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Changes in Questionable Behaviors During Major Disruptions

Posted on by Institute for Business Analytics

This paper is co-authored by Chewei Liu, Hillol Bala, Arun Rai (Georgia State University), and Akshat Lakhiwal (University of Georgia).

In March 2020, educators and students in the U.S. witnessed an abrupt, disruptive transition: the move to an online-only mode due to the COVID-19 pandemic. People may seek resources to gain relief from stressors, including this one, through questionable behaviors, which the authors of this study define as behaviors that, unlike outright delinquency or illegal actions, skirt the boundary between ethical and unethical behavior, violate normative structures, and threaten the overall well-being of society.

The authors focus on changes in questionable behaviors with novel technologies powered by artificial intelligence (AI) algorithms, which can make it more difficult to detect questionable behaviors and empower individuals to engage in these questionable behaviors during major disruptions. They explore the rise in questionable behaviors online during the COVID-19 pandemic, as well as the need for immediate attention by researchers, educational institutions, platforms, and policy makers due to this unintended rise in agency that novel AI-enabled technologies have over questionable behaviors.

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A Board’s Eye View on ESG

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This article summarizes a presentation at IBA’s Fall 2022 Forum on Accounting and Finance Analytics: Perspectives on ESG Reporting given by Harry M. Kraemer, a Clinical Professor of Management & Organizations at Northwestern’s Kellogg School of Management and a Executive Partner at Madison Dearborn. 

As the world continues to evolve, businesses are realizing that they need to incorporate ESG considerations into their operations. This trend is causing boards of directors to adapt their strategies and consider the impact of ESG on their organizations. Harry Kraemer, a board member for nearly twenty organizations, shared his insights on ESG with students, faculty, and IBA members at a Forum on Accounting and Finance. 

Kraemer emphasized that ESG is not a passing trend but is becoming increasingly important for companies to consider. He believes that ESG is shaping better business practices as companies become more aware of their environmental footprint, social impact, and governance obligations. Kraemer also pointed out that boards of directors are shifting their focus from shareholder value to stakeholder value, considering anyone who is impacted by the company’s resources, products, or actions. 

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Harnessing the Power of NLP: Real-World Applications in Biomedicine and Pharmacy

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This article is based on a presentation at IBA’s Analytics Conference on Cybersecurity on November 11, 2022 given by Ergin Soysal, Senior Advisor – NLP, Eli Lilly & Company and Adjunct Assistant Professor at the University of Texas Health Science Center at Houston.

Natural Language Processing (NLP) is disrupting everything, according to Ergin Soysal: how businesses are made, how technologies are processed, how entities are extracted, and even what humans value and how they become successful.  

Soysal, a senior NLP Research Scientist at Eli Lilly and Company, has devoted his career to unlocking meaningful data from biomedical texts after experiencing obstacles in consuming existing biomedical information during his clinical practice as a Medical Doctor. In his presentation “Harnessing the Power of NLP” during the Spring 2023 Analytics Conference on NLP/NLG, Soysal explored real-world applications of NLP and National Language Generation (NLG) for the pharmaceutical industry, including how NLP can help analyze complex medical data — and some of the wider impacts of this technology on human nature and values.  

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The Security of Machine Learning: A Risk Management Perspective

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This article is based on a presentation at IBA’s Analytics Conference on Cybersecurity given by Hyrum Anderson, Distinguished Engineer at Robust Intelligence.

If you ask Dr. Hyrum Anderson, Artificial Intelligence (AI) is eating the world.  

AI capabilities are being adopted at a rapid pace. According to Anderson, Distinguished Engineer at the machine learning integrity platform company Robust Intelligence, a recent survey by McKinsey of over 2000 executives showed that nearly half had adopted AI in at least one function within their organization.  This may be an indication that companies are delivering on their AI ambitions: an earlier analysis of earnings reports by CB Insights showed 200+ mentions of AI in earnings calls.  

“We’re seeing a near doubling in revenue from machine learning software every 18-24 months,” Anderson said. “If you do the math, that’s a six-times increase in five years. The growth in the market for AI may only be outpaced by its hype factor.”  

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Natural Language Processing: Reading Emails and Contracts

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This article is based on a presentation at IBA’s Spring 2023 Conference on NLP/NLG given by Scott Curtis, VP of Service Delivery at Deloitte Consulting. 

Imagine this: VAP Semiconductor Corporation, a fictitious organization, receives questions about potential financial improprieties and irregularities in their bank reporting by some of their employees. An expert in electronic discovery is hired to investigate the claims and is given three data sets: five years of emails from 25 specific employees, five years of text message conversations between employees, and five Terabytes (TB) of documents and spreadsheets from file servers.  

There’s more data in those sets than you might initially think, pointed out Scott Curtis, Vice President of Service Delivery at Deloitte Consulting. An email message could have someone BCC’d and have a number of individuals CC’d, a user could reply to the message and take someone else off the email thread, and then there could be even further messages between two users beyond that. In a population like this, there are probably around half a million records of emails for five years across 25 employees, Curtis said, plus an unexpectedly wide breadth of data in the text messages and documents.   

How might the expert analyze all of this collected data?  

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Tax Avoidance and Firm Risk: Insights Gained from a Latent Class Mixture Model

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This article features the work of Sonja O. Rego, the Chairperson and Professor of Accounting and the KPMG Professor at the Kelley School of Business. 

There are numerous benefits of corporate tax avoidance, including generating cash tax savings and providing financial reporting benefits. However, tax avoidance can also impose significant costs on firms, including the costs of implementing tax strategies and future costs if the firm is audited by the IRS or other tax authorities.  

As legislators and tax authorities increasingly scrutinize corporate tax practices, the relationship between tax avoidance and firm risk becomes increasingly important. This relationship is even more important given the significance of income tax expense for a firm’s after-tax profits.  

As prior research has not provided direct evidence on the relationship between tax avoidance and idiosyncratic risk, this study offers a framework for documenting the types of firms where tax avoidance is positively, negatively, or not associated with both priced risk and idiosyncratic risk. The authors also offer evidence on the relative prevalence of each relationship.  

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