Fair values and audit fees: Evidence from asset revaluations in Australia

This paper examines the association between the level of audit fees paid and asset revaluations, one use of fair value accounting. This Australian study also investigates attributes of asset revaluations and the association with the level of audit fees paid. We find that firms choosing the revaluation model incur higher audit fees than those that chose the cost model; asset revaluations made by directors lead to the firm incurring higher audit fees than for those made by external independent appraisers; and revaluation of investment properties leads to lower audit fees. The findings suggest that asset revaluations can result in higher agency costs and audit fees vary with the reliability of the revaluations and the class of assets being revalued.

Appendiceal sonography in children: A retrospective analysis as a platform for potential implementation of diagnostic categories

- Background Sonography is an important diagnostic tool in children with suspected appendicitis. Reported accuracy and appendiceal visualisation rates vary significantly, as does the management of equivocal ultrasound findings. The aim of this study was to audit appendiceal sonography at a tertiary children's hospital, and provide baseline data for a future prospective study. - Summary of work Records of children who underwent ultrasound studies for possible appendicitis between January 2008 and December 2010 were reviewed. Variables included patient demographics, sonographic appendix characteristics, and secondary signs. Descriptive statistics and analysis using ANOVA, Mann-Whitney U test, and ROC curves were performed. Mater Human Research Ethic Committee approval was granted. - Summary of results There were 457 eligible children. Using a dichotomous diagnostic model (including equivocal results), sensitivity was 89.6%, specificity 91.6%, and diagnostic yield of 40.7%. ROC curve analysis of a 6mm diameter cut-off was 0.88 AUC (95% CI 0.80 to 0.95). - Discussion and conclusions Sonography is an accurate test for acute appendicitis in children, with a high sensitivity and negative predictive value. A diameter of 6mm as an absolute cut-off in a binary model can lead to false findings. Results were compared with available literature. Recent publications propose categorising diameter1 and integrating secondary signs2 to improve accuracy and provide more meaningful results to clinicians. This study will be a benchmark for future studies with multiple diagnostic categorisation.