Audit fees and asset securitization risks

The thesis investigates “where were the auditors in asset securitizations”, a criticism of the audit profession before and after the onset of the global financial crisis (GFC). Asset securitizations increase audit complexity and audit risks, which are expected to increase audit fees. Using US bank holding company data from 2003 to 2009, this study examines the association between asset securitization risks and audit fees, and its changes during the global financial crisis. The main test is based on an ordinary least squares (OLS) model, which is adapted from the Fields et al. (2004) bank audit fee model. I employ a principal components analysis to address high correlations among asset securitization risks. Individual securitization risks are also separately tested. A suite of sensitivity tests indicate the results are robust. These include model alterations, sample variations, further controls in the tests, and correcting for the securitizer self-selection problem. A partial least squares (PLS) path modelling methodology is introduced as a separate test, which allows for high intercorrelations, self-selection correction, and sequential order hypotheses in one simultaneous model. The PLS results are consistent with the main results. The study finds significant and positive associations between securitization risks and audit fees. After the commencement of the global financial crisis in 2007, there was an increased focus on the role of audits on asset securitization risks resulting from bank failures; therefore I expect that auditors would become more sensitive to bank asset securitization risks after the commencement of the crisis. I find that auditors appear to focus on different aspects of asset securitization risks during the crisis and that auditors appear to charge a GFC premium for banks. Overall, the results support the view that auditors consider asset securitization risks and market changes, and adjust their audit effort and risk considerations accordingly.

Aligning off-balance sheet risk, on-balance sheet risk and audit fees: a PLS path modelling analysis

This study focuses on using the partial least squares (PLS) path modelling technique in archival auditing research by replicating the data and research questions from prior bank audit fee studies. PLS path modelling allows for inter-correlations among audit fee determinants by establishing latent constructs and multiple relationship paths in one simultaneous PLS path model. Endogeneity concerns about auditor choice can also be addressed with PLS path modelling. With a sample of US bank holding companies for the period 2003-2009, we examine the associations among on-balance sheet financial risks, off-balance sheet risks and audit fees, and also address the pervasive client size effect, and the effect of the self-selection of auditors. The results endorse the dominating effect of size on audit fees, both directly and indirectly via its impacts on other audit fee determinants. By simultaneously considering the self-selection of auditors, we still find audit fee premiums on Big N auditors, which is the second important factor on audit fee determination. On-balance-sheet financial risk measures in terms of capital adequacy, loan composition, earnings and asset quality performance have positive impacts on audit fees. After allowing for the positive influence of on-balance sheet financial risks and entity size on off-balance sheet risk, the off-balance sheet risk measure, SECRISK, is still positively associated with bank audit fees, both before and after the onset of the financial crisis. The consistent results from this study compared with prior literature provide supporting evidence and enhance confidence on the application of this new research technique in archival accounting studies.

Aligning off-balance sheet risk, on-balance sheet risk and audit fees: a PLS path modelling analysis

This study focuses on using the partial least squares (PLS) path modelling methodology in archival auditing research by replicating the data and research questions from prior bank audit fee studies. PLS path modelling allows for inter-correlations among audit fee determinants by establishing latent constructs and multiple relationship paths in one simultaneous PLS path model. Endogeneity concerns about auditor choice can also be addressed with PLS path modelling. With a sample of US bank holding companies for the period 2003-2009, we examine the associations among on-balance sheet financial risks, off-balance sheet risks and audit fees, and also address the pervasive client size effect, and the effect of the self-selection of auditors. The results endorse the dominating effect of size on audit fees, both directly and indirectly via its impacts on other audit fee determinants. By simultaneously considering the self-selection of auditors, we still find audit fee premiums on Big N auditors, which is the second important factor on audit fee determination. On-balance-sheet financial risk measures in terms of capital adequacy, loan composition, earnings and asset quality performance have positive impacts on audit fees. After allowing for the positive influence of on-balance sheet financial risks and entity size on off-balance sheet risk, the off-balance sheet risk measure, SECRISK, is still positively associated with bank audit fees, both before and after the onset of the financial crisis. The consistent results from this study compared with prior literature provide supporting evidence and enhance confidence on the application of this new research technique in archival accounting studies.

Bank audit fees and asset securitization risks

Using the lens of audit pricing, we provide insights into auditors’ behaviors in relation to the risk of asset securitizations to bank holding companies in a period encompassing the Global Financial Crisis (GFC) and the introduction of the accounting standards FAS 166 and FAS 167. Using US bank holding company data from 2003 to 2011, we find significant and positive associations between asset securitization risks and audit fees. We find that auditors appear to focus on different aspects of asset securitization risks after the onset of the GFC, and increase their attention to the systemic risks facing bank holding companies in general. After the implementation of FAS 166 and FAS 167, which removed the discretion to treat asset securitizations as sales and required the consolidation of the accounts of special purpose entities, asset securitization risks no longer have a significant effect on audit fees.

Audit reports in Australia 2005-2013 : preliminary analysis

This paper provides a preliminary summary of audit reports for Australian listed public companies for the period 2005 to 2013. This summary focuses on auditor reporting in the most recent period 2011 to 2013.

Green IT segment analysis : an academic literature review

Research on Green Information Technology (IT) is becoming a prevalent research theme in Green Information Systems (IS) research. This article provides a review of 98 papers published on Green IT between 2007−2013 to facilitate future research and to provide a retrospective analysis of existing knowledge and gaps thereof. While some researchers have discussed phenomena such as Green IT, motivation of Green IT and the Green IT adoption lifecycle, others have researched the importance of Green IT implementation within the organisational and individual level. Throughout the literature, scholars are trying to portray a constructive relationship between IT and the environment. Through our analysis, we can provide an assessment of the status of information systems literature on Green IT and, we provide taxonomy of segments of Green IT publications. Future research opportunities are identified based on the review.

Academic librarians' varying experiences of archives : a phenomenographic study

This article reports on a study investigating academic librarians' varying experiences of archives in order to promote understanding and communication among librarians and archivists. A qualitative, phenomenographic approach was adopted for the study. Three different ways of experiencing archives were identified from analysis of interviews. Archives may be experienced by academic librarians as 1) a place which protects collections; 2) resources to be used in accomplishing tasks such as teaching, research, or outreach; or 3) manifestations of politics. The third way of experiencing archives is the most complex, incorporating both the other experiences. The results of this study may help librarians, especially academic librarians, and archivists communicate more clearly on joint projects involving archival collections thereby enabling more collaboration.

Impact of child labor on academic performance : evidence from the program "Edúcame Primero Colombia"

In this study, the effects of different variables of child labor on academic performance are investigated. To this end, 3302 children participating in the child labor eradication program “Edúcame Primero Colombia” were interviewed. The interview format used for the children's enrollment into the program was a template from which socioeconomic conditions, academic performance, and child labor variables were evaluated. The academic performance factor was determined using the Analytic Hierarchy Process (AHP). The data were analyzed through a logistic regression model that took into account children who engaged in a type of labor (n = 921). The results showed that labor conditions, the number of weekly hours dedicated to work, and the presence of work scheduled in the morning negatively affected the academic performance of child laborers. These results show that the relationship between child labor and academic performance is based on the conflict between these two activities. These results do not indicate a linear and simple relationship associated with the recognition of the presence or absence of child labor. This study has implications for the formulation of policies, programs, and interventions for preventing, eradicating, and attenuating the negative effects of child labor on the social and educational development of children.

An intentional class design model to engage first year students with threshold concepts using the academic discourse theories of Vygotsky and Laurillard

In the context of the first-year university classroom, this paper develops Vygotsky’s claim that ‘the relations between the higher mental functions were at one time real relations between people’. By taking the main horizontal and hierarchical levels of classroom discourse and dialogue (student-student, student-teacher, teacher-teacher) and marrying these with the possibilities opened up by Laurillard’s conversational framework, we argue that the learning challenge of a ‘troublesome’ threshold concept might be met by a carefully designed sequence of teaching events and experiences for first year students, and we provide a number of strategies that exploit each level of these ‘hierarchies of discourse’. We suggest that an analytical approach to classroom design that embodies these levels of discourse in sequenced dialogic methods could be used by teachers as a strategy to interrogate and adjust teaching-in-practice especially in the first year of university study.

The role of goal importance in predicting university students’ high academic performance

We examined goal importance, focusing on high, but not exclusive priority goals, in the theory of planned behaviour (TPB) to predict students’ academic performance. At the beginning of semester, students in a psychology subject (N = 197) completed TPB and goal importance items for achieving a high grade. Regression analyses revealed partial support for the TPB. Perceived behavioural control, but not attitude or subjective norm, significantly predicted intention, with intention predicting final grade. Goal importance significantly predicted intention, but not final grade, indicating that perceiving a performance goal as highly, but not necessarily exclusively, important impacts on students’ achievement intentions.

Improving the outcomes of foot and ankle surgery through the audit cycle : a case study

The direct costs of managing adverse outcomes from Australian health care are estimated to be $2 billion. The audit cycle is considered an important tool to assist in the preventive management of adverse outcomes.Australian guidelines for audit cycle design allow for comparison of data sets derived from similar surgical specialities. However a lack of data set standardisation inhibits meaningful comparisons of foot and ankle surgical audits. This research will assist development of a best practice model for auditing foot and ankle surgery. Data derived from this model will improve the safety and quality of foot and ankle surgery. The preliminary phase of this process is to identify and understand the attitudes and behaviours of how and why surgeons participate in the audit cycle. A descriptive embedded multiple case study research design is planned to provide an intense focus on a single phenomenon (the audit cycle) within its real life context (clinical governance). The measures to be included in the case study have been identified by the Balanced Patient Safety Measurement Framework. These include: audit and peer review activity, provider attitudes to patient safety, safety learning, action and performance. A purposive sample of 6 to 8 surgeons (units of analysis) from 3 to 4 specialities (cases) will undergo semi-structured interview. This will investigate: current audit tools and processes; attitudes; and behaviours of surgeons to the audit cycle. Similarities in and differences between the units of analysis will indicate which identified measures function as barriers or enablers of the audit cycle. Reliability and validity (external and construct) will be assessed using established methods for case studies. The descriptive embedded multiple case study will reveal how and why foot and ankle surgeons participate in the audit cycle. This will inform further research to improve the outcomes of foot and ankle surgery through development of an audit tool.

Turnbull : generating undue expectations of the corporate governance role of audit committees

Following an initial consultation draft (Turnbull 1999a), the Internal control Working Party of the Institute of Chartered Accountants in England and Wales, chaired by Nigel Turnbull, executive director of Rank Group plc. has published Internal Control: Guidance for Directors of Listed companies Incorporated in the UK (Turnbull, 1999b). The guidance is commonly referred to as the Turnbull Report. This paper outlines the key recommendations of the report and discusses some of its implications, particularly in the context of the increasing emphasis on a broader corporate governance role for audit committees. The paper suggests that the increasing role envisaged of audit committees for example lately in the UK by Turnbull, may generate undue expectations are premised on an unsubstantiated notion of the contribution of audit committees.

Public policy on corporate audit committees : case study evidence of current practice

Corporate failures and malpractices have led to an increasing emphasis on the governance role of audit committees. The Smith report Audit Committee Combined Code Guidance and the Higgs Review of the Role and Effectiveness of Non-Executive Directors (now incorporated in a Revised Combined Code) represent further attempts to strengthen corporate accountability in the UK. Although the regulatory focus on audit committees indicates confidence in their role as part of the solution to governance failures, questions remain about their efficacy in practice. Against the background of the publication of the Smith report and the wider reliance on audit committees in several countries to help improve corporate accountability, this paper provides research evidence, drawn from an ACCA-sponsored project, on the processes and effects of the audit committees in three UK companies. This study complements other research on audit committees by adopting a case study approach, in order to reflect the importance of investigating audit committee operations from within the organisation and to develop a closer understanding of audit committee impact than is available from generally observable data. The empirical evidence for the case studies was obtained from semi-structured interviews with personnel involved in the audit committee process, internal documents made available by the companies, and publicly available information, including annual reports.

The corporate governance effects of audit committees

Arguments associated with the promotion of audit committees in many countries are premised on their potential for alleviating weaknesses in corporate governance. This paper provides a synthesis and evaluation of empirical research on the governance effects associated with audit committees. Given recent policy recommendations in several countries aimed at strengthening these committees, it is important to establish what research evidence demonstrates about their existing governance contribution. A framework for analyzing the impact of audit committees is described, identifying potential perceived effects which may have led to their adoption and documented effects on aspects of the audit function, on financial reporting quality and on corporate performance. It is argued that there is only limited and mixed evidence of effects to support claims and perceptions about the value of audit committees for these elements of governance. It is also shown that most of the existing research has focused on factors associated with audit committee existence, characteristics and measures of activity and there is very little evidence on the processes associated with the operation of audit committees and the manner in which they influence organizational behaviour. It is clear that there is no automatic relationship between the adoption of audit committee structures or characteristics and the achievement of particular governance effects, and caution may be needed over expectations that greater codification around factors such as audit committee members’ independence and expertise as the means of ‘‘correcting’’ past weaknesses in the arrangements for audit committees. The most fundamental question concerning what difference audit committees make in practice continues to be an important area for research development. For future research we suggest: (i) greater consideration of the organizational and institutional contexts in which audit committees operate; (ii) explicit theorization of the processes associated with audit committee operation; (iii) complementing extant research methods with field studie, and; (iv) investigation of unintended (behavioural) as well as expected consequences of audit committees.

Plagiarism 2.0 : the new economy of academic dishonesty

As a writer, teacher and scholar of ‘the knowledge economy’ in the broadest sense, plagiarism fascinates me. I first encountered plagiarism in my Year 12 English class. We had been working for weeks writing poems and had submitted them to our teacher Mr How for assessment. Mr How was generally a pleasant individual who I remember as one of my favourite school teachers; however, he did not suffer fools easily. The time arrived for each of us to read our work to the class. Year 12 poetry being what it usually is, most of our efforts tended to blur into an angsty, slightly pretentious, self-important mess (similar to staff meetings in many university departments). However, one student’s poem stood out. It was emotive, insightful and economical in its use of language … and best of all, it did not suck! The poem’s author was one of the class’ biggest jocks, and not usually one to display such sensitivity, so we were all a little taken aback by what we were hearing. Stunned silence! At the poem’s conclusion, Mr How congratulated the student on such an excellent effort and produced a copy of the collected works of Emily Dickenson (if I remember correctly) from under his desk. He asked the student to turn to a page he had marked and recite the poem printed there. It was, of course, the same one the student had passed off as his. This time, there was no stunned silence: just the sound of remorseful sobs from our jock-poet-plagiarist who had been exposed in front of his classmates.