Dr. Arnold Schneider, professor of Accounting at the Georgia Tech Scheller College of Business, was recently awarded the prestigious National Business and Economics Society (NBES) Best Paper Award at the 2023 National Business and Economics Society Conference held in San Juan, Puerto Rico.
The paper, “Disclosure of Critical Audit Matters and Tolerance for Ambiguity: Impacts on Commercial Lending,” was ranked top by the NBES review committee.
“The award is very gratifying to me, especially because it comes from a conference that not only involves accounting research papers but includes papers from all business school disciplines,” said Schneider.
His research is significant in that it is not only the first to examine the effects of critical audit matter disclosures on commercial lending decisions, but it also looks at how tolerant lenders are to ambiguity with critical audit matter disclosures.
“I was not surprised that lenders with low and high tolerance for ambiguity still provided credit loans. What was surprising was that lenders with a low tolerance for ambiguity were just as likely to provide credit loans as lenders with high tolerance for ambiguity,” Schneider explained.
He determined that critical audit matter disclosures don’t affect a lender’s risk assessment or their probability of granting lines of credit.
Schneider is already working on his next research project examining the effects of loan applicants’ financial statement restatements (due to previous errors) on commercial lending decisions.
