accounting Research.

KU Business faculty co-author: Chan Li

Research objective

This study reviews and organizes a large body of archival research on external auditing to help readers better understand how audits work. The authors aim to synthesize prior studies on audit markets, audit quality, and audit personnel, while clarifying key concepts that are often misunderstood or inconsistently used.

The paper focuses on explaining how existing research measures audit-related constructs and what those measures actually capture. The authors also seek to identify limitations in commonly used approaches and highlight areas where additional research would be most valuable.

What the researchers find

The review shows that much of the audit literature relies on indirect measures because core concepts such as audit assurance and audit quality cannot be directly observed. In studies of audit fees, researchers typically estimate simplified relationships rather than separate demand and supply forces, which limits how results should be interpreted.

The authors find that audit quality is often conflated with financial reporting quality, even though the two are distinct and influenced by both auditors and clients. They also find wide variation in how studies measure audit quality, with some measures better reflecting auditor behavior than others. Finally, the review documents growing interest in audit personnel and audit processes, while noting that many early stages of the audit remain underexamined due to data constraints.

Why it matters

Audits play a central role in supporting trust in financial reporting, yet misunderstandings about how audits are measured can lead to misleading conclusions. This review helps practitioners, regulators, and researchers better interpret audit research by clarifying what common measures do — and do not — represent.

By distinguishing audit quality from client reporting quality, the study provides a more accurate lens for evaluating audit performance. The paper also highlights where evidence is strong and where caution is warranted, offering guidance for more informed decision-making and future inquiry.

Citation: Constance, P., Lennox, C., & Li, C. (2025). PCAOB inspection deficiencies and future financial reporting quality: Do the types of deficiencies matter? Contemporary Accounting Research. 42 (1):121–152.

KU Business faculty co-author: Chan Li

Research objective

This study examines whether inspection reports from the Public Company Accounting Oversight Board (PCAOB) help predict which audit firms are more likely to have clients with future financial statement misstatements. The researchers look beyond the specific audits that were inspected and ask whether the inspection results signal risk across the audit firm’s broader client portfolio.

They also examine whether certain types of inspection deficiencies are more informative than others for forecasting future misstatements. The study compares patterns for the largest audit firms versus other audit firms. Overall, the objective is to assess how useful inspection findings are for anticipating future reporting problems and which kinds of deficiencies matter most.

What the researchers find

The researchers find that audit firms with more PCAOB-identified deficiencies are more likely to have future misstatements among their clients after the inspection report is issued. This relation appears to hold across the audit firm’s client base, not only for the engagements that were inspected. Among different types of deficiencies, the strongest predictor of future misstatements is when inspectors cite problems suggesting the auditor did not adequately understand the client’s accounting procedures or policies.

Some other deficiency types also predict future misstatements, but the pattern differs by audit firm size. For the largest audit firms, failure to understand the client is the only deficiency type that reliably predicts future misstatements.

Why it matters

Inspection reports are widely used by regulators, audit committees, and other decision-makers, but there is ongoing debate over their informativeness. This study suggests the reports can provide useful signals about future financial reporting risk, even after firms have had an opportunity to respond and remediate. It also indicates that not all deficiencies carry the same implications, which may help users interpret inspection reports more carefully.

For audit firms, the findings highlight that weaknesses in understanding a client’s accounting approach can have broad consequences across engagements. For oversight bodies and market participants, the results offer a clearer way to focus attention on the types of inspection issues that are most closely linked to later misstatements.

Citation: Li, C., Stack, K., Sun, L., & Xu, J. (in press). Enterprise risk management and management earnings forecasts. Management Science. 

KU Business faculty co-authors: Chan Li and Kristin Stack

Research objective

This study examines whether adopting enterprise risk management affects managers’ decisions to issue earnings forecasts and the quality of those forecasts. The researchers focus on enterprise risk management as a firmwide approach to identifying and managing risks rather than isolated risk controls. They explore whether this approach helps managers better assess uncertainty when communicating expectations about future performance.

The study also considers whether the effects differ across forecast time horizons. Overall, the objective is to understand how a firm’s risk oversight approach relates to its voluntary earnings guidance.

What the researchers find

The researchers find that firms adopting enterprise risk management are more likely to issue earnings forecasts and that those forecasts tend to be more accurate. The findings suggest that enterprise risk management helps reduce unexpected fluctuations in performance and improves how managers process information about uncertainty in both internal operations and external conditions affecting the firm. The benefits are stronger for forecasts that look further into the future, which aligns with the long-term planning focus of enterprise risk management.

Why it matters

Management earnings forecasts play an important role in shaping investor expectations and market understanding of firm performance. This study suggests that enterprise risk management can support more informative and reliable communication with investors.

For managers and boards, the findings highlight that investments in firmwide risk oversight may benefit beyond compliance and control, extending to disclosure quality.

For investors and analysts, the results offer insight into why forecasts from some firms may be more reliable than those from others. More broadly, the study helps clarify how internal risk practices can influence transparency and decision-making.

Citation: Bol, J. C., De Aguiar, A. B., & Lill, J. B. (2025). Calibration in the performance evaluation process. Human Resource Management. 64(4): 1141-1159.

KU Business faculty co-author: Jeremy Lill

Research objective

This study examines how employee performance ratings change during calibration meetings, where managers jointly review and adjust initial ratings. The researchers focus on the interaction between direct supervisors and other members of the calibration committee. They aim to understand how differences in incentives shape what information supervisors share during these discussions.

The study also examines which supervisors are more likely to see their ratings adjusted and which are not. Overall, the objective is to understand how the calibration process operates in practice rather than how it is intended to work.

What the researchers find

The researchers find that direct supervisors often act strategically during calibration discussions. Instead of fully sharing what they know about employee performance, some supervisors limit the information they provide, especially when doing so helps them avoid scrutiny. As a result, calibration committees do not adjust all ratings equally.

Supervisors who face lower personal costs from resisting changes or questioning tend to have their ratings adjusted less often and end up with higher final ratings, even when employee performance is similar. These patterns suggest that the calibration process reflects internal dynamics and incentives, not just objective performance information.

Why it matters

Performance ratings influence pay, promotions, and career opportunities, making calibration an important part of human resource management. This study shows that calibration does not always correct bias or inconsistency as intended and can instead reflect differences in power and incentives among supervisors.

For human resource leaders, the findings highlight the need to carefully design and monitor calibration processes to encourage open information sharing. The results also help explain why employees may perceive rating outcomes as uneven or unfair. More broadly, the study provides insight into how organizational processes can shape evaluation outcomes in subtle but meaningful ways.

Citation: Hampton, C., Knutson, M., Masli, A., and Stefaniak, C. (2025). How Negative Accounting News Events, Voluntary ESG Assurance, and Assurance Provider Influence Consumer Purchasing Intentions. Accounting, Organizations and Society, 115, p.101599.

KU Business faculty co-author: Adi Masli

Research objective

This study examines whether negative accounting news affects how consumers respond to products that make environmental, social, and governance claims. The researchers focus on whether consumers use accounting events as signals about a company’s credibility when product quality cannot be directly observed.

They also examine whether voluntary assurance of ESG production practices changes consumer reactions to negative accounting news. In addition, the study considers whether the type of assurance provider influences consumer trust. Overall, the objective is to understand how accounting credibility and ESG assurance jointly shape purchasing intentions.

What the researchers find

The researchers find that negative accounting news reduces consumers’ willingness to purchase products that make ESG claims. More severe events, such as irregularities, lead to larger declines in purchasing intentions than less severe events, such as errors. Voluntary ESG product quality assurance helps offset these adverse effects but does not eliminate them.

When an error occurs, assurance is less effective when provided by the same firm that audits the financial statements than when provided by a government agency or a different accounting firm. When irregularities occur, assurance still helps, but consumers do not distinguish between assurance providers, suggesting that trust in assurance declines more broadly in severe cases.

Why it matters

Consumers increasingly rely on ESG claims when choosing products, yet these claims are often difficult to verify. This study shows that consumers use accounting news as a shortcut to judge whether ESG claims can be trusted, even when the news is not directly related to the product. The findings suggest that voluntary ESG assurance can protect consumer confidence after adverse events, but provider choice matters in some situations.

For managers and boards, the results highlight reputational risks from accounting problems that extend beyond investors to customers. For assurance providers, the study shows that credibility in one area of assurance can influence perceptions in others.

Citation: Klaus, J. Philipp, Adi Masli, and Pradeep Sapkota. (2025). Access to IT-Capable Employees and the Relevance of Financial Information." Journal of Accounting and Public Policy 51: 107284.

KU Business faculty co-author: Adi Masli

Research objective

This study examines whether access to employees with strong information technology (IT) skills affects the usefulness of financial reports to users. The researchers focus on the production process of financial information and how effectively firms manage large volumes of accounting data.

Because firms do not publicly disclose detailed information about employee skills, the study uses local labor-market characteristics to capture access to IT-capable employees. The study examines whether these employees are associated with simpler, timelier financial disclosures. Overall, the objective is to understand how workforce capabilities shape the relevance of financial reporting.

What the researchers find

The researchers find that firms with greater access to IT-capable employees produce financial reports that are easier to process and are released more quickly. These firms rely less on complex, customized digital reporting tags, which are often associated with errors and higher user effort. They also announce earnings sooner after the end of the reporting period.

The associations are stronger for smaller firms and for firms outside high-tech industries, where IT employees are more likely to support reporting systems than product development. The results remain consistent after accounting for other indicators of reporting quality.

Why it matters

Financial reports are only useful when they are timely and easy for users to understand. This study shows that employee skills, especially in information technology, play an important role in achieving these goals.

For managers and boards, the findings highlight the value of investing in IT-capable human capital to improve reporting efficiency and clarity.

For regulators and standard setters, the results suggest that workforce characteristics influence reporting outcomes in meaningful ways. More broadly, the study emphasizes that people, not just rules or systems, matter for producing relevant financial information.

Citation: Park, M. (2025). Analyst/investor days and firms' information environments. Accounting Horizons. 39 (1): 199–220.

KU Business faculty author: Min Park

Research objective

This study examines whether analyst and investor days improve a firm’s information environment for both analysts and investors. The researcher focuses on what firms reveal at these events and how that information relates to later earnings announcements. The study considers two possible roles of the event: providing information that would otherwise arrive later, and providing context that helps people interpret later earnings news.

The analysis also explores when these effects are stronger, such as when valuation is more uncertain. Overall, the objective is to understand how this disclosure channel changes what market participants know and how well they can forecast.

What the researcher finds

The researcher finds that analyst forecast accuracy improves around the time of analyst and investor days, across both short- and long-horizon forecasts. This pattern is consistent with firms sharing information that makes future performance easier to predict earlier than it otherwise would be.

The study also finds that after these events, information asymmetry declines around subsequent earnings announcements, and analysts respond to earnings news more quickly and with better forecast quality. These lingering effects suggest that the event provides context and operational detail that help investors and analysts interpret subsequent earnings releases. The complementary role appears stronger when investors and analysts face more valuation uncertainty or adverse changes in firm value.

Why it matters

Analyst and investor days are widely used in practice, but they are not as well understood as earnings announcements or conference calls. This study suggests that these events can improve the market's information, both immediately and in subsequent quarters when earnings are released.

For investor relations teams and executives, the findings clarify how these events can shape analyst forecasts and the trading environment around future disclosures.

For investors and analysts, the results help explain why some firms may have more predictable earnings and less information frictions after a major presentation event. More broadly, the study highlights that corporate disclosure is often a sequence of events, in which the earlier context can shape how later news is understood.

Citation: Park, M., Yoon, A., & Zach, T. (2025). Sell-side analysts’ assessment of ESG risk. Journal of Accounting & Economics. 79 (2–3): 101759.

KU Business faculty co-author: Min Park

Research objective

This study examines whether financial analysts incorporate environmental, social, and governance risks when evaluating firms. The researchers examine whether analysts anticipate downside ESG risks before adverse events occur. They assess whether analysts reflect this risk in their forecasts, earnings expectations, target prices, and stock recommendations.

The study also explores how analysts incorporate ESG risk into valuation models. Overall, the objective is to understand whether analysts meaningfully integrate ESG risk into their forward-looking assessments.

What the researchers find

The researchers find that analysts’ forecasts, recommendations, and target prices are systematically related to future adverse ESG events. When analysts revise their outputs downward, those firms are more likely to experience negative ESG incidents in the future, particularly financially material incidents.

The findings suggest that analysts adjust both expected future cash flows and the discount rates used in valuation. Evidence indicates that ESG risk affects not only earnings expectations but also how analysts price risk more broadly. Analysts appear particularly attentive to ESG risks with clear value and reputational implications.

Why it matters

Investors increasingly care about how ESG risks affect firm value, yet there is debate over whether analysts actually account for them. This study shows that analysts do incorporate ESG risk into their evaluations and do so in a forward-looking manner. The results suggest analysts view ESG risk as relevant for both performance expectations and risk assessment.

For investors, this provides reassurance that analyst research reflects emerging sources of downside risk. For firms, the findings highlight that ESG failures can influence market perceptions well before incidents become widely visible.

Citation: Park, M., & Zach, T. (in press). Analysts’ forecasting models and uncertainty about the past. Review of Accounting Studies.

KU Business faculty co-author: Min Park

Research objective

This study examines how analysts build their forecasting models and whether firms provide the information analysts seek. The researchers focus on the gap between the information that analysts include in their models and what firms actually disclose through required and voluntary channels. They introduce the idea of past uncertainty to describe situations in which analysts cannot confirm key historical information even after earnings are released.

The study evaluates how this unresolved uncertainty affects analysts and markets. Overall, the objective is to understand how disclosure limits shape the information environment after earnings announcements.

What the researchers find

The researchers find that analysts use highly detailed forecasting models that include many items that firms do not publicly disclose. A meaningful share of these items remains undisclosed even after earnings announcements, leaving analysts uncertain about past performance. This uncertainty about the past is associated with greater disagreement among analysts about future earnings.

It is also linked to weaker stock price reactions to earnings announcements and lower market liquidity after the announcement. The effects differ by information type: uncertainty about financial statement items affects announcement reactions, while uncertainty about key performance indicators affects trading and analyst behavior afterward.

Why it matters

Earnings announcements are often assumed to resolve uncertainty about past performance. This study shows that this assumption does not always hold. When firms do not disclose items that analysts view as important, uncertainty can persist, influencing forecast prices and trading.

For firms, the findings highlight how disclosure choices affect how well markets understand performance. For analysts and investors, the study explains why disagreement and information frictions can remain even after earnings are released. More broadly, the research deepens understanding of how information gaps shape market outcomes.

Citation: Call, A.C., Kara, M., Peterson, M., and Weisbrod, E.H., 2025. Social Media Discussion of Sell-Side Analyst Research: Evidence from Twitter. Review of Accounting Studies.

KU Business faculty co-author: Eric Weisbrod

KU Business doctoral candidate co-author: Matt Peterson

Research objective

This study examines whether proprietary sell-side analyst recommendations are discussed on social media. The authors seek to understand how frequently these analyst updates are discussed on Twitter, how quickly such discussion emerges, and what factors shape the amount of attention they receive.

The study also explores whether social media discussion is associated with how market prices adjust after analyst recommendation changes. A central focus is whether social media plays a distinct role compared to traditional information channels that typically serve institutional investors. Overall, the objective is to understand how social media may influence the flow of analyst information to different types of investors.

What the researchers find

The researchers find that discussion of analyst recommendation changes on Twitter is widespread and typically occurs shortly after the recommendations are released. This discussion is more extensive and quicker for recommendation upgrades and for analysts affiliated with larger brokerage firms. Periods with more recommendation-related tweets tend to coincide with greater incorporation of information into stock prices, particularly when tweets receive more user engagement or come from more visible accounts.

Retail trading activity is stronger when analyst recommendations receive more attention on Twitter, and retail trades are more closely aligned with the direction of the analyst change in these cases. In contrast, institutional trading activity does not appear to vary with the level of Twitter discussion.

Why it matters

This research helps clarify how social media may shape access to professional financial analysis, especially for individual investors who do not receive analyst reports directly. The findings suggest that social media can act as a bridge, bringing analyst information to a broader audience and influencing how quickly markets respond.

For investors, the study highlights conditions under which social media discussion may be more informative rather than distracting.

For regulators and market observers, the results offer insight into how new information channels interact with traditional financial intermediaries. More broadly, the study contributes to understanding when social media activity may support, rather than hinder, the market’s ability to process information.

Citation: Bakke, A. L., Cowle, E. N., Rowe, S. P., & Wilkins, M. S. (2025). What happens to partners who issue adverse internal control opinions? Journal of Accounting Research. 63 (2): 649–688

KU Business faculty co-author: Mike Wilkins

KU Business doctoral graduate co-author: Ashleigh Bakke

Research objective

This study examines how audit firms respond when engagement partners issue adverse internal control opinions. The researchers focus on whether partners face reassignment or changes in their client portfolios after issuing these opinions.

The study explores the tension audit firms face between meeting professional responsibilities and maintaining client relationships. It also examines whether consequences differ based on client importance and audit firm size. Overall, the objective is to understand how audit firms manage partner assignments in response to adverse internal control reporting.

What the researchers find

The researchers find that partners who issue adverse internal control opinions are more likely to be reassigned in subsequent periods. These partners also experience less favorable changes in their client portfolios, including lower fees and assignments to less prestigious clients.

The negative effects are stronger when the adverse opinion is issued to a more important client and when the partner works at a non-Big Four audit firm. Partners who inherit clients with continuing adverse opinions do not face similar consequences. The portfolio effects persist for multiple years, suggesting long-lasting impacts on partners’ careers.

Why it matters

Adverse internal control opinions provide valuable information to investors but can strain auditor-client relationships. This study shows that partners who make these complex judgments may face meaningful professional consequences. The findings highlight how audit firms balance investor protection and client service incentives.

For regulators, the results raise concerns that these incentives may discourage auditors from reporting internal control weaknesses. For the profession, the study underscores the importance of firm culture and support for partners who prioritize audit quality.

Citation: Hogan, C. E., Myers, L. A., & Wilkins, M. S. (2025). Writing introductions: A framework and commentary. Issues in Accounting Education. 40 (1): 1–10.

KU Business faculty co-author: Mike Wilkins

KU Business doctoral graduate co-author: Ashleigh Bakke

Research objective

This commentary aims to provide practical guidance on writing effective introductions for academic research papers. The authors focus on the introduction as the primary place where authors motivate their study and communicate its value to readers. Rather than discussing research methods or theory development, the commentary concentrates on structure, content, and clarity.

The goal is to help researchers present their work in a way that engages readers with different levels of interest. Overall, the objective is to improve how research ideas are communicated at the very start of a paper.

What the researchers find

The authors argue that many well-executed studies struggle in the review process because their introductions do not clearly explain why the research matters. They present a structured framework that outlines what each part of an introduction should accomplish and what content should be avoided. The commentary emphasizes that introductions should focus on motivation, contribution, and relevance rather than on technical detail.

The authors also discuss how introductions evolve as a paper develops and how revisions can sharpen the story being told. Throughout the commentary, they illustrate common pitfalls that weaken introductions and offer concrete suggestions for improvement.

Why it matters

Introductions strongly influence how editors, reviewers, and readers approach a paper. This commentary highlights that writing quality is a key determinant of publication success and scholarly impact.

For doctoral students and early-career researchers, the guidance provides a roadmap for crafting introductions that clearly convey importance and contribution. More experienced researchers may also benefit from the structured approach when revising or repositioning their work. Overall, the commentary underscores that strong research ideas require equally strong communication to be published and have influence.

Citation: Cade, Nicole L., Molly Mercer, and Amanda M. Winn. “When and How Does Irrelevant Peripheral Information Affect Investors’ Processing of Online Financial Information?” Behavioral Research in Accounting.

KU Business faculty co-author: Amanda Winn

Research objective

This study examines whether information that sits alongside online financial content but is not directly related to it influences how investors interpret and use that content. The authors focus on peripheral content commonly found on financial websites, such as advertisements, and ask when such content matters and when it does not.

The objective is to understand whether peripheral information affects investors through distraction or mood changes. The study also seeks to clarify the conditions under which investors can ignore irrelevant information versus when it subtly shapes their judgments. Overall, the research aims to shed light on how the design of online financial environments influences investor decision-making.

What the researchers find

The researchers find that not all peripheral information affects investors equally. Neutral advertisements placed next to financial information generally do not change how investors interpret that information or their willingness to invest.

Evidence suggests that investors can often visually avoid these neutral ads and focus on the financial content they care about. In contrast, advertisements that evoke negative emotions lead investors to view nearby financial information more pessimistically. When exposed to such ads, investors become less favorable in their assessments and less willing to invest, even though the financial information itself is unchanged.

Why it matters

Many investors now rely on online platforms where financial information appears alongside advertisements and other unrelated content. This study helps clarify when such design features are harmless and when they may influence investor judgment in unintended ways. The findings suggest that emotional cues in the online environment, even when unrelated to financial fundamentals, can shape how investors interpret information.

For firms, platform designers, and regulators, the results highlight the importance of considering how website content may affect investor perceptions. More broadly, the study provides insight into how subtle features of digital information environments can influence financial decision-making.

Citation: Horne, Eric; Serena Loftus; Sarah Shonka McCoy; and Amanda M. Winn. “How Sustainability Accounting Emphasis Can Help Improve Perceptions of Accounting Careers and Grow the Accounting Pipeline.” Current Issues in Auditing.

KU Business faculty co-author: Amanda Winn

Research objective

This study examines whether emphasizing sustainability-related accounting roles changes how Generation Z business students perceive accounting careers. The authors examine whether job descriptions that highlight sustainability assurance are perceived as more appealing than those for traditional financial assurance roles. 

They also seek to understand whether students’ underlying social preferences help explain differences in interest across career descriptions. The objective is to clarify how career framing interacts with student values when students consider accounting as a profession. More broadly, the study aims to inform efforts to address challenges in the accounting talent pipeline.

What the researchers find

The researchers find that Generation Z students report greater interest in accounting careers after viewing sustainability assurance job descriptions than after viewing traditional financial assurance job descriptions. This increased interest is not uniform across students. It is primarily driven by students with stronger prosocial preferences, meaning those who place greater importance on contributing to others' well-being.

These students are more attracted to sustainability-focused accounting roles because they see a clearer alignment between the work and their personal values. Students who are more self-focused do not show the same increase in interest, suggesting that values play a central role in shaping career perceptions.

Why it matters

The accounting profession faces ongoing challenges in attracting new entrants, particularly among younger generations. This study highlights how accounting careers are described can meaningfully influence student interest, especially for those motivated by social impact.

For firms, educators, and professional organizations, the findings suggest that highlighting sustainability-related aspects of accounting work may resonate with a large segment of Generation Z students. The results also underscore that recruitment strategies may be more effective when they acknowledge differences in student values rather than assuming a one-size-fits-all approach. The study shows how aligning professional roles with societal impact can help strengthen the future accounting workforce.