Challenging the predictive ability of accounting techniques in modelling organizational futures

This article considers the role of accounting in organisational decision making. It challenges the rational nature of decisions made in organisations through the use of accounting models and the problems of predicting the future through the use of such models. The use of accounting in this manner is evaluated from an epochal postmodern stance. Issues raised by chaos theory and the uncertainty principle are used to demonstrate problems with the predictive ability of accounting models. The authors argue that any consideration of the predictive value of accounting needs to change to incorporate a recognition of the turbulent external environment, if it is to be of use for organisational decision making. Thus it is argued that the role of accounting as a mechanism for knowledge creation regarding the future is fundamentally flawed. We take this as a starting-point to argue for the real purpose of the use of the predictive techniques of accounting, using its ritualistic role in the context of myth creation to argue for the cultural benefits of the use of such flawed techniques.

SAS macros for point and interval estimation of area under the receiver operating characteristic curve for non-proportional and proportional hazards Weibull models

Aims and objectives  For prediction of risk of cardiovascular end points using survival models the proportional hazards assumption is often not met. Thus, non-proportional hazards models are more appropriate for developing risk prediction equations in such situations. However, computer program for evaluating the prediction performance of such models has been rarely addressed. We therefore developed SAS macro programs for evaluating the discriminative ability of a non-proportional hazards Weibull model developed by Anderson (1991) and that of a proportional hazards Weibull model using the area under receiver operating characteristic (ROC) curve.

Method  Two SAS macro programs for non-proportional hazards Weibull model using Proc NLIN and Proc NLP respectively and model validation using area under ROC curve (with its confidence limits) were written with SAS IML language. A similar SAS macro for proportional hazards Weibull model was also written.

Results  The computer program was applied to data on coronary heart disease incidence for a Framingham population cohort. The five risk factors considered were current smoking, age, blood pressure, cholesterol and obesity. The predictive ability of the non-proportional hazard Weibull model was slightly higher than that of its proportional hazard counterpart. An advantage of SAS Proc NLP in terms of the example provided here is that it provides significance level for the parameter estimates whereas Proc NLIN does not.

Conclusion  The program is very useful for evaluating the predictive performance of non-proportional and proportional hazards Weibull models.

Relative accuracy and predictive ability of direct valuation methods, price to aggregate earnings method and a hybrid approach

In this paper, we assess the relative performance of the direct valuation method and industry multiplier models using 41 435 firm-quarter Value Line observations over an 11 year (1990–2000) period. Results from both pricingerror and return-prediction analyses indicate that direct valuation yields lower percentage pricing errors and greater return prediction ability than the forward price to aggregated forecasted earnings multiplier model. However, a simple hybrid combination of these two methods leads to more accurate intrinsic value estimates, compared to either method used in isolation. It would appear that fundamental analysis could benefit from using one approach as a check on the other.

Applications of the behavioural homogeneity evaluation framework: the predictive ability of consumer involvement for international food market segmentation

This article proposes a framework of alternative international marketing strategies, based on the evaluation of intra- and inter-cultural behavioural homogeneity for market segmentation. The framework developed in this study provides a generic structure to behavioural homogeneity, proposing consumer involvement as a construct with unique predictive ability for international marketing strategy decisions. A model-based segmentation process, using structural equation models, is implemented to illustrate the application of the framework.

Predictive ability of Genomic Estimated Family Values (GEFV).

Genomic selection (GS) has been used to compute genomic estimated breeding values (GEBV) of individuals; however, it has only been applied to animal and major plant crops due to high costs. Besides, breeding and selection is performed at the family level in some crops. We aimed to study the implementation of genome-wide family selection (GWFS) in two loblolly pine (Pinus taeda L.) populations: i) the breeding population CCLONES composed of 63 families (5-20 individuals per family), phenotyped for four traits (stem diameter, stem rust susceptibility, tree stiffness and lignin content) and genotyped using an Illumina Infinium assay with 4740 polymorphic SNPs, and ii) a simulated population that reproduced the same pedigree as CCLONES, 5000 polymorphic loci and two traits (oligogenic and polygenic). In both populations, phenotypic and genotypic data was pooled at the family level in silico. Phenotypes were averaged across replicates for all the individuals and allele frequency was computed for each SNP. Marker effects were estimated at the individual (GEBV) and family (GEFV) levels with Bayes-B using the package BGLR in R and models were validated using 10-fold cross validations. Predicted ability, computed by correlating phenotypes with GEBV and GEFV, was always higher for GEFV in both populations, even after standardizing GEFV predictions to be comparable to GEBV. Results revealed great potential for using GWFS in breeding programs that select families, such as most outbreeding forage species. A significant drop in genotyping costs as one sample per family is needed would allow the application of GWFS in minor crops.

The effect of data sources and quality on the predictive capacity of CLIMEX models: an assessment of Teleonemia scrupulosa and Octotoma scabripennis for the biocontrol of Lantana camara in Australia

Understanding the effects of different types and quality of data on bioclimatic modeling predictions is vital to ascertaining the value of existing models, and to improving future models. Bioclimatic models were constructed using the CLIMEX program, using different data types – seasonal dynamics, geographic (overseas) distribution, and a combination of the two – for two biological control agents for the major weed Lantana camara L. in Australia. The models for one agent, Teleonemia scrupulosa Stål (Hemiptera:Tingidae) were based on a higher quality and quantity of data than the models for the other agent, Octotoma scabripennis Guérin-Méneville (Coleoptera: Chrysomelidae). Predictions of the geographic distribution for Australia showed that T. scrupulosa models exhibited greater accuracy with a progressive improvement from seasonal dynamics data, to the model based on overseas distribution, and finally the model combining the two data types. In contrast, O. scabripennis models were of low accuracy, and showed no clear trends across the various model types. These case studies demonstrate the importance of high quality data for developing models, and of supplementing distributional data with species seasonal dynamics data wherever possible. Seasonal dynamics data allows the modeller to focus on the species response to climatic trends, while distributional data enables easier fitting of stress parameters by restricting the species envelope to the described distribution. It is apparent that CLIMEX models based on low quality seasonal dynamics data, together with a small quantity of distributional data, are of minimal value in predicting the spatial extent of species distribution.

The usefulness of fair values in improving the predictive ability of earnings: Evidence from international banks

One of the objectives of general-purpose financial reporting is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. The current focus on potentially increased relevance of fair value accounting weighed against issues of reliability has failed to consider the potential impact on the predictive ability of accounting. Based on a sample of international (non-U.S.) banks from 24 countries during 2009-2012, we test the usefulness of fair values in improving the predictive ability of earnings. First, we find that the increasing use of fair values on balance-sheet financial instruments enhances the ability of current earnings to predict future earnings and cash flows. Second, we provide evidence that the fair value hierarchy classification choices affect the ability of earnings to predict future cash flows and future earnings. More precisely, we find that the non-discretionary fair value component (Level 1 assets) improves the predictability of current earnings whereas the discretionary fair value components (Level 2 and Level 3 assets) weaken the predictive power of earnings. Third, we find a consistent and strong association between factors reflecting country-wide institutional structures and predictive power of fair values based on discretionary measurement inputs (Level 2 and Level 3 assets and liabilities). Our study is timely and relevant. The findings have important implications for standard setters and contribute to the debate on the use of fair value accounting.

The ability of CMIP5 models to simulate North Atlantic extratropical cyclones

The ability of the climate models participating in phase 5 of the Coupled Model Intercomparison Project (CMIP5) to simulate North Atlantic extratropical cyclones in winter [December–February (DJF)] and summer [June–August (JJA)] is investigated in detail. Cyclones are identified as maxima in T42 vorticity at 850 hPa and their propagation is tracked using an objective feature-tracking algorithm. By comparing the historical CMIP5 simulations (1976–2005) and the ECMWF Interim Re-Analysis (ERA-Interim; 1979–2008), the authors find that systematic biases affect the number and intensity of North Atlantic cyclones in CMIP5 models. In DJF, the North Atlantic storm track tends to be either too zonal or displaced southward, thus leading to too few and weak cyclones over the Norwegian Sea and too many cyclones in central Europe. In JJA, the position of the North Atlantic storm track is generally well captured but some CMIP5 models underestimate the total number of cyclones. The dynamical intensity of cyclones, as measured by either T42 vorticity at 850 hPa or mean sea level pressure, is too weak in both DJF and JJA. The intensity bias has a hemispheric character, and it cannot be simply attributed to the representation of the North Atlantic large- scale atmospheric state. Despite these biases, the representation of Northern Hemisphere (NH) storm tracks has improved since CMIP3 and some CMIP5 models are able of representing well both the number and the intensity of North Atlantic cyclones. In particular, some of the higher-atmospheric-resolution models tend to have a better representation of the tilt of the North Atlantic storm track and of the intensity of cyclones in DJF.

Investigating the predictive ability of gait speed and quadriceps strength for incident falls in community-dwelling older women at high risk of fracture

Gait speed is a recommended geriatric assessment of physical performance, but may not be regularly examined in clinical settings. We aimed to investigate whether quadriceps strength tests demonstrate similar predictive ability for incident falls as gait speed in older women. We investigated 135 female volunteers aged mean±SD 76.7±5.0 years (range 70-92) at high risk of fracture. Participants completed gait speed assessments using the GAITRite Electronic Walkway System, and quadriceps strength assessments using a hand-held dynamometer (HHD). Participants reported incident falls monthly for 3.7±1.2 years. N=99 (73%) participants fell 355 times during the follow-up period (mean fall rate 83 per 100 person years). We observed a reduced odds ratio for multiple falls (0.83, 95% CI 0.70-0.98) and a reduced hazard ratio for time to first fall (0.90, 95% CI 0.83-0.98), according to quadriceps strength. There was also a significantly shorter time to first fall for those with low quadriceps strength (<7.0 kg; lowest tertile) compared with those with normal quadriceps strength (estimated means [95% CI] 1.54 [1.02, 2.06] vs. 2.23 [1.82, 2.64] years; P=0.019), but not for those with low (<1.0 m/s) vs. normal gait speed (P=0.15). Quadriceps strength is a significant predictor of incident falls over three years amongst community-dwelling older women at high risk of fracture. Quadriceps strength tests may be an acceptable alternative to gait speed for geriatric assessments of falls risk.

Predictive Ability of NGAL as a Marker of Renal Damage: evaluation of Multiple Clinical Settings

Introduction. Neutrophil Gelatinase-Associated Lipocalin (NGAL) belongs to the family of lipocalins and it is produced by several cell types, including renal tubular epithelium. In the kidney its production increases during acute damage and this is reflected by the increase in serum and urine levels. In animal studies and clinical trials, NGAL was found to be a sensitive and specific indicator of acute kidney injury (AKI). Purpose. The aim of this work was to investigate, in a prospective manner, whether urine NGAL can be used as a marker in preeclampsia, kidney transplantation, VLBI and diabetic nephropathy. Materials and methods. The study involved 44 consecutive patients who received renal transplantation; 18 women affected by preeclampsia (PE); a total of 55 infants weighing ≤1500 g and 80 patients with Type 1 diabetes. Results. A positive correlation was found between urinary NGAL and 24 hours proteinuria within the PE group. The detection of higher uNGAL values in case of severe PE, even in absence of statistical significance, confirms that these women suffer from an initial renal damage. In our population of VLBW infants, we found a positive correlation of uNGAL values at birth with differences in sCreat and eGFR values from birth to day 21, but no correlation was found between uNGAL values at birth and sCreat and eGFR at day 7. systolic an diastolic blood pressure decreased with increasing levels of uNGAL. The patients with uNGAL <25 ng/ml had significantly higher levels of systolic blood pressure compared with the patients with uNGAL >50 ng/ml ( p<0.005). Our results indicate the ability of NGAL to predict the delay in functional recovery of the graft. Conclusions. In acute renal pathology, urinary NGAL confirms to be a valuable predictive marker of the progress and status of acute injury.

Predictive ability of a modified Örebro Musculoskeletal Pain Questionnaire in an acute/subacute low back pain working population

The original 'Örebro Musculoskeletal Pain Questionnaire' (original-ÖMPQ) has been shown to have limitations in practicality, factor structure, face and content validity. This study addressed these concerns by modifying its content producing the 'Örebro Musculoskeletal Screening Questionnaire' (ÖMSQ). The ÖMSQ and original-ÖMPQ were tested concurrently in acute/subacute low back pain working populations (pilot n = 44, main n = 106). The ÖMSQ showed improved face and content validity, which broadened potential application, and improved practicality with two-thirds less missing responses. High reliability (0.975, p < 0.05, ICC: 2.1), criterion validity (Spearman's r = 0.97) and internal consistency (α = 0.84) were achieved, as were predictive ability cut-off scores from ROC curves (112-120 ÖMSQ-points), statistically different ÖMSQ scores (p < 0.001) for each outcome trait, and a strong correlation with recovery time (Spearman's, r = 0.71). The six-component factor structure reflected the constructs originally proposed. The ÖMSQ can be substituted for the original-ÖMPQ in this population. Further research will assess its applicability in broader populations.

Validation and refinement of survival models for liver retransplantation

Orthotopic liver retransplantation (re-OLT) is highly controversial. The objectives of this study were to determine the validity of a recently developed United Network for Organ Sharing (UNOS) multivariate model using an independent cohort of patients undergoing re-OLT outside the United States, to determine whether incorporation of other variables that were incomplete in the UNOS registry would provide additional prognostic information, to develop new models combining data sets from both cohorts, and to evaluate the validity of the model for end-stage liver disease (MELD) in patients undergoing re-OLT. Two hundred eighty-one adult patients undergoing re-OLT (between 1986 and 1999) at 6 foreign transplant centers comprised the validation cohort. We found good agreement between actual survival and predicted survival in the validation cohort; 1-year patient survival rates in the low-, intermediate-, and high-risk groups (as assigned by the original UNOS model) were 72%, 68%, and 36%, respectively (P < .0001). In the patients for whom the international normalized ratio (INR) of prothrombin time was available, MELD correlated with outcome following re-OLT; the median MELD scores for patients surviving at least 90 days compared with those dying within 90 days were 20.75 versus 25.9, respectively (P = .004). Utilizing both patient cohorts (n = 979), a new model, based on recipient age, total serum bilirubin, creatinine, and interval to re-OLT, was constructed (whole model χ(2) = 105, P < .0001). Using the c-statistic with 30-day, 90-day, 1-year, and 3-year mortality as the end points, the area under the receiver operating characteristic (ROC) curves for 4 different models were compared. In conclusion, prospective validation and use of these models as adjuncts to clinical decision making in the management of patients being considered for re-OLT are warranted.

The predictive ability of clinical tests for contact lens induced dry eye

Approximately half of current contact lens wearers suffer from dryness and discomfort, particularly towards the end of the day. Contact lens practitioners have a number of dry eye tests available to help them to predict which of their patients may be at risk of contact lens drop out and advise them accordingly. This thesis set out to rationalize them to see if any are of more diagnostic significance than others. This doctorate has found: (1) The Keratograph, a device which permits an automated, examiner independent technique for measuring non invasive tear break up time (NITBUT) measured NITBUT consistently shorter than measurements recorded with the Tearscope. When measuring central corneal curvature the spherical equivalent power of the cornea was measured as being significantly flatter than with a validated automated keratometer. (2) Non-invasive and invasive tear break-up times significantly correlated to each other, but not the other tear metrics. Symptomology, assessed using the OSDI questionnaire, correlated more with those tests indicating possible damage to the ocular surface (including LWE, LIPCOF and conjunctival staining) than with tests of either tear volume or stability. Cluster analysis showed some statistically significant groups of patients with different sign and symptom profiles. The largest cluster demonstrated poor tear quality with both non-invasive and invasive tests, low tear volume and more symptoms. (3) Care should be taken in fitting patients new to contact lenses if they have a NITBUT less than 10s or an OSDI comfort rating greater than 4.2 as they are more likely to drop-out within the first 6 months. Cluster analysis was not found to be beneficial in predicting which patients will succeed with lenses and which will not. A combination of the OSDI questionnaire and a NITBUT measurement was most useful both in diagnosing dry eye and in predicting contact lens drop out.

Survival models of community tenure and length of hospital stay for the seriously mentally ill : a 10-year perspective

Objective: To examine the effects of personal and community characteristics, specifically race and rurality, on lengths of state psychiatric hospital and community stays using maximum likelihood survival analysis with a special emphasis on change over a ten year period of time. Data Sources: We used the administrative data of the Virginia Department of Mental Health, Mental Retardation, and Substance Abuse Services (DMHMRSAS) from 1982-1991 and the Area Resources File (ARF). Given these two sources, we constructed a history file for each individual who entered the state psychiatric system over the ten year period. Histories included demographic, treatment, and community characteristics. Study Design: We used a longitudinal, population-based design with maximum likelihood estimation of survival models. We presented a random effects model with unobserved heterogeneity that was independent of observed covariates. The key dependent variables were lengths of inpatient stay and subsequent length of community stay. Explanatory variables measured personal, diagnostic, and community characteristics, as well as controls for calendar time. Data Collection: This study used secondary, administrative, and health planning data. Principal Findings: African-American clients leave the community more quickly than whites. After controlling for other characteristics, however, race does not affect hospital length of stay. Rurality does not affect length of community stays once other personal and community characteristics are controlled for. However, people from rural areas have longer hospital stays even after controlling for personal and community characteristics. The effects of time are significantly smaller than expected. Diagnostic composition effects and a decrease in the rate of first inpatient admissions explain part of this reduced impact of time. We also find strong evidence for the existence of unobserved heterogeneity in both types of stays and adjust for this in our final models. Conclusions: Our results show that information on client characteristics available from inpatient stay records is useful in predicting not only the length of inpatient stay but also the length of the subsequent community stay. This information can be used to target increased discharge planning for those at risk of more rapid readmission to inpatient care. Correlation across observed and unobserved factors affecting length of stay has significant effects on the measurement of relationships between individual factors and lengths of stay. Thus, it is important to control for both observed and unobserved factors in estimation.