Prior Research

Abstract: Audit clients in various industries are investing significant funds in research and development for artificial intelligence (AI), machine learning, and related technological innovations relevant to their firm operations. In this study, we examine the impact of client AI applications on the quality of financial statement audits. Using 25,408 firm-year observations from a sample of Chinese firms, we document that firms developing and implementing AI technology exhibit, on average, a higher audit quality on their annual audits. This effect is transmitted by increased internal control quality and increased corporate transparency. Additional analysis suggests that this effect is moderated by the auditor’s IT background, auditor-client distance, the client’s corporate governance quality, and whether the firm belongs to a high-technology industry. Furthermore, we find that applications of AI also decrease audit lags and audit fees for the client. Given that the implementation of AI improves audit quality and reduces fees, we suggest that a firm’s AI application improves operational efficiency and provides additional unforeseen benefits of improved audit quality for the firm.

Abstract: This paper aims to examine the effect of carbon emissions on audit fees. The authors hypothesize that firms in cities with higher carbon emission levels have lower reporting transparency, higher return volatility or are subject to higher reputation risk, causing them to be charged higher audit fees for auditing services. The authors use panel data of 25,960 firm-year observations from a sample of Chinese firms. The carbon emission data for each Chinese city are obtained from the China Emission Accounts and Datasets for Emerging Economies. This paper adopts a multiple regression model to study the impact of carbon emissions on audit fees. The authors find that firms located in cities with higher carbon emission levels and firms with more carbon emissions are charged, on average, a higher audit fee. This audit fee effect of carbon risk is transmitted by lessened information transparency and elevated financial risk within these firms. This paper shows that auditors consider carbon risk in their audit fee decisions and other factors that could influence audit risk and effort. This study draws a connection between carbon emissions and audit fees. It is especially relevant due to the increasing importance of environmental factors in the audit risk assessment. In addition, the findings suggest that a firm implementing a proactive environmental strategy benefits the economy and decreases the costs to the firm for services such as auditing.

Abstract: We examine the impact of air pollution on a firm's accounting policy conservatism. We hypothesize that, in response to risks associated with increased air pollution, firms apply more conservative accounting practices and utilize more conservative estimates in their reporting. Using a sample of Chinese firms, accounting conservatism measures, and a satellite-based air pollution metric, we confirm the validity of our hypothesis. Additional analysis suggests that the impact of air pollution on accounting policy conservatism is more salient for firms in high-pollution industries, firms under severe financial constraint, firms with higher environmental risk, and firms that receive high media coverage. Further, we document that air pollution does not significantly affect a firm's return on assets, year-on-year sales growth, or Tobin's Q measure. Hence, it is management's risk perception, not objective performance concern, that is driving accounting conservatism. Finally, specifically investigating accounting conservatism, we discover that, for firms with higher pollution levels, selling general and administrative expenses, liabilities provision, accrued expenses, and asset impairment loss are significantly higher.

Abstract: Intelligent Process Automation (IPA) brings about revolutionary changes to business operations and the entire internal audit life cycle. As the rapid development of IPA sets new standards and shapes an era of productivity and innovation, internal auditors who successfully employ IPA will surpass competitors who do not.

Abstract: This study explores the effects of cognitive technology (CT) on corporate risk sensing and fraud detection, seeking to understand how CT cautions emerging risks and alleviates a host of causes of fraud. We start the article introducing CT and how it differs from artificial intelligence. From there, we discuss how cognitive risk sensing uses predictive analytics and artificial intelligence to identify emerging risks. We also find how each element of the traditional corporate fraud triangle can be mitigated by CT systems to empower fraud detection. Then, we focus on two technological elements, expert systems and procedural abstraction, in order to point out various benefits and risks of CT systems. Finally, we provide recommendations that internal auditors can use to implement CT into their auditing practices.

Abstract: We examine the impact of second-generation involvement (succession) in family firms on firms’ green innovation. Our findings suggest that second-generation succession adversely affects green innovation. We also report that a family firm’s changes in loans, government subsidies, and research and development expense mediate the impact of second-generation involvement on green innovation. Additional analyses show that when a successor has shorter tenure length, attains only lesser education, or possesses a weaker R&D background, the adverse impact of succession on green innovation is magnified. Also, when a firm has low institutional ownership or state shareholding, the adverse impact is more salient. Overall, we find that succession in family firms is one specific factor, among many, that adversely impacts a firm’s green innovation. Finally, we discuss policy implications for these findings.

Abstract: Using a paperless patient registration project, this teaching case demonstrates an application of the six-step approach in developing a business case for an IT investment. More specifically, this case familiarizes students with the process of developing a solid business case by defining business drivers and investment objectives, identifying and structuring benefits and costs, and estimating return on investment (ROI) based on these values. Students learn, step-by-step, the process from raw data collected from organizational records and internet research to complete managerial decisions based on detailed analysis.

Abstract: This study examines the relationship between financial literacy and student attitudes toward graduate school. In the framework of human capital theory, we argue that graduate school is an investment in an individual's human capital that enhances future earnings capability. We hypothesize that during a weakened job market in conjunction with the COVID-19 pandemic that students who are more financially literate will demonstrate a more positive attitude toward a graduate degree as an appealing and rewarding capital investment than students with less financial literacy. Our robust results are consistent with our hypothesis. We argue that these findings have significant economic implications.

Abstract: In this paper, we give an efficient way to calculate the values of the Mittag-Leffler (h-ML) function defined in discrete time hN, where h>0 is a real number. We construct a matrix equation that represents an iteration scheme obtained from a fractional h-difference equation with an initial condition. Fractional h-discrete operators are defined according to the Nabla operator and the Riemann-Liouville definition. Some figures and examples are given to illustrate this new calculation technique for the h-ML function in discrete time. The h-ML function with a square matrix variable in a square matrix form is also given after proving the Putzer algorithm.

Abstract: In this paper, we establish a connection between the well-known Grünwald-Letnikov fractional operators which were defined in the mid-1800s and the recently defined fractional h-discrete operators. We prove that the Mittag-Leffler function of the Riemann-Liouville fractional calculus in continuous time is the limit of the Mittag-Leffler type function in fractional h-discrete calculus in discrete time when h approaches zero. In our study, we only focus on the backward difference operators which are also known as discrete nabla operators.

Presentations: 2021 AMS/MAA National Conference*

Abstract: Research has shown negative effects of chronic self-doubt on psychological and performance outcomes. Two experiments were conducted to examine (a) the malleability of the mind-set about self-doubt; and (b) whether shifting to a more positive mind-set reduces the negative effects of self-doubt. Participants in Experiment 1 were randomly assigned to one of two mind-set induction conditions (positive versus negative). A control group was added in Experiment 2, in which we also enhanced the strength and symmetry of the positive and negative mind-set inductions. The results from both experiments showed a significant change in self-doubt mind-set in the hypothesized direction as a result of the mind-set induction. Interestingly, Experiment 2 revealed that priming either positive or negative mind-set diminished the negative self-doubt effects on task engagement, relative to the control group. The findings for the negative mind-set group were counter to the hypothesis but replicated what was observed in Experiment 1.

Presentations: 2021 SPSP Self & Identity National Preconference*, 2022 APS Annual Convention*

Presentations: 2018 KAS Annual Meeting* (First Place in Microbiology)