Published or Accepted Articles
Female CFOs and Relationship Lending: Implications from Gender Socialization Theory, with Jie Hao, The Financial Review, accepted - 2025 (ABDC: A; ABS: 3; SJR Q1)
This study examines the impact of CFO gender on the use of relationship lending. Building on gender socialization theory, we hypothesize that female CFOs, driven by communal values and a focus on stakeholder balance, are more inclined to utilize relationship lending to reduce conflicts between creditors and investors. We find that firms with female CFOs exhibit stronger lending relationships, including higher relationship loan frequency and amounts. These findings are robust to various model specifications, including difference-in-differences, and instrumental variable approaches. Additionally, female CFOs are more likely to maintain borrowing relationships with lenders even after transitioning to different firms, suggesting female CFOs maintain personal relations with lenders. Loan purpose analysis shows that female CFOs avoid using relationship loans for risky activities such as mergers and acquisitions, takeovers, or leveraged buyouts. Collectively, these findings provide new evidence of the role of gender in shaping corporate financial practices and decision-making.
Do managers withhold information in high-uncertainty periods? Evidence from COVID-19 disclosures in 10-Q filings, with Jie Hao, Accounting and Business Research, 2025 (ABDC: A; ABS: 3; SJR Q2)
This study examines how pre-disclosure market uncertainty influences managers’ COVID-19 disclosure decisions. We find that high pre-disclosure market uncertainty reduces both quantity and negative tone of COVID-19 disclosure in 10-Q filings. However, managers respond to this uncertainty by increasing Covid-19 disclosure in conference calls. Our findings show that litigation risk drives the strategic shift between formal and informal communication channels. These insights highlight the nuanced strategies managers employ to navigate market uncertainty during crises.
Impression Management Strategy — The Relationship between Accounting Narrative Thematic Bias and Financial Graph Distortion, with Jie Hao, Jeff Boone, and Cheryl Linthicum, The British Accounting Review, 2024 (ABDC: A*; ABS: 3; SJR Q1)
Prior literature has examined 10-K narrative thematic bias and financial graph distortion as two independent outcomes that might arise from managements’ efforts at impression management. Largely unexplored is an analysis of narrative thematic bias and financial graph distortion as joint and interrelated outcomes that would arise if management coordinates both in the same 10-K report as part of an impression management strategy. We fill this void in the literature by using a simultaneous equation system to examine the joint relationship between narrative thematic bias and graph distortion in the 10-K filings of S&P 500 firms from 2014 to 2018. We draw upon Paivio’s (1986) dual coding theory to predict a positive association between narrative thematic bias and financial graph distortion based on the insight that graph distortion helps reinforce the effects of thematic bias, and vice versa. Consistently, we find a simultaneous and positive relationship between thematic bias and graph distortion. Further, we find that this complementary relationship is more pronounced in firms with weak corporate governance and weak external monitoring. Our findings suggest that management may exploit the reinforcing effects of thematic bias and graph distortion to leave financial statement users with a more favorable impression of firm performance.
Stuck in Traffic: Do Auditors Price Traffic Congestion? with Jie Hao, The British Accounting Review, 2023 (ABDC: A*; ABS 3, SJR Q1)
Although the detrimental impact of traffic congestion on firm operations and human health is widely acknowledged, it is unclear whether auditors perceive traffic congestion as a risk factor. We posit and find that the traffic congestion levels in audit clients’ domicile cities are positively associated with audit fees. Using a structured equation model, we identify and illustrate several channels that explain the effect of traffic congestion on audit fees. We also find evidence of audit fee increases after events that expose clients to higher levels of traffic congestion. Finally, the effect of traffic congestion on audit fees is more pronounced when clients have higher operation concentration near their headquarters or when auditors’ offices are located near clients’ headquarters. Collectively, our findings suggest that auditors view traffic congestion as a risk factor that is priced into audit fees.
Perceptions of corporate corruption culture and debt contracting with Jie Hao, Daniel Sanchez and Juan Manuel Sanchez, Journal of Corporate Finance, 2021 (ABDC: A*; ABS 4, SJR Q1)
We find that the perception of corporate corruption culture in the top executive team affects both pricing and non-pricing loan provisions. Firms with higher levels of perceived corruption culture face higher interest spreads and are more likely to receive a collateral requirement. The bank syndicate is larger and more performance-based covenants and managerial negative restrictions (e.g., limits on capital expenditures or dividend restrictions) are put in place in loans made to firms with higher levels of perceived executive-based corruption. We further find that cultural proximity between lenders and borrowers mitigates the perceived corruption effects significantly, leading to contracts that are less costly and less restrictive. Additional tests suggest that lenders display an in-group bias in favor of culturally proximate borrowers.
The Gender Effects of Audit Partners on Audit Outcomes: Evidence of Rule 3211 Adoption with Jie Hao and Meng Guo, Journal of Business Ethics, 2021 (ABDC A; ABS 3; FT 50 journals, SJR Q1)
This paper investigates whether the impact of PCAOB Rule 3211 on the quality and cost of audit services differs between female and male audit partners. We find that the improvement of audit quality is more pronounced for female audit partners than male partners after Rule 3211 adoption. Female audit partners are also associated with higher increases in fees and report lags than male counterparts after the adoption of Rule 3211. Further, we find that the presence of female CFOs (or female audit committee members) attenuates the audit fees and report lag increases in the post-adoption periods. Overall, our findings confirm the importance of the gender effect on audit outcomes, which needs further consideration by standard setters. Our study also provides empirical evidence of the benefits of gender equality in the workplace.
The ASC 606 Standard, Revenue Informativeness, and Analysts Forecast Quality with Jie Hao, Accounting and Finance, 2022 (ABDC: A; ABS 2, SJR Q1)
We examine the adoption effect of ASC 606 on revenue informativeness, analyst forecast dispersion, and forecast errors. We find that the adoption of ASC 606 is associated with increases in revenue informativeness but decreases in analyst forecast accuracy and consensus. Such adoption effects are mainly temporary and focused in firms that are more affected by the new standard. Last, we find that firms using the full retrospective adoption method are associated with higher revenue informativeness and lower analyst forecast error than firms using the modified retrospective method.
Client Corruption Culture and Audit Quality: The Conditioning Effect of the Competitive Position of the Incumbent Auditor with Simon Fung and K.K. Raman, Review of Quantitative Finance and Accounting, 2022 (ABDC: B; ABS 3, SJR Q2)
Prior research suggests that corporate corruption culture captures an audit client’s general attitude towards opportunistic behavior. In this paper, we examine whether the relation between client corruption culture and audit quality is attenuated or exacerbated by the competitive position of the incumbent auditor in the local audit market. We find that the incumbent auditor’s weak competitive position in the local audit market exacerbates the negative effects of client corruption culture on audit quality. By the same token, we show that the incumbent auditor’s strong competitive position in the local audit market attenuates the adverse audit quality effects associated with client corruption culture. Our findings speak to the interplay between client corruption culture and the competitive position of the incumbent auditor in US local audit markets and is of potential interest to regulators concerned about the impact of client corruption culture and audit market competition on audit quality.
COVID-19 Disclosures and Market Uncertainty: Evidence from 10-Q Filings with Jie Hao, Australian Accounting Review, 2022 (ABDC: B; ABS 2, SJR Q2)
We examine whether the quarterly filing COVID-19 disclosures reduce uncertainty for investors and analysts. We find a negative relationship between COVID-19 disclosure and return volatility, suggesting COVID-19 disclosure reduces investor uncertainty. This reduction effect concentrates mainly during the short window following 10-Q releases and phases out over time. We then detect that the industry-wide COVID-19 disclosure dispersion is positively associated with return volatility, suggesting high variation of industry-wide COVID-19 disclosures reduces information comparability across firms, resulting in increased investor uncertainty. Moreover, we find that COVID-19 disclosures are positively associated with analysts’ downward earnings forecast revisions and negatively associated with analyst forecast dispersion after 10-Q releases, suggesting the disclosures reduce information risk even for sophisticated market participants. Further analyses show that COVID-19 disclosures are negatively associated with future financial and operational performances (i.e., sales, operating cash flow, operating income, and ROA). Lastly, we find that the low readability of COVID-19 disclosure attenuates the negative relation between COVID-19 disclosure and market volatility. Collectively, our findings suggest that 10-Q COVID-19 disclosures contain value-relevant information that temporarily assists market participants in evaluating the changes in firms’ values in the time of a crisis.
Recent Presentations
Susquehanna University Research Workshop (March 2025)
The AAA Annual Meeting (August 2024)
The AAA Audit Midyear Meeting (January 2024)
The British Accounting Review conference at Harvard University (December 2023)
Susquehanna University Research Workshop (November 2022)
Susquehanna University Research Workshop (October 2021)
Wright State University (October 2019)
Washburn University (October 2019)
AAA Annual Meeting - San Francisco (2019)
Deloitte/ AAA Doctoral Consortium - Dallas (2019)
AAA Southwest Region Meeting (2019 - coauthor presented)
AAA Audit Mid-year - Nashville (2019 - coauthor presented)
AAA Annual Meeting - Washington DC (2018)