On the afternoon of October 16, the Department of Accounting of the College of Business and Management hosted a Tamkang Clement and Carrie Chair Lecture at the Hsu Shou-Chlien International Conference Center, inviting Prof. Katherine Schipper, Thomas Keller Professor of Business Administration at Duke University’s Fuqua School of Business, to deliver a lecture titled “What Do We Know about Materiality?” She explored the pivotal role of materiality in financial reporting and assurance processes, providing an in-depth analysis of its dual functions, empirical findings, and the extended challenges of ESG reporting.
Prof. Schipper began by emphasizing that “materiality” is the core concept in financial statement and audit and assurance, influencing not only the disclosure of accounting figures but also the decisions made by businesses and investors. She explained that materiality assessment is not merely a legal requirement but a professional judgment with real-world implications, serving both inclusion and exclusion purposes — the former ensures that information significant to investment decisions is disclosed. At the same time, the latter prevents trivial details from misleading stakeholders.
Citing multiple empirical studies, Prof. Schipper highlighted the far-reaching impact of materiality judgments in auditing practice. Even minor restatements of financial reports can trigger market reactions, she noted, revealing that so-called “immaterial errors” often carry warning signals related to financial misstatements and governance issues. She advocated for a risk-based allocation of audit resources, with greater attention and procedures devoted to high-risk areas to safeguard the quality of financial statements and the credibility of information.
Extending her discussion to sustainability reporting, Prof. Schipper explained that with the implementation of IFRS S1 and the EU’s ESRS, the concept of materiality has evolved from a purely financial perspective into “double materiality.” This broader framework requires assessing both the economic impact of external environmental and social factors on a company and the substantive impact of the company’s activities on society and the environment. Unlike traditional financial statements, sustainability information lacks consistent measurement and verification standards, making materiality assessments more complex. She cautioned that before applying financial reporting methods to sustainability disclosures, standard setters and assurance providers must clearly define the scope and methodology.
In conclusion, Prof. Schipper described materiality as both a key decision-making tool and a sensitive diagnostic indicator. When applied prudently and transparently, it enhances the informational value and reliability of financial reports. However, when used mechanically or too loosely, it can obscure emerging risks in finance and governance, ultimately undermining market trust.
During the Q&A session, discussions centered on sustainability reporting, artificial intelligence, and ESG ratings. Prof. Schipper observed that with global adoption of standards such as ISSB and ESRS, the world is now entering an “experimental phase.” The main challenge lies in defining the boundaries of “materiality” and “impact,” which depend on clearly identifying stakeholders and their associated responsibilities and costs. Regarding AI, she acknowledged its potential to accelerate financial analysis and audit procedures, while warning that human bias and control risks remain, particularly issues of management override of internal controls. Regarding ESG ratings, she expressed skepticism about the reliability of commercial rating agencies, suggesting that academic research offers more objective evidence, while acknowledging that gaps still exist between “sustainability actions” and “reported content.”
Earlier that morning, at 11:00 and 11:30 a.m., Prof. Schipper, accompanied by Dean Li-JenYang, Department Chair Yu-Shan Chang, Prof. Ku-Jun Lin, and Asst. Prof. Tien-Wei Hwang visited President Huan-Chao Keh and Chairperson Flora Chia-I Chang, respectively, and toured the University History Gallery to learn about Tamkang University’s heritage and cultural development.
Respectively, President Keh and Chairperson Chang warmly welcomed Prof. Schipper and introduced the origins of the Tamkang Clement and Carrie Chair Lecture Series. They also shared Tamkang’s initiatives in integrating AI and SDGs into teaching and administration — helping faculty incorporate AI into their courses to enhance learning effectiveness, nurturing interdisciplinary talents in AI and sustainability, and encouraging the use of AI to improve administrative efficiency. They further exchanged views with Prof. Schipper on the lecture’s themes and on cultivating students’ international perspectives.
Prof. Schipper expressed her honor in being invited as a Tamkang Clement and Carrie Chair and carefully kept the lecture’s brochure to share with colleagues upon her return. A lover of Chinese culture, she also toured Taiwan’s North Coast, finding the Juming Museum especially impressive for its artistic expression and curatorial presentation. An avid tea drinker, she greatly appreciated the university’s tea gift set. As a token of gratitude, President Keh presented her with the Panda trophy. At the same time, Chairperson Chang gifted her a vase featuring calligraphy by artists Chi-Mao Li and Ben-Hang Chang, along with a depiction of Tamkang’s campus scenery and lyrics from her alma mater, as a lasting memento.
