Siew Hong Teoh

Lee and Seymour Graff Endowed Professor; Professor of Accounting

“Know how, know why. True knowledge is knowing both how and why. It is not enough to learn how to execute known techniques and strategies. When you also know why you’re doing it, you can adapt and succeed in a fast-changing world.”

steoh@anderson.ucla.edu

Areas of Expertise:

Analyst Forecasts
Big Data and Capital Markets
Earnings Management
Innovation
Limited Attention
Psychology and Accounting Information

About

Biography

Siew Hong Teoh joined the UCLA Anderson faculty as a professor of accounting in 2021. Her primary research occurs at the intersection of accounting, finance and economics in the area of information and capital markets.

Teoh studies how the content, form of presentation and timing of disclosure of accounting information affect firm values, manager and investor behavior and economic welfare. “Managers may behave opportunistically to take advantage of investors’ limited attention to accounting and other value-relevant information,” she says. “This may cause firm misvaluation. Knowing how and why accounting information may be mispriced provides profit opportunities to those who understand and are attentive to such information.”

Her current research introduces the visual attention hypothesis: that visuals in firm earnings announcements increase investor attention to earnings news. She and her colleagues find that when visuals attract investor attention to a firm’s earnings announcements on Twitter, investors respond more strongly to the information in valuing the firm. “But visuals can be a double-edged sword,” she says. “They can encourage investors to overreact by valuing the firm too high initially, and the overvaluation is reversed later.”

In new research into the ways images convey information to capital market participants, Teoh is studying how face impressions from analysts’ LinkedIn profile photos are related to their access to information from top management and other industry experts. Analysts who are perceived to look more trustworthy or dominant produce more accurate earnings forecasts. “CEOs are more willing to share information with a Trusty Tom analyst,” Teoh says. An attractive face confers only a temporary advantage; it helps when analysts are new to the industry, or with new CEOs and CFOs. “We find striking gender differences: Female analysts with dominant-looking faces are less accurate, perhaps because they are given less access to insiders. They are also less likely to be voted All-Star status relative to dominant-looking male analysts. These results hint that societal bias and gender stereotypes influence others’ impressions of female analysts.”

Teoh received the Moskowitz Prize from the Social Investment Forum for best paper on socially responsible investing. Her work on earnings management has been widely cited by scholars in accounting and finance for the important finding that the market does not efficiently impound management’s actions into security prices. She has published more than 50 articles in the leading journals in accounting, finance and economics.

Teoh previously served as an assistant professor of accounting at UCLA Anderson and has served on faculty at the University of Michigan and the Ohio State University. She was most recently the Dean’s Professor of Accounting at UCI Paul Merage School of Business.

Education

Ph.D., Graduate School of Business, University of Chicago

MBA, Graduate School of Business, University of Chicago

M.Sc. Economics, London School of Economics and Political Science

B.Sc. Economics (First Class Honors), London School of Economics and Political Science

More about Siew Hong Teoh’s research can be found at ideas.repec.org and SSRN.

Publications

“Non-Audit Services in Audit Committee-Interlocked Firms, Financial Reporting Quality, and Future Performance” Linna Shi, Siew Hong Teoh, and Jian Zhou. Journal of Accounting, Auditing and Finance forthcoming.
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“Visuals and Attention to Dissemination of Earnings News” Alex Nekrasov, Siew Hong Teoh, and Shijia Wu. Review of Accounting Studies forthcoming.
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“Valuation of New Trademarks” Po-Hsuan Hsu, Dongmei Li, Siew Hong Teoh and Kevin Tseng. Management Science forthcoming.
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“Cater to Thy Client: Analyst Responsiveness to Institutional Investor Attention.” Peng Chia Chiu, Ben Louries, Alex Nekrasov, and Siew Hong Teoh. Management Science forthcoming.
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“Misvaluation and Corporate Inventiveness.” Ming Dong, David Hirshleifer, and Siew Hong Teoh. Journal of Financial and Quantitative Analysis forthcoming
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“Opportunity knocks but once: delayed disclosure of financial items in earnings announcements and neglect of earnings news,” Alex Nekrasov, Yifan Li, and Siew Hong Teoh. Review of Accounting Studies Vol 25-1, January 2020; 159-200.
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“Private Firm Investment and Public Peer Misvaluation” Brad Badertscher, Devin Shanthikumar and Siew Hong Teoh, The Accounting Review, 94(6), November 2019: 31-60.
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“There Is Little Evidence that the Industrial Revolution Was Caused by a Preference Shift ” David Hirshleifer and Siew Hong Teoh. Behavioral and Brian Sciences, 42, 2019, E202.
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“Decision Fatigue and Heuristic Analyst Forecasts” David Hirshleifer, Yaron Levi, Ben Lourie, and Siew Hong Teoh. Journal of Financial Economics, 133(1), pp.83-98.
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“Headline Salience and Over- and Underreaction to Earnings” Xuan Huang, Alex Nekrasov, and Siew Hong Teoh. The Accounting Review, 93(6), November 2018: 231-255
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“Social Transmission Bias and the Cultural Evolution of Folk-Economic Beliefs ” David Hirshleifer and Siew Hong Teoh. Behavioral and Brian Sciences, 41, 2018, E170.
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“The Promise and Challenges of New Datasets for Accounting Research” Siew Hong Teoh. Accounting, Organizations, and Society, 68-69, July 2018: 109-117.
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“How Psychological Bias Shapes Accounting and Financial Regulation,” David Hirshleifer and Siew Hong Teoh, Behavioral Public Policy, 1(1), (2017):87-105.
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“Limited attention, statement of cash flow disclosure, and the valuation of accruals” Bin Miao, Siew Hong Teoh, and Zinan Zhu. Review of Accounting Studies, 21, June 2016:473-515.
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“Tone Management,” Xuan Huang, Siew Hong Teoh, and Yinglei Zhang. The Accounting Review, 89(3), July 2014: 1083-1113.
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“Mispricing of Book-Tax Differences and Trading Behavior of Short Sellers and Insiders,” Sabrina Chi, Mort Pincus, and Siew Hong Teoh. The Accounting Review, 89(2), May 2014: 511-543.
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“Board Interlocks and Earnings Management Contagion,” Peng-Chia Chiu, Siew Hong Teoh, and Feng Tian, The Accounting Review, 88-3, 2013; 915-944.
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“Overvalued Equity and Financing Decisions,” Ming Dong, David Hirshleifer, and Siew Hong Teoh, Review of Financial Studies, 25-12, 2012; 3645-3683.
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“Are Overconfident CEOs Better Innovators?” David Hirshleifer, Angie Low, and Siew Hong Teoh. Journal of Finance, 67-4, August 2012; 1457–1498.
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“Limited Investor Attention and Stock Market Misreactions to Accounting Information,” David Hirshleifer, Sonya Lim, and Siew Hong Teoh, Review of Asset Pricing Studies 1-1, December 2011; 35-73.
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“Short Arbitrage, Return Asymmetry and the Accrual Anomaly,” David Hirshleifer, Siew Hong Teoh, and Jiewei Yu , Review of Financial Studies 24-7, July 2011; 2429-2461.
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“The Accrual Anomaly: Risk or Mispricing?” David Hirshleifer, Kewei Hou, and Siew Hong Teoh, Management Science 58-2, February 2012; 320–335.
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“Data Truncation Bias, Loss Firms, and Accounting Anomalies,” Siew Hong Teoh and Yinglei Zhang, The Accounting Review 86-4, 2011; 1445-1475.
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“Systemic Risk, Coordination Failures, and Preparedness Externalities: Applications to Tax and Accounting Policy,” David Hirshleifer and Siew Hong Teoh. Journal of Financial Economic Policy 1-2, 2009; 128–142 (lead).
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“The Psychological Attraction Approach to Accounting and Disclosure Policy,” David Hirshleifer, and Siew Hong Teoh. Contemporary Accounting Research 6-4, 2009; 1067-1090.
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“Driven to Distraction: Extraneous Events and Underreaction to Earnings News,” David Hirshleifer, Sonya Lim, and Siew Hong Teoh, Journal of Finance 64-5, 2009; 2287-2323.
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3rd Prize, 2007 Chicago Quantitative Alliance Annual Academic Competition.

“Do Individual Investors Drive Post-Earnings Announcement Drift? Direct Evidence from Personal Trades,” David Hirshleifer, James N. Myers, Linda A. Myers, and Siew Hong Teoh, The Accounting Review 83-6, 2008; 1521-1550.
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“Accruals, Cash Flows, and Aggregate Stock Returns” David Hirshleifer, Kewei Hou, and Siew Hong Teoh, Journal of Financial Economics, 91, 2009; 389–406.
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“Does Investor Misvaluation Drive the Takeover Market?” Ming Dong, David Hirshleifer, Scott Richardson, and Siew Hong Teoh, Journal of Finance 61-2, April 2006; 725-762.
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“Do Investors Overvalue Firms with Bloated Balance Sheets?,” David Hirshleifer, Kewei Hou, Siew Hong Teoh and Yinglei Zhang, Journal of Accounting and Economics 38, December 2004; 297-331. Conference Issue on Research on Market Efficiency, Valuation, and Mispricing: Risk, Behavioral, and Alternative Explanations
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“The Walkdown to Beatable Analyst Forecasts: The Roles of Equity Issuance and Insider Trading Incentives,” Scott Richardson, Siew Hong Teoh, and Peter Wysocki, Contemporary Accounting Research 19-3, Winter 2004; 885-924.
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“Herd Behavior and Cascading in Capital Markets: A Review and Synthesis,” David Hirshleifer and Siew Hong Teoh, European Financial Management 9-1, March 2003; 25-66.
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“Limited Attention, Information Disclosure, and Financial Reporting,” David Hirshleifer and Siew Hong Teoh, Journal of Accounting and Economics 36-1/3, December 2003; 337-386. Conference Issue on Current Issues in Financial Reporting, Disclosure Practices, and Corporate Governance.
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“Investor Psychology in Capital Markets: Evidence and Policy Implications,” Kent Daniel, David Hirshleifer and Siew Hong Teoh, Journal of Monetary Economics 49-1, January 2002; 139-209. Reprinted in, The Psychology of World Equity Markets, Werner De Bondt, editor, Edward Elgar Publishing Ltd., July, 2005.
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“Why Do New Issuers and High-Accrual Firms Underperform: The Role of Analysts’ Credulity,” Siew Hong Teoh, and T.J. Wong, Review of Financial Studies 15-3, Summer 2002; 869-900.
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“Issues in the Use of the Event Study Methodology: A Critical Analysis of Corporate Social Responsibility Studies,” Abigail McWilliams, Donald Siegel, and Siew Hong Teoh, Organizational Research Methods 2-4, October 1999; 340-365.
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“The Effect of Socially Activist Investment Policies on the Financial Markets: Evidence from the South African Boycott,” Siew Hong Teoh, Ivo Welch and Paul Wazzan, Journal of Business 72-1, January 1999; 35-89.
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Awarded Moskowitz Prize for best paper on socially responsible investing by the Social Investment Forum Board, 1999.

“Are the Accruals During and Initial Public Offering Opportunistic?” Siew Hong Teoh, T.J. Wong and Gita Rao, Review of Accounting Studies 3-1/2, 1998; 175-208.
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“Earnings Management and the Long-Run Market Performance of Initial Public Offerings,” Siew Hong Teoh, Ivo Welch, and T.J. Wong, Journal of Finance 53-6, December 1998; 1935-1974.
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Nominated for Brattle Prize for outstanding paper published by the Journal of Finance in 1998.

“Earnings Management and the Underperformance of Seasoned Equity Offerings,” Siew Hong Teoh, Ivo Welch and T.J. Wong, Journal of Financial Economics 50-1, October 1998; 63-99.
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“Information Disclosure and Voluntary Contributions to Public Goods,” Siew Hong Teoh, Rand Journal of Economics 28-3, Autumn 1997; 385-406. Lead article.
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“Perceived Auditor Quality and the Earnings Response Coefficient,” Siew Hong Teoh and T.J. Wong, Accounting Review 68-2, April 1993; 346-366.
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“Auditor Independence, Dismissal Threats, and the Market Reaction to Auditor Switches,” Siew Hong Teoh, Journal of Accounting Research 30-1, Spring 1992; 1-23.
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“Non Disclosure and Adverse Disclosure as Signals of Firm Value,” Siew Hong Teoh and Chuan Yang Hwang, Review of Financial Studies 4-2, April 1991; 283-314.
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Other Publications

“Limited Attention,” Sonya Seongyeon Lim and Siew Hong Teoh. Chapter 16 pp. 295-312 in Behavioral Finance: Investors, Corporations, and Markets. Kent Baker and John Nofsinger, Editors, John Wiley, 2010.

“Psychological Influences on Financial Regulation and Policy,” Siew Hong Teoh and David Hirshleifer. Chapter 9 pp. 151-168 in Behavioral Finance: Investors, Corporations, and Markets. Kent Baker and John Nofsinger, Editors, John Wiley, 2010.

“Thought and Behavior Contagion in Capital Markets,” David Hirshleifer and Siew Hong Teoh, Ch. 1 of Handbook of Financial Markets: Dynamics and Evolution, Thorsten Hens and Klaus Reiner Schenk-Hoppé, eds., Handbooks in Finance series (William Ziemba, ed.), Elsevier/North-Holland, (2009):1-56.

“Decisions Without Blinders,” David Hirshleifer and Siew Hong Teoh, Harvard Business Review, 2006. 84-4,143.
http://harvardbusinessonline.hbsp.harvard.edu/hbrsa/en/issue/0604/article/LettersToEditor.jhtml

“Self-Deception and Deception in Capital Markets,” Joshua D. Coval, David Hirshleifer, and Siew Hong Teoh, Ch. 6 of Deception in Markets, Caroline Gerschlager, ed., Palgrave Macmillan/U.K., (2005):131-169.

“Using Psychology to Explain Market Moves,” with David Hirshleifer, Optimus. January 2001, pp. 34-35.

Working Papers

“Bringing Innovation to Fruition: Insights from New Trademarks” (previous titiled “CEO incentives and new product development: Insights from trademarks”) Lucile Faurel, Qin Li, Devin Shanthikumar, and Siew Hong Teoh.
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“Face Value: Analysts’ Facial Appearance, Forecasts, and Career and Market Outcomes” Lin Peng, Siew Hong Teoh, Yakun Wang, and Jiawen Yan

“Using Google Searches of Firm Products to Nowcast Sales Revenues and Detect Revenue Management” Peng Chia Chiu, Xuan Huang, Siew Hong Teoh and Yinglei Zhang.
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“Index Investing and Asset Pricing under Information Asymmetry and Ambiguity Aversion.” Chong Huang, David Hirshleifer, and Siew Hong Teoh.
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“Model Uncertainty, Ambiguity Aversion and Market Participation.” Chong Huang, David Hirshleifer, and Siew Hong Teoh.
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“How Salience of Management Earnings Guidance Affects Forecasting Behavior: Evidence from a Quasi-Natural Experiment on Estimize” Qin Li, Ben Lourie, and Siew Hong Teoh.
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“Understanding the Change in the Cross-Sectional Relation between Accruals and Cash Flows” Yashu Dong, Siew Hong Teoh, and Yinglei Zhang.
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“Disclosure to an Audience with Limited Attention” David Hirshleifer, Sonya S. Lim, and Siew Hong Teoh.
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