Welcome!

My name is Sebastian and I am an Assistant Professor in Accounting from the University of Amsterdam, Amsterdam Business School. You can find more information about me and my work on this site.

My research examines how the formatting and complexity of firm disclosure influences users, preparers and auditors of financial statements in their judgment and decision making. While my research projects involve several agents, they all relate to fundamental topics in financial accounting, such as disclosure credibility, investor learning, earnings management and fraud. Using mostly economics based experimental methods, I capitalize on the comparative advantage of experiments at disentangling the effect of disclosure on investment decisions, measuring intervening processes and drawing strong causal inferences.

Check out the section on research projects for an overview of my work and find more information about me in my CV.

Sebastian Stirnkorb

Assistant Professor in Accounting

University of Amsterdam

Amsterdam Business School

Email:

s.stirnkorb@uva.nl

Address:

Plantage Moudergracht 12

Postbus 15953

1001 NL Amsterdam

EDUCATION

2016-2021

PhD in Accounting

ROTTERDAM SCHOOL OF MANAGEMENT,

ERASMUS UNIVERSITY

PhD in Accounting and Control

Doctoral thesis:"Changes in the Information Landscape and Capital Market Communication"

2018

Research Visit

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

Research visit from August to December 2018

Invited by Jessen Hobson

2013-2016

Master's Degree

HUMBOLDT UNIVERSITY, BERLIN

Master in Economics and Management Studies

Master thesis: "Behavioral Approaches to Information Acquisition and Avoidance"

RESEARCH PROJECTS

PROJECTS

TRANSACTION COST UNBUNDLING AND INVESTORS' RELIANCE ON INVESTMENT RESEARCH: EVIDENCE FROM EXPERIMENTAL ASSET MARKETS
single-authored. Accounting, Organizations and Society (Forthcoming).
Broker-dealers traditionally charge their clients for the provision of investment research with a composite fee that bundles payments for research with other variable fees, such as those for trade executions. Due to regulatory changes in Europe, US broker-dealers temporarily allowed some of their clients to pay an explicit fee for the provision of investment research. Drawing on the sunk cost literature, I examine how transaction cost unbundling influences investors’ reliance on investment research. Results from 16 experimental markets indicate that investors place greater weight on costly forecasts under a system of unbundled payments compared to bundled payments, but only if transaction costs are sufficiently high, which is consistent with the dynamics of a sunk cost fallacy. I find marginal evidence that the enhanced focus on the forecast further inhibits investors' learning, as reflected in a slower reduction of price errors over time. These results are important since investors worldwide are increasingly paying explicit charges for investment research, a trend reinforced by a recent SEC policy change.

MANAGING EARNINGS TO APPEAR TRUTHFUL: THE EFFECT OF PUBLIC SCRUTINY ON EXACTLY MEETING A THRESHOLD

with Jessen Hobson

The past two decades have not eliminated managers’ willingness to manage earnings to meet and beat thresholds but have increased investors’ skepticism of earnings that exactly meet those thresholds. This increased skepticism provides perverse incentives to not meet earnings expectations exactly. Using a stylized experiment, we find that managers who are more sensitive to the scrutiny of others misreport to avoid exactly meeting a benchmark when public scrutiny increases, even though they have no financial incentive to do so. Thus, we uncover misreporting to appear truthful as a new incentive to manage earnings. We further find that this scrutiny increases managers’ belief that investors will accept their reports, consistent with managers misreporting for self-presentational goals. These results are important as managers are increasingly scrutinized by regulators, activist shareholders, social and traditional media.

ACTIVATING AUDITORS' WILLINGNESS TO ADDRESS RISK: EFFECTS OF FOCUSING AUDITORS ON COGNITIVE DISSONANCE AND FRAUD
with Jessen Hobson, Mark Peecher and Devin Williams
This study reports the results from a field experiment with highly experienced auditors listening live to earnings conference calls of their firm's clients. This unique setting allows us to examine our hypothesis that auditors face non-monetary disincentives to investigate fraud, such that they perceive a lower need to change testing procedures after listening to their own client's call than if they listen to calls of other clients. Based on the idea that auditors are motivated to adhere to a form status quo bias, we further predict that auditors depart from the status quo when reminded of their professional duty to investigate fraud, particularly when they are simultaneously alerted to watch for signs of cognitive dissonance in the CEO. Results are consistent with our predictions and extend beyond our controlled experiment, as reflected in two key outcomes: the size and number of actual misstatements that auditors detect and report during the audit. We offer implementable interventions that can activate auditors' willingness to address misstatement risk.

NOT SEEING EYE TO EYE: HOW COMPANY IDENTIFICATION AND LOCUS OF ATTRIBUTION DRIVE INVESTOR JUDGMENTS OF MANAGEMENT CREDIBILITY
with Erik Peek and Marcel van Rinsum
This study investigates the joint effects of company identification and locus of attribution on investors’ judgments of management credibility. We study these effects in the context of an adverse event disclosure. Building on Social Identity theory and prior empirical findings, we posit that shareholders identify with the company they are invested in and make different judgments about managerial credibility than non-identified outside investors when managers employ external attribution. The findings from our experiment confirm that non-identified investors view external attributions as less credible than identified investors do. In contrast, we find no such difference when management uses internal attribution. We provide evidence on the mediating role of in-group favoritism, and we document that the differences in credibility are mainly driven by perceptions of trustworthiness (rather than competence). In addition, our results indicate that differences in credibility judgments between identified and non-identified investors affect valuation judgments, thus inducing disagreement among investors. One important practical implication of our findings is that company identification can be a valuable asset to companies. Another is that, arguably counterintuitively, managers should shy away from employing external attributions when communicating about adverse events with prospective, non-identified investors.

CONTACT