Daniel Taylor

Professor Daniel Taylor’s research focuses on the economic consequences of financial reporting, and how managerial incentives affect financial reporting. His research appears in leading academic journals including The Accounting Review, Contemporary Accounting Research, Journal of Accounting Research, Journal of Accounting and Economics, Review of Accounting Studies, Journal of Financial Economics, and Management Science. His research has been featured in the popular media, including such outlets as the Wall Street Journal and the New York Times, and has been cited in final rulings by the U.S. Securities and Exchange Commission. He regularly attends and presents at professional meetings and was previously awarded a Deloitte Foundation Fellowship.

Professor Taylor teaches Introduction to Financial Accounting to undergraduates and Empirical Design in Accounting Research to PhD students. He received a PhD in Business from Stanford University, a MA in Economics from Duke University, and a BS in Economics from the University of Delaware.

Mary Barth, Wayne Landsman, Daniel Taylor (2017), The JOBS Act and Information Uncertainty, The Accounting Review.

Wayne Guay, Delphine Samuels, Daniel Taylor (2017), Guiding Through the Fog: Financial Statement Complexity and Voluntary Disclosure, Journal of Accounting and Economics, 62 (2), pp. 234269.

Alan Jagolinzer, David Larcker, Gaizka Ormazabal, Daniel Taylor (Working), Political Connections and the Informativeness of Insider Trades.

Brian Bushee, Ian Gow, Daniel Taylor (Working), Linguistic Complexity in Firm Disclosures: Obfuscation or Information?.

Qi Chen, Joseph Gerakos, Vincent Glode, Daniel Taylor (2016), Thoughts on the Divide between Theoretical and Empirical Research in Accounting, Journal of Financial Reporting.

Jeremy Bertomeu, Anne Beyer, Daniel Taylor (2016), From Casual to Causal Inference in Accounting Research: The Need for Theoretical Foundations, Foundations and Trends in Accounting, 10 (2), pp. 262313.

Christopher Armstrong, George Foster, Daniel Taylor (2016), Abnormal Accruals in Newly Public Companies: Opportunistic Misreporting or Economic Activity?, Management Science, 62 (5), pp. 13161338.

Abstract: Newly public companies tend to exhibit abnormally high accruals in the year of their initial public offering (IPO). Although the prevailing view in the literature is that these accruals are caused by opportunistic misreporting, we show that these accruals do not appear to benefit managers and instead result from the normal economic activity of newly public companies. In particular, and in contrast to the notion that managers benefit from inflating accruals through an inflated issue price, inflated postIPO equity values, and increased insider trading profits, we find no evidence of a relation between abnormal accruals and these outcomes. Instead, consistent with these accruals resulting from normal economic activity, we find that these accruals are attributable to the investment of IPO proceeds in working capital and that controlling for the amount of IPO proceeds invested in working capital produces a more powerful accrualbased measure of misreporting.

Christopher Armstrong, Daniel Taylor, Robert E. Verrecchia (2016), Asymmetric Reporting, Journal of Financial Reporting, 1 (1), pp. 1532.

Abstract: We extend the CAPM to a setting where a firm reports earnings prior to selling shares to investors. We show that an entrepreneur, as representative of a firm's initial owners, will choose to report earnings that asymmetrically reflect future cash flow. In modeling the entrepreneur's reporting choice, we deliberately abstract away from the stewardship role of accounting. In our model, the sole purpose of reported earnings is to facilitate valuation by the firm's equity investors. Nevertheless, we show that a firm's earnings will reflect future cash flow to a greater (lesser) extent in bad states (good states) when that cash flow is anticipated to be low (high). Importantly, we also show that the asymmetry in reporting generates asymmetry in the firm's systematic risk. When a firm's earnings reflect future cash flow to a greater extent in bad states, the firm's covariance with the market portfolio will be lower in bad states.

Wayne Guay, Daniel Taylor, Liang (Jason) Xiao (Working), Adapt or Perish: Evidence of CEO Adaptability to Industry Shocks.

Daniel Taylor and Robert E. Verrecchia (2015), Delegated Trade and the Pricing of Public and Private Information, Journal of Accounting and Economics, 60 (23), pp. 832.

Abstract: We extend a standard, rational expectation model of trade to incorporate the possibility of individual investors delegating their trades to an informed financial intermediary. In the presence of delegated trade, we show that a firm's risk premium is a function of both the firm's exposure to a common risk factor and idiosyncratic characteristics of the firm's information environment. We show that even in a large economy, priced risks can manifest in the form of both idiosyncratic firm characteristics and common risk factors; as a consequence, factorbased asset pricing tests cannot rule out that a particular risk is priced.

Introduction to Financial Accounting (ACCT101)

Past Courses

ACCT101 PRINCIPLES OF ACCOUNTING

This course is an introduction to the basic concepts and standards underlying financial accounting systems. Several important concepts will be studied in detail, including: revenue recognition, inventory, longlived assets, present value, and long term liabilities. The course emphasizes the construction of the basic financial accounting statements the income statement, balance sheet, and cash flow statement as well as their interpretation.

ACCT930 EMPIR DESIGN IN ACCT RES

Course on empirical methods and their application to accounting research topics.

• Dean’s Research Grant, 2011
• Who’s Who in Business Education, 2011
• A. Michael Spence PhD Fellowship, 2010
• Deloitte Foundation Doctoral Fellowship, 2008
• Robert H. Litzenberger PhD Fellowship, 2008
• Robert H. Litzenberger PhD Fellowship, 2007
• William H. Beaver PhD Fellowship, 2007

• Stanford University Fellowship, 2005

• Executive Compensation Offers Warning Signs of Financial Misreporting, Wall Street Journal 05/06/2013

• The Heated Debate Over Proxy Access, New York Times 11/02/2010

• Facilitating Shareholder Director Nominations, SEC Release No. 339136 08/25/2010

• The DoddFrank Financial Fiasco, Wall Street Journal 07/01/2010

• Nardelli’s Big Payday was set on Day One, Altanta JournalConstitution 01/30/2007

Knowledge @ Wharton

• How Big Data Connects Bankers, Politics and Insider Trading, Knowledge @ Wharton 09/26/2016
• Is It Possible to Defog America’s Corporate Financial Reports?, Knowledge @ Wharton 04/19/2016
• The Lemons Problem: How Less Disclosure Affects Risk Perceptions, Knowledge @ Wharton 06/23/2015