The effect of internal audit function quality and internal audit contribution to external audit on audit fees

Corporate governance mandates and listing rules identify internal audit functions (IAF) as a central internal control mechanism. External audits are expected to assess the quality of IAF before placing reliance on its work. We provide evidence on the effect of IAF quality and IAF contribution to external audit on audit fees. Using data from a matched survey of both external and internal audits, we extend prior research which is based mainly on internal audits' assessment and conducted predominantly in highly developed markets. We find a positive relationship between IAF quality and audit fees as well as a reduction in audit fees as a result of external auditors' reliance on IAF. The interaction between IAF quality and IAF contribution to external audit suggests that high quality IAF induces greater external auditor reliance on internal auditors' work and thus result in lower external audit fees.

Effect of temperature and precipitation on salmonellosis cases in South-East Queensland, Australia: An observational study

Objective Foodborne illnesses in Australia, including salmonellosis, are estimated to cost over $A1.25 billion annually. The weather has been identified as being influential on salmonellosis incidence, as cases increase during summer, however time series modelling of salmonellosis is challenging because outbreaks cause strong autocorrelation. This study assesses whether switching models is an improved method of estimating weather–salmonellosis associations. Design We analysed weather and salmonellosis in South-East Queensland between 2004 and 2013 using 2 common regression models and a switching model, each with 21-day lags for temperature and precipitation. Results The switching model best fit the data, as judged by its substantial improvement in deviance information criterion over the regression models, less autocorrelated residuals and control of seasonality. The switching model estimated a 5°C increase in mean temperature and 10 mm precipitation were associated with increases in salmonellosis cases of 45.4% (95% CrI 40.4%, 50.5%) and 24.1% (95% CrI 17.0%, 31.6%), respectively. Conclusions Switching models improve on traditional time series models in quantifying weather–salmonellosis associations. A better understanding of how temperature and precipitation influence salmonellosis may identify where interventions can be made to lower the health and economic costs of salmonellosis.

Annual nitrogen dynamics and urea fertilizer recoveries from a dairy pasture using 15N; effect of nitrification inhibitor DMPP and reduced application rates

Direct nitrogen (N) losses from pastures contribute to the poor nitrogen use efficiency of the dairy industry, though the exact fate of applied N and the processes involved are largely unknown. Nitrification inhibitors such as DMPP can potentially increase fertilizer N use efficiency (NUE), though few studies globally have examined the effectiveness of DMPP coated urea in pastures. This study quantified the NUE of DMPP combined with reduced application rates, and the effect on N dynamics and plant–soil interactions over an annual ryegrass/kikuyu rotation in Queensland, Australia. Labeled 15N urea and DMPP was applied over 7 winter applications at standard farmer (45 kg N ha−1) and half (23 kg N ha−1) rates. Fertilizer recoveries and NUE were calculated over 13 harvests, and the contribution of fertilizer and soil N estimated. Up to 85% of the annual N harvested was from soil organic matter. DMPP at the lower rate increased annual yields by 31% compared to the equivalent urea treatment with no difference to the high N rates. Almost 40% of the N added at the conventional fertilizer application rate as urea was lost to the environment; 80 kg N ha−1 higher than the low DMPP. Combining the nitrification inhibitor DMPP with reduced fertilizer application rates shows substantial potential to reduce N losses to the environment while sustaining productivity in subtropical dairy pastures.