Faculty & Research

Rimmy Tomy

Rimmy Tomy

Assistant Professor of Accounting

Rimmy E. Tomy’s research interests include financial reporting, bank accounting, regulation, and auditing. Her research focuses on the impact of regulatory intervention on firms' financial reporting and real activities, and the role of external monitors such as auditors and regulators in corporate oversight and governance.

Professor Tomy earned her Ph.D. in Accounting from the Stanford Graduate School of Business. She holds an MS in Accounting from the University of Colorado at Boulder, a post graduate diploma in Finance and Accounting from Xavier Institute of Management, and a BS from St. Stephen’s College, University of Delhi.

Outside of academia, Professor Tomy has previous corporate experience working at Ernst & Young LLP and McKinsey & Company.

 

2019 - 2020 Course Schedule

Number Title Quarter
30600 Workshop in Accounting Research 2019 (Fall)
30600 Workshop in Accounting Research 2020 (Winter)
30600 Workshop in Accounting Research 2020 (Spring)

REVISION: Input Price Shocks and R&D Investment: Evidence from the 1999 Taiwan Earthquake
Date Posted: Aug  09, 2019
The literature has argued that R&D investment is less susceptible than capital expenditures to short-term cash flow shocks because of high adjustment costs. However, managerial myopia combined with the accounting standard for R&D investment (SFAS No. 2) creates incentives to reduce R&D in response to short-term cash flow shocks. I use the novel setting of the 1999 Taiwan earthquake, which increased production costs for a subset of firms in the US high-technology industry. I find firms hurt by the shock do not decrease capital expenditures but reduce R&D investment, lowering future innovation. As evidence of myopic behavior, I find affected firms are more likely to meet or just beat analyst forecasts. I also find that affected firms are more likely to overstate revenue.

REVISION: Regulators' Disclosure Decisions: Evidence from Bank Enforcement Actions
Date Posted: Aug  02, 2019
Regulatory disclosure requirements induce market discipline and facilitate efficient allocation of resources by increasing firm transparency. However, disclosure also increases the visibility of regulatory actions, which influences the behavior of regulators. We study the effect of disclosure on regulators' incentives by using the setting of the 1989 Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which required bank regulators to disclose enforcement actions publicly. Using a novel sample of enforcement actions in the non-disclosure regime, we find that regulators' incentives change after the introduction of the Act. In the disclosure regime, regulators are more likely to issue enforcement actions as well as to rely on publicly observable signals to issue enforcement orders, suggesting a response to the increased public scrutiny of their actions. We also find that disclosure leads to a decline in deposits and improves banks’ capital ratios and asset quality. ...

REVISION: Repatriation Taxes and Foreign Cash Holdings: The Impact of Anticipated Tax Reform
Date Posted: Dec  07, 2018
We examine whether an anticipated reduction in future repatriation taxes affects the amount of cash U.S. multinationals hold overseas. We find that the expected benefits of a repatriation tax reduction are positively associated with accelerated accumulations of global cash holdings once Congress proposed legislation. Additional tests examining domestic and foreign corporations, voluntary disclosures of foreign cash, and corporate payout behavior support our conclusion that observed increases in excess global cash are driven by changes in foreign cash. We also document that U.S. multinationals accumulating excess cash engage in complementary organizational and financial reporting activities designed to maximize expected tax benefits.

REVISION: Threat of Entry and the Use of Discretion in Banks' Financial Reporting
Date Posted: Jul  12, 2018
This paper studies managers' use of accounting discretion to deter entry. Using state-level changes in branching regulation under the Interstate Banking and Branching Efficiency Act, I find geographically-constrained community banks increased their loan loss provisions to appear less profitable when faced with the threat of entry by competitors. Additional tests rule out alternative explanations that firm economics or regulators drove the increase. I complement my analyses with survey-based evidence. Findings from the survey confirm that banks prefer to locate in markets where incumbents have high profitability and low credit losses, and that banks use competitors' financial statements to analyze competition.


Additional Information