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Indiana University Bloomington

Sam Frumer Profesor of Accounting

Brian P. Miller

Photo of Brian Miller

Hodge Hall 5137
(812) 855-2606
bpm [at] indiana [dot] edu
Kelley Faculty Page

My educational background consists of an undergraduate in Finance and Accounting from Cedarville University, M.B.A. in Finance and International Business from the University of Cincinnati, and a Ph.D. from The Pennsylvania State University. I also hold CPA license in the state of Ohio. I began working as an auditor at BKD and then held several finance positions at Procter and Gamble including managing a multi-billion dollar cost forecast.

I have been a faculty member at Indiana University since 2008. I taught Cost Accounting for seven years before transitioning to teaching Honors Managerial Accounting. Occasionally, I have also guest lectured in various IU doctoral seminars on accounting empirical research. I have been fortunate enough to receive several Trustee Teaching Awards during my time at Indiana University. Details of my teaching are available in my curriculum vitae.

My research interests are in the areas of corporate disclosure, fraud, credit risk assessment, and executive reputation. One of my research articles entitled “The Importance of Distinguishing Errors from Irregularities in Restatement Research: The Case of Restatements and CEO/CFO Turnover” (with K. Hennes and A. Leone published in The Accounting Review - 2008) develops a methodology for distinguishing between restatements that are intentional (irregularities) and those that are caused by errors. This distinction helps clarify prior research that found minimal executive turnover after misreporting earnings. This study was recently awarded the both the 2012 Emerald Citation of Excellence Award recognizing “the 50 most outstanding articles published in the top 300 management journals in the world” and the 2013 American Accounting Associations Notable Contribution to the Literature Award.

Another stream of literature examines the impacts of the readability of financial filings on equity and debt market participants. Currently, I have three studies in this area:

  • The first study in this stream is a paper that developed out of my dissertation work entitled “The Effects of 10-K Length and Readability on Small and Large Investor Trading”(sole authored published in The Accounting Review - 2010). In this study, I document that more complex (longer and less readable) financial filings are associated with lower overall trading, and that this relationship is driven by a reduction in small investors’ trading activity.
  • Another study examines alternative measures of readability of firm’s financial filings “A Plain English Measure of Financial Reporting Readability” is co-authored with S. Bonsall, K. Rennekamp, and A. Leone and published in The Journal of Accounting and Economics (2017). In this study, we introduce a new measure of readability, the Bog Index, which is designed to capture the plain English attributes of disclosure (e.g., active voice, fewer hidden verbs). We then validate this new measure based on a combination of regulatory guidance, experiments, and archival tests using a regulatory intervention related to the readability of prospectus filings.
  • The third study in this stream is co-authored with S. Bonsall and entitled “The Impact of Narrative Disclosure Readability on Bond Ratings and the Cost of Debt Capital is published in The Review of Accounting Studies (2017).” This paper uses multiple measures of financial disclosure readability (i.e., higher Bog Index, more Passive Voice, higher Fog Index, and more words). We find that less readable financial disclosures are associated with less favorable ratings (higher default risk), greater bond rating agency disagreement, and a higher cost of debt capital. Collectively, our evidence suggests that textual financial disclosure attributes appear to not only influence bond market intermediariesí opinions, but also firmsí cost of debt capital.

Finally, I have a stream of research examining the role of board performance and managerial ability in equity and debt market. The first study entitled “Investor Perceptions of Board Performance: Evidence from Uncontested Director Elections” (with P. Fischer, J. Gramlich, and H. White published in Journal of Accounting and Economics - 2009) uses uncontested director elections to measure investor perceptions of board performance. We find that these elections serve as meaningful polls of investor perceptions of firm performance that are incremental to other performance measures (e.g., accounting performance and market returns). My second paper in this stream entitled, Managerial Ability and Credit Risk Assessment (with S. Bonsall and E. Holzman published in Management Science), examines the impact of managerial ability on credit ratings and the cost of debt capital. In this paper, we show that firms with high ability managers are associated with lower future outcome risk and, thus, both credit analysts and lenders provide more favorable credit ratings and lending terms to those firms with high ability managers. Combined, this literature suggests that markets consider the performance of the board and managers.