Ya-Wen Yang
Evolving Accountability

Wake Forest University’s teacher-scholar model is ideal for Ya-wen Yang, who enjoys delving into a research question but also wants to share her findings with those who can benefit from the knowledge. 

“I’m a naturally curious person and I like to learn new things,” says Yang, who is the Thomas C. Taylor Faculty Fellow and an associate professor of accounting at the School of Business. “So, on one hand, I can do research. If I’m curious about something, I can learn more about it and look for an answer. On the other hand, I get to tell people about what we’ve learned via the research: I have a chance to disseminate it in the classroom.”

“We talk about the teacher-scholar model at Wake Forest, and I really aspire to be a teacher-scholar,” explains Yang, who teaches both undergraduate and MBA students.

Yang’s broad research interests include how investors and analysts use financial information, the impact of evolving accounting standards and regulatory policies, and corporate governance. She has published in Accounting Horizon, Journal of Accounting & Public Policy, Journal of Accounting & Economics and Journal of Business Finance & Accounting, among other academic journals. And, in keeping with her goal of sharing her findings with practitioners and industry, Yang’s work has been cited in news outlets including The New York Times, The Wall Street Journal, Forbes, Fortune, Bloomberg Businessweek and USA Today.

Her current research focuses on two distinct areas. One is the contagion effects of cybersecurity breaches. A cybersecurity breach at one company typically causes a negative market reaction and decline in its stock price. Yang’s research confirms that such a breach can also cause a negative market reaction toward industry peers, or bystander companies, as investors worry about their vulnerabilities, as well.

But Yang has delved deeper to determine if investors use accounting profits or losses as a reference point (i.e., loss heuristic) when evaluating firms’ prospects. She found that, in the event of a cybersecurity breach at a peer firm, investors would discount bystander firms reporting a loss in the previous year more than bystander firms reporting a profit.

“If I’m an investor, I’ll tend to discount your stock price because I worry you’ll be in more trouble if you experience a breach when you’ve already been reporting a loss,” she says.

Taking it a step further, Yang and her co-authors have investigated what companies might do to limit the contagion effect.

“I’m an accountant and so internal control is very important to me,” she says. “And we have found that internal control quality would mitigate that contagion effect. So, the takeaway message is that internal quality control is important.” Her next, related project looks at social capital and the gender of executives and top management in relation to cybersecurity 

risk disclosures.

Another current research avenue for Yang is the pricing and mispricing of other comprehensive income (OCI) and is tied to earlier research about the effects of how OCI is reported on financial statements. Changes to accounting standards that now require OCI to be reported as part of the income statement help investors both to price it and to not misprice it, Yang explains. “So, our research shows the standard is achieving its intended positive impact.”

Yang’s mother, an accountant, inspired her to study accounting in college and as she continued her studies, she became enamored with the idea of a career in academia.

“Now that I have tenure, I’m focusing on maintaining a healthy research pipeline,” she says. “I have the privilege of working with people I really enjoy working with–my long-time collaborators– and continuing to explore the research inquiries that matter to me. Research remains one of my passions.”

“One thing I like about the School of Business is the autonomy,” she continues. “I can pick a project I care about, form the research question and design the research method. And when I find the answer I can disseminate it, and not just for an academic audience. You can write a piece based on your findings to disseminate to industry and to the practitioner who will care about your findings. That’s the fun part.”