On 11 May, the Division of Business and Management (DBM) arranged a research seminar titled “Auditor Regulatory Oversight, Private Information Flow, and Return Predictability: Evidence from PCAOB International Inspection Program " given by Dr. Yuyan Tang. Dr. Tang obtained her PhD degree in Accounting from City University of Hong Kong and bachelor’s degree in Accounting from Fudan University. She has been doing research in the fields of short selling, auditing, international accounting, crash risk and corporate culture. Her papers are presented at the major international accounting conferences such as AAA and CAAA. 

Dr. Yuyan Tang at the seminar

Dr. Tang and her coauthors explore the relation between Public Company Accounting Oversight Board (PCAOB) international inspections and the private information advantage of short sellers. Utilizing a difference-in-differences research design, they find that PCAOB international inspections reduce the ability of shorting demand to predict negative future returns. This finding is consistent with the view that PCAOB inspections reduce the private information advantage of short sellers by improving the quality of firm-specific public information.

The Audience

Using return predictability of shorting demand as a measure to capture private information flow surrounding a firm’s stock, this study suggests that high-quality audits reduce firms’ private information flows. This study, therefore, supports the substitutive relation between public and private information flows of firms.

Dr. Yuyan Tang was discussing with the Audience

Dr. Tang’s study highlights the role of auditor regulatory oversight in facilitating the establishment of a level playing field by reducing firms’ private information flows in the stock market. All the participates of the seminar enjoyed Dr. Tang’s presentation of an important topic.