Kai Du Awarded Deloitte Foundation Doctoral Fellowship in Accounting

Kai Du, a PhD candidate at the Yale School of Management, has been awarded a $25,000 grant from the Deloitte Foundation Doctoral Fellowship in Accounting.

Du is one of 10 doctoral candidates to receive a 2011 fellowship from the Deloitte Foundation. The recipients were nominated by the accounting faculty of their schools and chosen by a selection committee of accounting educators.

Du is in his fourth year of study at Yale SOM. In his recent research, Du, along with associate professor of accounting Frank Zhang, has examined how public firms manage earnings during orphan months that are often created when a company changes its fiscal year ending date. They found that during these missing months, which are not covered by regular quarterly reports or financial databases, firms report much lower income than they do in adjacent quarters and deflate earnings, mainly by recording higher operating expenses. "Overall, our findings suggest that managers treat fiscal year changes as a rare opportunity to shift earnings without being penalized by the capital market," they write. The paper, "Orphans Deserve Attention," was recently featured in the New York Times. 

Du's dissertation, advised by Shyam Sunder, the James L. Frank Professor of Accounting, Economics, and Finance, studies the interaction between accounting information and economic fundamentals. One chapter of his dissertation examines the impact of loan loss provision on the risk-sharing function of banks. Rick Antle, William S. Beinecke Professor of Accounting, and Jacob Thomas, the Williams Brothers Professor of Accounting and Finance, and Aleh Tsyvinski, Professor of Economics, also serve on Du's dissertation committee.