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John  McInnis - The University of Texas at Austin, McCombs School of Business. Austin, TX, US

John McInnis John  McInnis

Associate Professor, Department of Accounting | The University of Texas at Austin, McCombs School of Business

Austin, TX, UNITED STATES

Financial accounting, auditing, financial reporting, earnings management, and forecasting

Areas of Expertise (10)

Financial Accounting Auditor Liability Predicting Credit Loss Earnings Forecasts Earnings Management Accounting Standards Cash Flow Forecasts Analysts Forecasts Financial Accounting and Audits Financial Reporting Fraud

Biography

John M. McInnis is an educator and researcher in accounting and auditing, who has studied and taught on earnings management and reporting, securities litigation, earnings forecasting, cash flow, financial reporting regulation, reporting fraud, and auditor liability. His research examines the long-run implications, and potential deterrence, of earnings management. He also investigates the relationship between accounting information and firm risk.

McInnis is an associate professor in the department of accounting at the McCombs School of Business, The University of Texas at Austin, where he teaches financial accounting in the Master of Professional Accounting program.

McInnis has published articles in top scholarly journals including The Accounting Review, Journal of Finance, Management Science, and Journal of Accounting & Economics. He received the George H. Newlove Endowed Faculty Fellowship in Accounting in 2014, the Mary L. Collins Doctoral Fellowship in Accounting in 2007, and the Deloitte Foundation Dissertation Fellowship in 2006.

Education (2)

University of Iowa: PhD, Accounting & Finance 2008

University of Texas: BBA and MPA, Business Administration 2002

Highest Honors

Media Appearances (4)

Sarbanes-Oxley, Bemoaned as a Burden, Is an Investor’s Ally

New York Times  online

2017-09-08

Its authors are Matthew S. Ege, an assistant professor of accounting of Texas A&M University, and Dain C. Donelson and John M. McInnis, both of the University of Texas at Austin. They say their work is the first to link weak internal controls on financial reporting with a higher risk of undisclosed accounting fraud at public companies. And proof of this link is an important consideration when weighing the costs and benefits of Sarbanes-Oxley.

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Internal control weaknesses correlate with financial fraud

Accounting Today  online

2017-09-07

The study, by professors Matthew Ege of Texas A&M University and Dain C. Donelson and John M. McInnis of The University of Texas at Austin, found the incidence of fraud disclosures at companies previously found by auditors to have material weaknesses in their internal controls is approximately 80 to 90 percent greater than companies on average, depending on how it was measured.

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Current Financial Accounting Research

Knowledge-to-Go Webinar  online

2013-02-12

Professor John McInnis discusses recent research on:

- Fair value accounting and the financial crisis
- Rules-based vs. principles-based accounting standards
- Governance reforms of Sarbanes-Oxley Act and its effectiveness in reducing the risk of accounting fraud

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The Trouble With Superheroes

The Economist  print

2011-10-01

Cazier and McInnis studied 192 CEOs who had been brought in from outside between 1993 and 2005. They discovered that companies usually recruit CEOs from companies that have done well in the past—no surprise there—and that they usually pay them a fat premium. But then comes the rub: the pay premium is negatively correlated with the future performance of the firm that does the hiring. In other words: the more dazzling the outside recruit, the worse he performs in his new role.

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Articles (9)

John M. McInnis Citations Google Scholar

Listing of top scholarly works by John M. McInnis.

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Financial Statement Quality and Debt Contracting: Evidence from a Survey of Commercial Lenders Contemporary Accounting Research

2017-12-01

We survey commercial bank lenders to better understand how they evaluate and react to variation in financial statement quality and how they view recent changes in accounting standards. A unique aspect of this study is that our respondents focus on medium-size loans to private companies.

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Explaining Rules-Based Characteristics in U.S. GAAP: Theories and Evidence Journal of Accounting Research

2016-02-01

Despite debate on the desirability of rules‐based standards, no studies provide evidence on why accounting standards take on rules‐based characteristics. We identify and test five theories from prior research (litigation risk, constraining opportunism, complexity, transaction frequency, and age) that could explain why some U.S. accounting standards contain rules‐based characteristics.

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The Effect of Governance Reform on Financial Reporting Fraud Journal of Law, Finance and Accounting

2016-12-01

In response to financial reporting scandals, Congress and the securities exchanges mandated increases in board and audit committee independence and banned most non-audit services. We exploit these exogenous shocks to examine whether these governance reforms reduced financial reporting fraud.

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Predicting Credit Losses: Loan Fair Values Versus Historical Costs The Accounting Review

2014-01-01

We examine the ability of reported loan fair values to predict credit losses relative to the ability of net historical costs currently recognized under U.S. GAAP.

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Discontinuities and Earnings Management: Evidence from Restatements Related to Securities Litigation Contemporary Accounting Research

2012-05-11

In this study, we provide direct evidence linking earnings management to earnings discontinuities for a sample of firms that settle securities class action lawsuits and restate earnings from the alleged GAAP violation period.

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Investor Sentiment and Analysts' Earnings Forecast Errors Management Science

2011-03-11

We correlate analysts' forecast errors with temporal variation in investor sentiment. We find that when sentiment is high, analysts' forecasts of one-year-ahead earnings and long-term earnings growth are relatively more optimistic for “uncertain” or “difficult-to-value” firms.

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Rules-Based Accounting Standards and Litigation The Accounting Review

2012-07-01

Some claim that rules-based accounting standards shield firms from litigation, while others argue that violations of detailed rules give plaintiffs a “roadmap” to successful litigation. We inform this debate by investigating whether rules-based standards are associated with the incidence and outcome of securities class action litigation.

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The Timeliness of Bad Earnings News and Litigation Risk The Accounting Review

2012-11-01

This study investigates whether the timely revelation of bad earnings news is associated with a lower incidence of litigation.

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