Ahmed Rashad Abdel-khalik

Abdel-khalik conducted an empirical study regarding the usefulness of disaggregated financial information for commercial lending decision making. His research indicated that perceived risk of borrowing firms is negatively influenced by greater aggregation of information in financial reports, especially when the financial conditions of the borrower are marginal.[7] He also became interested in the role of CEOs’ risk aversion on key indicators and decisions. In 2007, he published a paper titled "An Empirical Analysis of CEO Risk Aversion and the Propensity to Smooth Earnings Volatility" and in 2014 he published another article titled "CEO Risk Aversion and R & D Expenditures." His findings in these articles revealed negative relationship between the degree of risk aversion and the volatility of performance measures as well as between risk aversion and levels of expenditures on R&D.[8] In 2015, Abdel-khalik, jointly with Po-Chang Chen, published a paper linking the growth in OTC derivatives and accounting. They found that the use of cash flow hedge accounting treatment helps reduce earnings volatility/equity risk, and that firms increase their use of non-trading derivatives when facing high level of earnings volatility.[9]

In the late 1990s, Abdel-khalik published a paper on China's A and B shares and the information environment regarding the only two types of shares that existed at the time. He employed an event-study approach and found correlation between earnings and unexpected returns for ‘A’ shares but not for ‘B’ shares, which at that time were restricted to investment by foreign institutions. He also highlighted various possible institutional explanations for the study results.[10]

In 2017, Abdel-khalik published an article showing that, for an entire decade, Enron Corporation has borrowed huge amounts of money from both JPMorgan Chase and Citibank under contracts camouflaged as derivative contracts of commodity swaps, but reported these loans as sales revenues and as cash flow from operations. These disguised loans allowed Enron to survive nine years longer than it would have otherwise.[11] In 2019, Abdel-khalik published a paper critical of some aspects of accounting standards which reflects his recent research genre.[12]

Abdel-khalik published a paper regarding the motivation of private company owners’ demand for audit assurance. According to his study, the owners view audits as compensatory control systems for the organizational loss of control.[13] In another article, he applied self‐selection bias in audit pricing and presented a method for direct evaluation of knowledge spillover costs from audits to management advisory services.[14]

Abdel-khalik conducted two experiments in the 1980s and presented the findings regarding the effects of various organizational structures on external auditors planning audit programs.[15]

Abdel-khalik studied Myron Gordon's model of transfer pricing system and published a paper indicating that Gordon's model could, under certain conditions, result in promoting inefficient behavior by employees or management. He also presented possible solutions and extensions to the model.[16] Additionally, in another study he assessed the value of major transfer pricing models and discussed their development in the context of a firm's economic performance.[17]

Abdel-khalik and Thomas Keller conducted an experiment on the decision effects of changes in earnings vs. changes in cash flow. The American Accounting Association published their findings in a monograph in 1979 noting the results show that analysts are fixated on following accounting earnings even when cash flow from operations is more informative. Abdel-khalik also conducted an experiment with K. M. El-Sheshai on human judgement showing that the choice of information cues influences the utilization of these cues in making decisions and on the efficiency of human information processing.[18] He, with Bippin Ajinkya, investigated if earnings forecast revisions are reflected in security prices during the period when they were private information as compared to later periods when these forecasts became public. They found results consistent with the semi-strong form of market efficiency—private information are not reflected in security prices.[19]

• The Economic Effects on Lessees of FASB Statement No. 13, Accounting for Leases (1981) ISBN 978-9992929766
• The Impact of Accounting Research on Practice and Disclosure (1978) ISBN 9780822303961
• Empirical Research in Accounting: A Methodological Viewpoint (1979) ISBN 9780865390324
• Research Opportunities in Auditing: The Second Decade (1989) ISBN 9789999108843
• Accounting for Risk, Hedging and Complex Contracts (2013) ISBN 9781136489297
• BRAZEN: Big Banks, Swap Mania and the Fallout (2019) ISBN 9789813275584

• (1973). "The Effect of Aggregating Accounting Data on the Lending Decision: An Empirical Investigation," Empirical Research in Accounting: Selected Studies, Journal of Accounting Research, Vol. 11. pp. 104–138.
• (1980). "Information choice and utilization in an experiment on default prediction." Journal of Accounting Research, 325–342.
• (1990). "The jointness of audit fees and demand for MAS: A self‐selection analysis." Contemporary Accounting Research, 6(2), 295–322.
• (1993). "Why do private companies demand auditing? A case for organizational loss of control." Journal of accounting, auditing & finance, 8(1), 31–52.
• (2014). "CEO Risk Aversion and R & D Expenditures," ABACUS. A Journal of Accounting, Finance, and Business Studies, Vol. 50, No. 3, pp. 245–278.
• (2019). "How Enron Used Accounting for Prepaid Commodity Swaps to Delay Bankruptcy for One Decade: The Shadowy Relationships With Big Banks". Journal of Accounting, Auditing and Finance., pp. 309–328.