Employee Profile

Luciana Orozco

Associate Professor - Department of Accounting and Operations Management

Luciana Orozco

Biography

Luciana is an Assistant Professor of Accounting at the Department of Accounting and Operations Management at BI Norwegian Business School. Luciana has a Ph.D. in Business and Finance (specializing in accounting) from Universidad Carlos III de Madrid, Spain.

Luciana's research interests include bank accounting, financial reporting quality, and auditing. She currently teaches a course in Research Methodology in Accounting and Business Control.

For more information, please see my personal homepage.

Publications

Bleibtreu, Christopher; Erinc, Mert, Orozco, Luciana & Shi, Zhenyang (2024)

Auditors and client investment efficiency: a quasi-replication and further insights from a regulatory change

Doi: https://doi.org/10.1007/s11573-024-01198-4 - Full text in research archive

This study is a quasi-replication and extension of Bae et al. (Account Rev 92(2):19– 40, 2017), which examines the relationship between auditors’ characteristics and their audit clients’ investment efficiency. Whereas Bae et al. (Account Rev 92(2):19–40, 2017) use U.S. public firm data, we draw a more general picture by using both public and private firm data from Norway. Overall, the results for Norwegian public and private firms are in line with those Bae et al. (Account Rev 92(2):19–40, 2017) find for public U.S. firms. That is, audit clients invest more efficiently if their auditors have more knowledge and resources, measured by auditor market shares or whether a Big N audit firm performs the audit. Further, an auditor’s influence on its client’s investment efficiency is more pronounced when clients have a higher demand for information, proxied by client complexity. Finally, exploiting a regulatory change in 2011 that allowed small private Norwegian firms to opt out of previously mandatory auditing, we extend the study by Bae et al. (Account Rev 92(2):19–40, 2017). We find that audits can increase investment efficiency for small private firms. Specifically, firms that dismiss their auditors tend to overinvest more than similar firms that are not eligible to opt out of auditing. Further, firms that voluntarily keep their auditor have an overall higher investment efficiency than similar firms that are not audited.

Orozco, Luciana & Rubio, Silvina (2024)

Regulatory Capital Management to Exceed Thresholds

Doi: https://doi.org/10.1111/jmcb.13230 - Full text in research archive

We investigate whether a carrot approach, which provides benefits for regulatory compliance rather than penalties for noncompliance, incentivizes banks to reach capital levels above the minimum requirements. We document a significant discontinuity at the 10% regulatory capital threshold, where banks receive benefits for exceeding it. Banks exceed it to pay lower deposit insurance fees, access brokered deposits, and expanded financial activities. Banks often rely on equity to reach this threshold while using accounting discretion primarily when facing small capital shortfalls. Our findings suggest the carrot approach can effectively increase banks' capital positions. However, we find that using accounting discretion to exceed the threshold hurts bank stability.

Academic Degrees
Year Academic Department Degree
2020 Universidad Carlos III de Madrid, Spain PhD

BI Business Review articles: