Lorien Stice-Lawrence

Transcription

1 Lorien Stice-Lawrence Mailing Address: Leventhal School of Accounting Marshall School of Business 3660 Trousdale Parkway Los Angeles, California General Contact Information : sticelaw@marshall.usc.edu phone : (801) website : ACADEMIC EMPLOYMENT University of Southern California (June 2017 Present) Marshall School of Business Leventhal School of Accounting Assistant Professor of Accounting EDUCATION Ph.D., Accounting, University of North Carolina at Chapel Hill, Kenan-Flagler Business School, 2017 B.S., Economics, Brigham Young University (summa cum laude), 2011 Minors: Business Administration, French, Arabic BYU Accounting Ph.D. prep track ACADEMIC RESEARCH Research Interests: Textual analysis, Regulation, International accounting, Disclosure, Management accounting Publications: Textual Analysis and International Financial Reporting: Large Sample Evidence (with Mark Lang). Journal of Accounting and Economics 60 (2015), Presented at the 2014 Journal of Accounting and Economics conference. Do Managers Really Guide Through the Fog? On the Challenges in Assessing the Causes of Voluntary Disclosure (discussion with Travis Dyer and Mark Lang). Journal of Accounting and Economics 62 (2016), The Evolution of 10-K Textual Disclosure: Evidence from Latent Dirichlet Allocation (with Travis Dyer and Mark Lang). Conditionally accepted at the Journal of Accounting and Economics. Presented at the 2016 Journal of Accounting and Economics conference. Working Papers: Too Small to Regulate: International Evidence on Regulatory Monitoring Job Market Paper. 1

2 Updating Accounting Systems: Long-Run Evidence from the Health Care Sector (with Eva Labro). Working Paper. Revise and resubmit at Management Science. The Power of Numbers: Base-Ten Threshold Effects in Reported Revenue (with Derrald Stice, Earl K. Stice, and Han Stice). Working Paper. The Use of Revenue Disclosures to Inform and Influence the Market (with Stephen Stubben). Working Paper. PRESENTATIONS AND PROFESSIONAL SERVICE Conference Presentations AAA Annual Meeting (author, discussant) 2016, 2015 Brigham Young University Accounting Research Symposium 2016, 2015, 2012 Conference on Empirical Legal Studies (discussant) 2016 Conference on Financial Economics and Accounting (discussant) 2013 Journal of Accounting and Economics Conference 2014 Southern Economic Association Presidential Panel on "Textual 2015 Analysis and Financial Economics" Ad-hoc Reviewer for: AAA Annual Meeting, Conference on Financial Economics and Accounting, Financial Accounting and Reporting Section Mid-Year Meeting, Production and Operations Management TEACHING Teaching Interests Financial Accounting, Management Accounting Teaching Experience University of North Carolina at Chapel Hill o Undergraduate Financial Accounting and Analysis, Instructor, 2015 o MBA Financial Accounting, Teaching Assistant to Mark Lang, o MBA Managerial Accounting, Teaching Assistant to Eva Labro, Brigham Young University o Ph.D. Prep Program SAS Class, Teaching Assistant to Ted Christensen, 2011 MEDIA MENTIONS AND OTHER WRITING Media Mentions Teach, Edward. Rethinking Disclosure. CFO Magazine. 7 April CFO.com. 2

3 Lahart, Justin. Zeroing In on the Allure of a $1 Billion Sales Target. The Wall Street Journal. 20 April WSJ.com. Other Writing Dyer, Travis, Mark Lang, and Lorien Stice-Lawrence. The Ever-Expanding 10-K: Why Are 10- Ks Getting So Much Longer (and Does It Matter)? Columbia Law School Blue Sky Blog. 5 May clsbluesky.law.columbia.edu. AWARDS, HONORS, AND EXPERIENCE Academic Awards and Honors UNC o Kenan-Flagler Business School Outstanding Student Award o AAA/Grant Thornton Doctoral Dissertation Award o Graduate School Dissertation Completion Fellowship o Leland J. Bellòt Summer Research Fellowship o Deloitte Doctoral Consortium Fellow o AAA FARS Doctoral Consortium Fellow BYU o B.S. Summa Cum Laude o National Merit Scholar, 4-year full-tuition scholarship o BYU Office of Research and Creative Activities Undergraduate Research Grant o Member of Phi Kappa Phi o Dean s List Other Experience BYU Marriott School Dean s Office & School of Accountancy, o Collection and analysis of business school and campus-wide administrative data BYU Foreign Language Housing, French & German, BYU/University of Jordan, Arabic Language Program, 2008 Morinda, Bilingual (French/English) Customer Service and Sales Support, 2007 IFALPES, French Language Institute,

4 PAPER ABSTRACTS Publications Textual Analysis and International Financial Reporting: Large Sample Evidence (with Mark Lang) We examine annual report text for over 15,000 non-us companies from 42 countries over the period , focusing on the length of disclosure, presence of boilerplate, comparability with US and non-us firms, and complexity. We find that textual attributes are predictably associated with regulation and incentives for more transparent disclosure and are correlated with economic outcomes such as liquidity, institutional ownership, and analyst following. Using mandatory IFRS adoption as an exogenous shock, annual report disclosure improved in the sense that quantity of disclosure increased, boilerplate was reduced, and comparability increased relative to both US and non-us firms. Firms with the greatest improvements in financial reporting experienced the greatest improvements in economic outcomes around IFRS adoption. Do Managers Really Guide Through the Fog? On the Challenges in Assessing the Causes of Voluntary Disclosure (with Travis Dyer and Mark Lang) Guay, Samuels, and Taylor (2016) document that firms with longer and more complex 10-Ks provide relatively more voluntary disclosure, which they interpret as evidence that managers use voluntary disclosure to mitigate negative effects of complex mandatory disclosure. We review the results of Guay et al. and focus on two main challenges to inferring causality: (1) the coincidence of upward over-time trends in annual report length, complexity, and voluntary disclosure, and (2) the potential for omitted correlated variables, such as changes in firm economics, to drive changes in 10-K textual characteristics and voluntary disclosure. While the results in Guay et al. are extensive and robust, we argue that economic drivers of, and trends in, voluntary disclosure present important avenues for future research. The Evolution of 10-K Textual Disclosure: Evidence from Latent Dirichlet Allocation (with Travis Dyer and Mark Lang) While characteristics of quantitative accounting data have received substantial attention in the academic literature, much less is known about the accompanying text. We document marked trends in 10-K disclosure over the period , with increases in length, boilerplate, stickiness, and redundancy and decreases in specificity, readability, and the relative amount of hard information. We use Latent Dirichlet Allocation (LDA) to examine specific topics and find that new FASB and SEC requirements explain most of the increase in length and that 3 of the 150 topics fair value, internal controls, and risk factor disclosures account for virtually all of the increase. These three disclosures also play a major role in explaining the trends in the remaining textual characteristics. Our results are potentially relevant to regulators in understanding trends in, and topical sources of textual characteristics amid concerns about increasingly onerous accounting disclosures. 4

5 Working Papers Too Small to Regulate: International Evidence on Regulatory Monitoring (Job Market Paper) I examine a phenomenon called Too Small to Regulate (TSTR) by which industries composed predominantly of small firms are more likely to violate regulatory requirements because their industry composition makes them especially difficult to effectively monitor. I identify TSTR industries throughout the world and find evidence consistent with firms in these industries receiving less regulatory monitoring using measures derived from firms financial disclosures and downloads of EDGAR filings by SEC and IRS employees. Consistent with inadequate oversight, firms in TSTR industries are penalized by the market with lower liquidity and are more likely to engage in non-compliant activities such as tax avoidance. The consequences of TSTR appear to be less severe when firms are monitored by third parties such as financial analysts, institutional investors, the news media, or Big N auditors. The TSTR effect varies predictably with exogenous changes in regulatory monitoring, enforcement, and resource constraints and is amplified in industries where regulation plays a greater role. Updating Accounting Systems: Long-Run Evidence from the Health Care Sector (with Eva Labro) This paper provides evidence on the determinants of and economic outcomes associated with updates of accounting systems over a 24-year time-span in a large sample of U.S. hospitals. We document that a set of previously unidentified determinants drives the updating decision including waves of vendor-pushed updates that are taking place across hospitals, and regulatory impetuses at the state and federal level, such as the implementation of price transparency websites and fair pricing measures and the enactment of Sarbanes-Oxley Section 404, that increase hospitals demand for high quality accounting information. Using vendor-pushed updates as an instrumental variable, we document that updating of most types of accounting systems results in immediate and significant reductions in operating expenses. Our findings have implications for settings outside of the health care sector, but they are also important in their own right given the current public policy crisis concerning the rising costs of medical care. The Power of Numbers: Base-Ten Threshold Effects in Reported Revenue (with Derrald Stice, Earl K. Stice, and Han Stice) We provide evidence that managers have a revealed preference for reporting total revenue numbers just above base-ten thresholds (i.e., round numbers) of the form N 10 K. Examples are $10 million ( ) and $4 billion ( ). Our finding is consistent with a literature in psychology demonstrating that humans are susceptible to a cognitive bias associated with base-ten reference points. However, we also document several rational explanations for this revenue management behavior on the part of managers. First, analyst revenue forecasts also exhibit this regularity, especially in early forecasts when greater uncertainty can potentially induce analysts to rely to a greater extent on heuristics, suggesting that managers may be managing reported revenue numbers to meet externally-determined base-ten-influenced benchmarks. In addition, the 5

6 effect that we document is stronger for firms that face greater pressure to report high revenue growth, while firms that exceed base-ten revenue thresholds for the first time benefit from increased press coverage. Finally, we show that the revenue growth needed to stretch for a base-ten threshold is not sustainable; firms that just exceed base-ten thresholds have lower subsequent revenue growth. Given that managers engage in extra, and, on average, unsustainable efforts to increase revenues to reach base-ten thresholds, our results suggest that revenue manipulation is even more pervasive than previously documented and that lenders, investors, auditors, and regulators should apply an extra degree of skepticism when a reported revenue number just exceeds a base-ten threshold. The Use of Revenue Disclosures to Inform and Influence the Market (with Stephen Stubben) This study addresses whether firms use revenue disclosures to inform and/or influence the market. We find that when firms emphasize and provide a more thorough discussion of revenues in their 10-K filings, (1) analysts are more likely to issues revenue forecasts, (2) the revenue forecasts tend to be more accurate, and (3) investors place a greater weight on revenues in valuation. These findings are consistent with revenue disclosures providing valuable information to the market about revenues. However, to address the possibility that revenue disclosures influence investors to overweight revenues, we examine the persistence of revenues and subsequent abnormal stock returns. We find that when revenue disclosure is more extensive, the persistence of revenues is not significantly higher but future abnormal returns are lower, consistent with investors overweighting revenues in valuation. 6