Yan Zhang, an associate professor of accounting at Binghamton University, may be published this year for her research on financial reform measures that are meant to protect investor interests in response to corporate scandals that caused the collapse of many companies.
Zhang joined the BU faculty in 2004 and is also a certified public accountant. She has published various papers on financial topics including short selling, ethical management and various aspects of the Sarbanes-Oxely Act (SOX).
Her most recent work focuses on SOX — a law enacted in 2002 that established higher standards of operation for public company boards in the U.S. by increasing corporate transparency, instituting outside oversight of corporate operations and initiating methods that ensure corporate efficiency and responsibility.
SOX addresses scandals that led to the fall of corporations, including ENRON, TYCO International, Adelphia and WorldCom. These scandals cost investors billions of dollars when the share prices of affected companies collapsed and shook public confidence in the nation’s securities markets.
Zhang’s research shows that the measures set into law by SOX have resulted in improved shareholder value and corporate performance.
One of the main topics of Zhang’s current research is SOX 407, a section of the act that requires all public corporations to hire an independent financial expert to oversee audit committees. This measure ensures that corporations will act honestly and within the limits of the law.
“Like a watchdog, [regulators] want to make sure earnings quality is good, so that’s why they want to reinforce the role of audit committees in overseeing the financial report process,” Zhang said.
Zhang feels that further regulations could still improve the effectiveness of the law, by ensuring that companies have the option of hiring an accountant or a general financial expert to oversee their audit committees.
Zhang’s research shows that non-accounting financial experts are more likely to have abnormal returns.
She conducted her research using a $20,000 grant, which she received last year in two installments — the Steve Berlin/CITGO Grant and the PwC INQuires Research Grant, each worth $10,000. In the same year she also received the Corning Award for Excellence in Research.
“I talk about my research in the class, so it kind of links what they learn to the real world,” Zhang said.
Jun Guo, a graduate student studying accounting, met Zhang five years ago. He praised Zhang’s teaching ability.
“[Zhang] is an energetic professor who knows how to explain something difficult in an easy way to understand,” Guo said. “She is hardworking, very intelligent and enthusiastic about research.”
Guo, who has worked with Zhang in her research, was grateful for the help she has provided as a professional.
“As my adviser and mentor, she is very helpful and intelligent,” Guo said. “I have been fortunate to have her as my co-author on several projects because of her attention to detail, reliability and intelligence.”
Nan Zhou, an associate professor of accounting, has collaborated with Zhang and said she is an admirable worker.
“Professor Zhang is an excellent professor and wonderful colleague, always energetic about research and enthusiastic about teaching,” Zhou said.
Sara Reiter, an accounting professor and mentor to Zhang, similarly acknowledged her talent.
“[Zhang is a] good colleague, exceptional researcher [and] great teacher,” Reiter said.