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.

Experimental evidences in bearing diagnostics for traction system of high speed trains

Rolling element bearings are the most critical components in the traction system of high speed trains. Monitoring their integrity is a fundamental operation in order to avoid catastrophic failures and to implement effective condition based maintenance strategies. Generally, diagnostics of rolling element bearings is usually performed by analyzing vibration signals measured by accelerometers placed in the proximity of the bearing under investigation. Several papers have been published on this subject in the last two decades, mainly devoted to the development and assessment of signal processing techniques for diagnostics. The experimental validation of such techniques has been traditionally performed by means of laboratory tests on artificially damaged bearings, while their actual effectiveness in specific industrial applications, particularly in rail industry, remains scarcely investigated. This paper is aimed at filling this knowledge gap, by addressing the diagnostics of bearings taken from the service after a long term operation on the traction system of a high speed train. Moreover, in order to test the effectiveness of the diagnostic procedures in the environmental conditions peculiar to the rail application, a specific test-rig has been built, consisting of a complete full-scale train traction system, able to reproduce the effects of wheeltrack interaction and bogie-wheelset dynamics. The results of the experimental campaign show that suitable signal processing techniques are able to diagnose bearing failures even in this harsh and noisy application. Moreover, the most suitable location of the sensors on the traction system is proposed, in order to limit their number.

Lower partial moment and information entropy-based dynamic electricity purchasing strategy

In the electricity market environment, load-serving entities (LSEs) will inevitably face risks in purchasing electricity because there are a plethora of uncertainties involved. To maximize profits and minimize risks, LSEs need to develop an optimal strategy to reasonably allocate the purchased electricity amount in different electricity markets such as the spot market, bilateral contract market, and options market. Because risks originate from uncertainties, an approach is presented to address the risk evaluation problem by the combined use of the lower partial moment and information entropy (LPME). The lower partial moment is used to measure the amount and probability of the loss, whereas the information entropy is used to represent the uncertainty of the loss. Electricity purchasing is a repeated procedure; therefore, the model presented represents a dynamic strategy. Under the chance-constrained programming framework, the developed optimization model minimizes the risk of the electricity purchasing portfolio in different markets because the actual profit of the LSE concerned is not less than the specified target under a required confidence level. Then, the particle swarm optimization (PSO) algorithm is employed to solve the optimization model. Finally, a sample example is used to illustrate the basic features of the developed model and method.

Assessment of body composition in Indian adults: comparison between dual-energy X-ray absorptiometry and isotope dilution technique

Dual-energy X-ray absorptiometry (DXA) and isotope dilution technique have been used as reference methods to validate the estimates of body composition by simple field techniques; however, very few studies have compared these two methods. We compared the estimates of body composition by DXA and isotope dilution (18O) technique in apparently healthy Indian men and women (aged 19–70 years, n 152, 48 % men) with a wide range of BMI (14–40 kg/m2). Isotopic enrichment was assessed by isotope ratio mass spectroscopy. The agreement between the estimates of body composition measured by the two techniques was assessed by the Bland–Altman method. The mean age and BMI were 37 (SD 15) years and 23·3 (SD 5·1) kg/m2, respectively, for men and 37 (SD 14) years and 24·1 (SD 5·8) kg/m2, respectively, for women. The estimates of fat-free mass were higher by about 7 (95 % CI 6, 9) %, those of fat mass were lower by about 21 (95 % CI 218,223) %, and those of body fat percentage (BF%) were lower by about 7·4 (95 % CI 28·2, 26·6) % as obtained by DXA compared with the isotope dilution technique. The Bland–Altman analysis showed wide limits of agreement that indicated poor agreement between the methods. The bias in the estimates of BF% was higher at the lower values of BF%. Thus, the two commonly used reference methods showed substantial differences in the estimates of body composition with wide limits of agreement. As the estimates of body composition are method-dependent, the two methods cannot be used interchangeably

Decomposition of the environmental Kuznets curve : scale, technique, and composition effects

This study decomposed the determinants of environmental quality into scale, technique, and composition effects. We applied a semiparametric method of generalized additive models, which enabled us to use flexible functional forms and include several independent variables in the model. The differences in the technique effect were found to play a crucial role in reducing pollution. We found that the technique effect was sufficient to reduce sulfur dioxide emissions. On the other hand, its effect was not enough to reduce carbon dioxide (CO2) emissions and energy use, except for the case of CO2 emissions in high-income countries.

A methodological exploration to determine transportation disadvantage variables: the partial least square approach

Determining the key variables of transportation disadvantage remains a great challenge as the variables are commonly selected using ad-hoc techniques. In order to identify the variables, this research develops a transportation disadvantage framework by manipulating the capability approach. Developed framework is statistically analysed using partial least square-based software to determine the framework fitness. The statistical analysis identifies mobility and socioeconomic variables that significantly influence transportation disadvantage. The research reveals the key socioeconomic variables for transportation disadvantage in the case of Brisbane, Australia as household structure, presence of dependent family member, vehicle ownership, and driving licence possession.

A hybrid maximum power point tracking for partially shaded photovoltaic systems in the tropics

Partial shading and rapidly changing irradiance conditions significantly impact on the performance of photovoltaic (PV) systems. These impacts are particularly severe in tropical regions where the climatic conditions result in very large and rapid changes in irradiance. In this paper, a hybrid maximum power point (MPP) tracking (MPPT) technique for PV systems operating under partially shaded conditions witapid irradiance change is proposed. It combines a conventional MPPT and an artificial neural network (ANN)-based MPPT. A low cost method is proposed to predict the global MPP region when expensive irradiance sensors are not available or are not justifiable for cost reasons. It samples the operating point on the stairs of I–V curve and uses a combination of the measured current value at each stair to predict the global MPP region. The conventional MPPT is then used to search within the classified region to get the global MPP. The effectiveness of the proposed MPPT is demonstrated using both simulations and an experimental setup. Experimental comparisons with four existing MPPTs are performed. The results show that the proposed MPPT produces more energy than the other techniques and can effectively track the global MPP with a fast tracking speed under various shading patterns.