Kenneth Merkley

Ken Merkley is an Associate Professor (with tenure) in the Accounting Department at the Kelley School of Business at Indiana University. His research focuses on the role of information in capital markets. He specializes in examining corporate financial communication decisions and the influence of external capital market participants, such as investors, financial analysts, auditors, and lawyers. He serves on the editorial board of The Accounting Review and referees for top journals in accounting and finance. Prior to joining Kelley, he served on the faculty of Cornell University, where he was a distinguished teacher and researcher at the Johnson Graduate School of Business. He received the Barry and Ann Riding Fellowship and the Half Century Faculty Research award. In 2014, he was named by Poets & Quants as one of the Top 40 Business School Professors Under 40. He received his PhD from the University of Michigan and received his Master of Accountancy (MAcc) from Brigham Young University.

Education

• Ph.D. University of Michigan (Business Administration – Accounting) 2011
• MAcc Brigham Young University (Accounting, High Distinction) 2006
• B.S. Brigham Young University (Accounting, Summa Cum Laude) 2006

RESEARCH INTERESTS

Financial reporting, corporate disclosure, information intermediaries (sell-side analysts, auditors, and lawyers), and the role of information in capital markets.

PEER REVIEWED PUBLICATIONS

• “The Effect of Annual Report Readability on Analyst Following and the Properties of Their Earnings Forecasts” 2011, The Accounting Review, 86(3): 1087-1115.
• “Do Managers use Earnings Guidance to Influence Street Earnings Exclusion?” 2011, Review of Accounting Studies, 16(3): 501-527.
• “Detailed Management Earnings Forecasts: Do Analysts Listen?” 2013, Review of Accounting Studies, 18(2): 479-521.
• “Narrative Disclosure and Earnings Performance: Evidence from R&D Disclosures” [2014], The Accounting Review, 89(2): 725-757.
• “Does the scope of sell-side analyst industry matter? An examination of bias, accuracy and information content of analyst reports” 2017, Journal of Finance, 72(3): 1285-1334.
• “Audit Personnel Salaries and Audit Quality” 2018, Review of Accounting Studies, 23(3): 1096-1136.
• “Securities Law Expertise and Corporate Disclosure” 2019, The Accounting Review, 94(4): 141-172.
• “Auditors’ Quantitative Materiality Judgments: Properties and Implications for Financial Reporting Reliability” 2019, Journal of Accounting Research, 57(5): 1303-1351.
• “When Are Firms Sued For Qualitative Disclosures? Implications of the Safe Harbor for Forward-Looking Statements” 2020, The Accounting Review, 95 (1): 31-55.
• “Cultural Diversity on Wall Street: Evidence from Consensus Earnings Forecast” 2020 Journal of Accounting and Economics, 101330.
• “The Genesis of Voluntary Disclosure: An Analysis of Firms’ First Earnings Guidance” 2021, Management Science, 67(3): 1914-1938.
• “Does FOIA Foil the SEC’s Intent to Keep Investigations Confidential?” 2021, Management Science, 67(6): 3321-3984.
• “Immaterial Error Corrections and Financial Reporting Reliability” (with Preeti Choudhary and Katherine Schipper), Contemporary Accounting Research, Forthcoming.
• “Response to the FASB Invitation to Comment: Identifiable Intangible Assets and Subsequent Accounting for Goodwill” (with Elizabeth Blankespoor, Nerissa Brown, Shana ClorProell, Elizabeth Gordon, Mahendra Gujarathi, Elaine Henry, Steve Stubben, and Brian White), Accounting Horizons, Forthcoming.
• “Through the Eyes of the Founder: CEO Characteristics and Firms’ Regulatory Filings” (with Brad Hendricks and Mark Lang), Journal of Business, Finance and Accounting, Forthcoming.
• “Human Versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations” (with Braiden Coleman and Joseph Pacelli), The Accounting Review, Forthcoming.

WORKING PAPERS

• Internal Control Weaknesses and the Demand for Financial Skills: Evidence from U.S. Job
  Postings, with Janet Gao, Joseph Pacelli, and Joseph Schroeder. Under second round at the Accounting Review.
• The Cost of Waiving Audit Adjustments with Preeti Choudhary and Katherine Schipper. Revising for third round review at the Journal of Accounting Research.
• Disclosure benchmarking by lawyers: evidence from the IPO setting with Michael Drake, Jeff McMullin, Chase Potter, and John Treu.
  
• Litigation Risk and the Regulation of Non-GAAP Reporting with Richard Cazier, Ted Christensen, and John Treu.
• Government Guarantees and Banks’ Income Smoothing, with Manuela Dantas and Felipe Silva. Under second round at Journal of Financial Services Research.
• The Paradox of Innovation Non-Disclosure: Evidence from Licensing Contracts with Gaurav Kankanhalli and Alan Kwan.
• Out of Balance: Do Analysts Issue Sell Recommendations to Manage their Recommendation Distributions? With Chao Kang, Roni Michaely, and Joseph Pacelli.