Jenny Zha Giedt
Assistant Professor of Accounting
George Washington University
School of Business
Washington, DC


Research Interests
  • Potential changes in corporate control; the preliminary sale process in mergers & acquisitions
  • Financial accounting and reporting quality, which includes accruals quality and disclosure choice

Working Papers
[7] Nezlobin, A., R. Sloan, and J. Zha Giedt. (2019) "Measuring Accruals Quality: A Theoretical and Empircal Evaluation." Link
Motivation: This study provides a theoretical and empirical assessment of the most commonly-used measures of accruals quality, or earnings quality. We show, theoretically and empirically, how the candidate measures are associated with underlying economic parameters of a firm, which then contaminates the researcher's ability to cleanly observe accruals quality. The Differential Persistence measure appears to be the least misspecified candidate, and simulations confirm this. There are several practical takeaways for empirical researchers. First, when choosing which accrual quality proxies to use in their main tests and robustness checks, researchers should not choose proxies that are similarly misspecified. Second, researchers should use total operating accruals, which results in more powerful accrual quality measures than using working capital accruals. Third, researchers should take caution when interpreting the sign of various measures to mean greater vs. lower quality.
[6] Zha Giedt, J. (2018) "Determinants of Companies For Sale: Target Motives versus Bidders' Selection of Targets in M&A." Link
Motivation: Prior papers explain why certain firms become targets by comparing ex-post target firms to non-target firms. However, due to the samples used, those papers cannot disentangle target motives from the traits selected for by bidders. This study uses an intermediate sample of firms that are evaluating strategic alternatives to distinguish two selection processes: (1) underperforming, low-q firms self-select to become poential targets and (2) the relatively better performing, higher-q firms are chosen by bidders. This study provides evidence for the bankruptcy avoidance hypothesis and suggests a unique interpretation of the inefficient target hypoethesis (or q-theory): acquirers are not targeting the poorly performing firms; rather, the poor-performing firms are putting themselves up for sale. Furthermore, this study compares firms that voluntarily disclose their strategic alternatives with firms that experience a media leak, to uncover differences in the firms whose information is disseminated via these alternative information channels.
[5] Zha Giedt, J. (2018) "Economic Consequences of Announcing Strategic Alternatives." Link
Motivation: Little is known about the consequences of publicly revealing that a company is exploring strategic alternatives, yet managers and directors face this disruptive disclosure decision when their company seeks to sell itself in the M&A market. At first glance, the average announcement return of 6% suggests that this voluntary disclosure increases shareholder value. However, the eventual success or failure of the firm's attempt to sell itself allows me to identify the costs and benefits associated with disclosure: a valuation premium is only captured if a sale is consumated. Otherwise, if a firm announces that it's seeking strategic alternatives but ultimately fails to sell itself, the announcement premium gradually reverses and the long-run abnormal returns are negative! Further tests examine some potential mechanisms of how the announcement may affect firm value: the announcement leads to raised investor attention, a greater number of bidders in the sale process, worse operating performance, and more departing employees.
Published Papers
[4] Larson, C. R., R. Sloan, and J. Zha Giedt. (2018) "Defining, Measuring and Modeling Accruals: A Guide for Researchers." Review of Accounting StudiesLink
Motivation: Measures of accruals and models of discretionary accruals are widely used in financial accounting research. Yet, empirical researchers are faced with many measures and models to choose from, where some of the commonly choosen ones are incomplete and fragmented. To guide researchers, this paper provides a comprehensive definition and meaure of accruals, and shows how some of the extant measures of accruals fit in as a component of "comprehensive accruals." For resesarchers interested in modeling non-discretionary accruals, this paper provides a more comprehensive model specification that takes into account the normal properties of accruals. Overall, we urge researchers to carefully consider which measure of accruals to use and how to model normal variation in accruals.
[3] Zha Giedt, J. (2018) "Modelling Receivables and Deferred Revenues to Detect Revenue Management." Abacus (Special Issue on Earnings Management). Link
Motivation: Researchers and regulators interested in detecting managerial discretion in revenue recognition may examine specific revenue-related accruals, specifically accounts receivables and deferred revenues. The proposed model exhibits greater power and less misspecification than alternative models and is intuitive. First, the origination of an accounts receivable accrual is explained by contemporaneous revenue, and the reversal is explained by future cash collections from customers. Second, the origination of a deferred revenue accrual is explained by contemporaneous cash collections from customers, and the reversal is explained by future recognized revenue. The resulting model essentially combines the relative strengths of Caylor's (2010) and Stubben's (2010) discretionary revenue models and adds cash collections from customers (called 'cash flow from sales' in the paper) as an explanatory variable.
ΔAccounts receivablet = α0 + α1*1/Avg assetst + α2*ΔRevenueQ123t + α3*ΔRevenueQ4t + α4*ΔCash flow from salest+1 + et
ΔDeferred revenuet = α0 + α1*1/Avg assetst + α2*ΔCash flow from salest + α3*ΔRevenuet+1 + et 
[2] Patatoukas, P. N., R. G. Sloan, and J. Zha. (2015) "On the Pricing of Mandatory DCF Disclosures: Evidence from Oil and Gas Royalty Trusts." The Accounting ReviewLink
Motivation: In the value-relevance literature, tests of the relation between an asset's value on the financial statments and the asset's market value are typically plagued by measurement issues, from imputing the asset's market value, and model misspecification issues, from imperfectly controlling for the company's other assets and liabilities. Oil and gas royalty trusts, however, provide a cleaner setting to conduct a value-relevance test because the primary assets of these trusts are mature oil and gas reserves, their other assets and liabilities are negligible, and the asset's estimated value is clearly disclosed in 10-Ks. We find that managerial DCF estimates of oil and gas reserves are priced by investors, yet investors may buoyantly overlook the finite nature of these reserves until media coverage prompts the stock price to coverge with the DCF estimate.
[1] Dechow, P. M., R. G. Sloan, and J. Zha. (2014) "Stock Prices and Earnings: A History of Research." Annual Review of Financial EconomicsLink
Motivation: The financial accounting and capital markets literature is storied and vast. This paper summarizes the main properties of earnings and its components, and how they are useful to investors and relate to stock prices. Select empirical findings in this area are extended to the present period, including price and volume reactions to accounting information, the value-relevance of various earnings measures, and portfolio returns to accounting-based trading strategies.

About Me
Jenny is an Assistant Professor at the George Washington University School of Business. Her research examines financial accounting and disclosure choices made by corporations and their effects on the stock market and the market for corporate control. She teaches Introduction to Financial Accounting in the undergraduate business core curriculum.
Jenny graduated with a PhD in Business Administration with an Accounting emphasis in 2016 from the Haas School of Business at UC Berkeley and is a Deloitte Foundation doctoral fellow. Her UC Berkeley dissertation explores why certain companies voluntarily announce that they are seeking strategic alternatives, and documents the costs and benefits associated with the announcement. Her dissertation is titled, "Voluntary Disclosure of Strategic Alternatives: A Cost-Benefit Analysis" (2016). Link
Prior to Berkeley, she worked as an auditor and forensic accountant at KPMG in Los Angeles, CA, and obtained her CPA. She also has experience in the mutual fund and hedge fund industries with US Bank and Dorchester Capital. She earned her Bachelor's degrees from the University of Southern California in Accounting and Business Administration (Finance emphasis).
In her spare time, Jenny enjoys snorkeling, ice skating, skiing, and yoga.