Mohrmann´ s paper forthcoming in Management Science
Ulf Mohrmann starts his career as an Associate Professor at NHH with a bang: His new paper on the information processing of bank depositors is to be published in Management Science.
`It is a fantastic feeling that after a lot of hard work the paper is accepted for publication in such a prestigious journal´.
Ulf Mohrmann recently became associate professor at the Department of Accounting, Auditing and Law at NHH Norwegian School of Economics. His research focusses on the demand side of auditing, audits of banks, and financial reporting.
The paper «Deferred tax asset revaluations, costly information processing, and bank deposits: Evidence from the Tax Cuts and Jobs Act» is by Mohrmann and Jan Riepe, Assistant Professor at Eberhard-Karls University of Tübingen.
Now, the paper is forthcoming in the prestigious journal Management Science, which is included on the NHH bonus list and on the Financial Times Research Rank List, and it is also on level 4* in the ABS Academic Journal Guide.
`What were your motivation behind this study?´
`There is a large literature on the costs of processing accounting information, but most studies focus on shareholders. Depositors have different incentives, so it is not possible to just transfer the existing findings´, Mohrman says.
Depositors react to accounting information and their reactions potentially influence market monitoring and financial stability, Mohrmann explains.
`Yet, we have little understanding of how depositors process accounting information despite the other studies identify depositors’ responses to banks’ financial reporting´.
Depositors have no incentives to process the details of the financial statements because of their high information processing costs. Instead, they react heuristically to summary measures like the reported profit.
`In many cases this is unproblematic, but we document a situation in which this behavior leads to deposit withdrawals that cannot be explained by new relevant information´.
`What can you say about the generalizability of the results from your study?´
`The study uses data from the US, but I do not think that depositors from other countries will behave differently´.
`Is there someone in particular, outside of the academia that you think would benefit from reading your article? ´
`Our study contributes to an ongoing discussion among standard setters about the general presentation and disclosure of financial information. We highlight a situation in which the reported profit does not accurately reflect the economic situation of a bank and make suggestions how this can be avoided´, Ulf Mohrmann says.