Whitman Voices

Introduction

A Champion of Truth in an Artificial World

A Champion of Truth in an Artificial World

Some might call Michael Chin an auditing cheerleader – he scoffs at the idea that it’s boring and has embraced the transparency and truth that it brings to organizations. Originally a public accountant at EY, Chin’s curiosity led him across the country to the Wharton School at the University of Pennsylvania where he obtained a Ph.D. and began his academic career.

“I had no idea I would end up in this field,” he says. “I went to the University of Arizona and majored first in engineering, graduating with degrees in information systems and finance.”

After graduation EY hired him into a special program that allowed him to obtain his M.S. in accounting tuition free. But, after five years with EY, he felt himself being drawn to academia.

“Roger Martin, a professor of mine at the University of Virginia, where I obtained a graduate degree, encouraged me to explore academia. He knew I was curious and he could see qualities in me that would be a great fit for research and teaching,” he says.

With two kids and another on the way, a career change was daunting for him but he took the plunge and enrolled at Wharton where he fell deeper in love with accounting and audit.

“I explore the human element to accounting,” he says. “What drives the decisions managers make, particularly when they communicate with investors.”

His current research examines how companies handle risk disclosures in their 10K reports. He observed that most mention all the possible risks, however obscure, to ensure everything is covered, but many investors have complained that those sections are no longer useful, due to their generic nature. His research is looking at how companies have arranged those disclosures. 

“There is no rule that you must list different types of risks in a certain way, however we observe that managers voluntarily arrange them in ways that can predict the future negative outcomes,” he says. “Thus, if you review how the order changes year over year, you can predict future negative events.”

As far as auditing goes, he’s going the distance to turn it into a positive not a negative word. “We need PR for accounting!” he jokes.

In the classroom, he adds context wherever he can, showing the students why auditing is so important. It’s vitally important to keep the markets working by infusing transparency and verification to financial discussions of companies.

“I tell my students there is so much information available now,” he says. “Investors are downloading en masse social media, articles and more, searching for any discussion about any companies. It’s more important than ever to review accounting numbers to learn more about a company and its risks. Accounting is audited, checked and verified. It’s truth.”

Chin enjoys the one-on-one discussions and mentoring in which he engages with students and loves Syracuse University and the community.

“We lived in New Jersey most recently as I was a professor of accounting at Rutgers University but being originally from Arizona, snow is still a novelty to my family,” he says. “And we have enjoyed hiking and visiting waterfalls around the area.”

His children are 15, 13 and 11, and all are enjoying the slower pace of Central New York, along with the newest member of their family, a Pumi.

“We recently acquired a Hungarian herding dog that we fell in love with after seeing it at the Westminster Dog Show in New York City,” he explains. “So, now I have a running partner!” He also enjoys basketball so he’s definitely landed in the right place for that, too.

Learn more about Whitman faculty members in the latest faculty profiles.

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