Professor of Accounting and Department Chair
In 2009, Gupta won several awards (including the Zimmerman Best Paper Award) for his research work with Anne Anderson on examining whether corporate governance impacts a firm’s financial and market performance. The paper studied 1736 unique firms from 22 different countries to conclude that a company’s performance is enhanced when its corporate governance structure embodies the needs and demands of the host country’s financial structure and legal system. The findings of this research also suggested that firms operating in countries characterized by a market-based financial structure and common-law based legal regime tend to outperform the firms operating in bank-dominated financial systems and civil-law countries. Currently, he is working on another research paper, with Anne Anderson and Andre Zagorchev, further exploring the same research question with a different set of variables.
Gupta says this line of research is going to be very important in the years to come, particularly due to the recent financial and economic crisis related tension between corporations and the public interest groups over the call to reduce regulation. “The corporations are a dominating force in our society. They are a legal and an economic institution and therefore must be appropriately governed,” Gupta says. “Current recession which is the fallout from the 2008 financial crisis begs the question “Is Corporate America appropriately governed? If not, what more can be done?” Both, the public and the policy makers are debating a variety of reform and regulatory proposals. This line of research by Gupta and his colleagues could provide some answers that would help policy-makers balance competing objectives of investor-protection and capital formation.
Gupta is considered an expert on corporate governance, risk management and internal control disclosures under the Sarbanes-Oxley Act of 2002. His course Governance, Risk and Control, which is available in both the Accounting and MBA programs, won the Innovation in Accounting Education Award in 2005. . Gupta says this course is continuously changing and is constantly being up-dated to incorporate emerging governance, risk and control issues faced by the American businesses.
In drawing upon his work as an Academic Accounting Fellow with the U.S. Securities & Exchange Commission, Gupta is currently working on a paper with Lynn Turner, former chief accountant of the SEC, and Thomas Weirich, another SEC Academic Accounting Fellow. In this paper by reconstructing the history around the politics of public reporting on internal control, he and his colleagues respond to the criticism that these regulatory requirements were a “knee-jerk” reaction by the U.S. Congress prompted by the Enron and WorldCom frauds. Gupta has also teamed up with accounting professor Sami Heibatollah to research whether the public reporting on internal control effectiveness reduces information asymmetry in the U.S. capital markets to the benefit of investors.