hero image
Sam L. Tiras - Indiana University, Kelley School of Business. Indianapolis, IN, US

Sam L. Tiras Sam L. Tiras

Associate Professor | Indiana University, Kelley School of Business

Indianapolis, IN, UNITED STATES

Sam Tiras is an expert in accounting and corporate governance with over two decades of experience.


Sam Tiras is an associate professor of accounting at the Kelley School of Business in Indianapolis. His research focuses on financial accounting, implications of auditing on financial reporting, and corporate governance.

Tiras received his PhD in accounting from The Ohio State University in 1994. Prior to coming to the Kelley School of Business in 2015, he was on faculty at Louisiana State University, University at Buffalo, University of Oregon, and Florida International University.

Tiras’ research has been published in The Accounting Review, Contemporary Accounting Research, Review of Accounting Studies, Journal of Accounting and Public Policy, Journal of Business Finance and Accounting.

Industry Expertise (2)



Areas of Expertise (4)

Implications of auditing on financial reporting

Corporate Governance

Financial Accounting

International Accounting

Education (2)

The Ohio State University: Ph.D, Business Administration 1994

University of North Texas: M.S, Accounting and Information Systems 1988

Articles (7)

The Interrelation between Audit Quality and Managerial Reporting Choices and Its Effects on Financial Reporting Quality

Kelley School of Business Research Paper

Evelyn Patterson, Reed Smith, Samuel L Tiras

2016 This paper analyzes a model that includes a manager who reports earnings, an auditor that audits the manager's report, and a market that responds to the audited report. By focusing on the interrelation between audit quality and managerial reporting choices endogenously within our model, our results demonstrate how these factors jointly affect the market’s response to earnings reports – which is our definition of financial reporting quality. Our purpose is to provide conceptual guidance that can help empiricists disentangle these effects. Accordingly, we begin our analysis by defining audit quality as the probability of detecting bias, which is grounded in the professional and theoretical literature; and, by providing a linear equilibrium that can be directly applied to empirical research. Our results provide a testable theory of how institutional characteristics in the audit and financial reporting environments interact to affect the conduct of the audit, expected reporting bias, and earnings informativeness.

view more

‘Other information’as an explanatory factor for the opposite market reactions to earnings surprises

Review of Quantitative Finance and Accounting

Vincent YS Chen, Samuel L Tiras

2015 Positive (negative) earnings surprises do not necessarily generate positive (negative) market reactions. In our sample from 1990 to 2010, the market reacts negatively to 42 % of firms that meet or beat analyst forecasts and positively to 41 % of firms that miss analyst forecasts. We empirically tests whether ‘other information’, in part, accounts for the opposite sign between market reactions and earnings surprises. Our results indicate that ‘other information’ is a significant explanatory factor for the opposite market reactions to earnings surprises, and that its explanatory power is greater when investors become skeptical of the reliability of earnings information. We also find that other information facilitates investors’ assessments for earnings information because the market under-reaction to earnings information decreases in the availability of other information disseminated to investors. Investors, however, do not fully comprehend other information and tend to overestimate the persistence of other information for future earnings.

view more

The Role that Fraud has on Bankruptcy and Bankruptcy Emergence

Journal of Forensic & Investigative Accounting

Daniel Bryan, Troy Janes, Samuel L Tiras

News media and academic research have produced many accounts of corporate fraud and accounting scandals which culminate in bankruptcy. The cases of Enron, Worldcom, Delphi, and the long list of other corporate collapses document a corporate America beset by deception and false accounting that is followed by bankruptcy and loss of value. The costs of these corporate failures are borne by many stakeholders including shareholders, creditors, employees, suppliers, customers, and society. In many cases, the cost to non-shareholders can dwarf that suffered by shareholders. Once a firm files bankruptcy the loss to stakeholders can be amplified if the bankrupt firm cannot successfully reorganize and is forced to liquidate. Accordingly, this paper is concerned with the association between fraud and bankruptcy filings and a firm‟s ability to reorganize and emerge from bankruptcy.

view more

Audit committee accounting expertise, expectations management, and nonnegative earnings surprises

Journal of Accounting and Public Policy

MH Carol Liu, Samuel L Tiras, Zili Zhuang

2014 We investigate whether accounting expertise on audit committees curtails expectations management to avoid negative earnings surprises. Controlling for the endogenous choice of an accounting expert, we find that firms with an accounting expert serving on the audit committee exhibit: (1) less expectations management to avoid negative earnings surprises; (2) less nonnegative earnings surprises through expectations management; and (3) more nonnegative earnings surprises that are less susceptible to manipulations of both realized earnings and earnings expectations. We find, however, that the inclusion of an accounting expert on the audit committee curtails expectations management only in the interim quarters. While Brown and Pinello (2007) find a greater magnitude of downward revisions in analysts’ forecasts in the fourth quarter, they also document a lower incidence of nonnegative earnings surprises. Together, this suggests that with an accounting expert, audit committees likely view the fourth quarter downward revisions as driven more by guidance than by manipulation, thus focusing on curbing only expectations management in interim quarters.

view more

Optimal versus suboptimal choices of accounting expertise on audit committees and earnings quality

Review of Accounting Studies

Daniel Bryan, MH Carol Liu, Samuel L Tiras, Zili Zhuang

2013 By employing a Heckman two-stage selection model, we identify whether employing a financial expert with or without accounting expertise on the audit committee is optimal and how earnings quality varies across these optimal and suboptimal choices. Using four earnings quality measures (informativeness, timely loss recognition, earnings persistence, and accruals quality), we find no differences in earnings quality between firms optimally choosing an expert with or without accounting expertise, consistent with Demsetz and Lehn (J Polit Econ 93:1155–1177, 1985) and others who argue that when firms optimize their choice (i.e., accounting expertise), there should be no difference across the characteristic (i.e., earnings quality) being examined. We do find, however, earnings quality is significantly higher for firms that optimally choose an accounting expert relative to firms that choose (with/without accounting expertise) suboptimally. Finally, firms suboptimally choosing an accounting expert exhibit no improvement, or even lower earnings quality, than firms that optimally choose no accounting expert. Our results provide important evidence of the impact accounting expertise has on earnings quality when considering the firm’s choice.

view more

Brazil's adoption of IFRS: fertile ground for examining earnings management

Brazilian Business Review

Gina Cavalier-Rosa, Samuel L Tiras

2013 We highlight aspects of the Brazilian operating and reporting environment that have led to ample opportunities for researchers to examine the topic of earnings management in financial reporting. In particular, we discuss the potential for research since Brazil has adopted a financial reporting system (IFRS) to replace its tax compliance system. Within that framework, we consider the role of other aspects of Brazil's environment, including the recent influx of foreign investment, the ability to choose corporate structure, and the implications of inflation on the incentives and opportunities for earnings management. As a guideline to researchers in Brazil, we have also provided a discussion of the applicability of testing those earnings properties most often tested in relation to earnings management, paying particular attention to issues that would be of interest beyond Brazil's borders.

view more

The Effects of Adjusting the Residual Income Model for Industry and Firm‐Specific Factors When Predicting Future Abnormal Returns

Asia‐Pacific Journal of Financial Studies

Kwon‐Jung Kim, Cheol Lee, Samuel L Tiras

2013 This study develops a methodology that improves the implementation of the residual income model (RIM) using the value-to-book (V/B) ratio. We decompose a firm's V/B into two components – industry V/B, estimated using the industry mean price-to-book ratio and firm-specific V/B, estimated as the difference between firm V/B and industry V/B. This approach allows us to control for the effects of accounting conservatism at the industry level, and mitigates the bias typically associated with the use of analysts' earnings forecasts in implementing the RIM. We find that a trading strategy using our fundamental value measure derived from the decomposition of the V/B ratio yields higher returns than that of prior studies' RIM implementation methods relying on analysts' forecasts, particularly for industries or firms with high levels of accounting conservatism. Further results reveal that our valuation measure predicts future returns better than traditional price multiple methods (such as the price-earnings-growth or PEG measure).

view more