Auditor independence and fee dependence

This study investigates whether fee dependence within the audit firms' offices jeopardises auditor independence. Fee dependence is examined at both the national audit firm level as well as the local office level and in a setting where public disclosure of fees is mandatory. We focus our tests on audit fee dependence and at the same time we control for the effects of non-audit service fee dependence post the 1989 mergers. We operationalise the exercise of independent judgement in auditing by the propensity to issue qualified audit opinions. If fee dependence affects auditors' independent judgement, then auditors are less likely to qualify the accounts. The study's results show that the level of auditor fee dependence does not affect auditor propensity to issue unqualified audit opinions. The findings remain robust to a number of sensitivity tests including the analyses controlling for the effects of non-audit service fee dependence and other settings in which there is heightened pressure on auditors to confront the effects of fee dependence on exercising independent audit judgement. (C) 2002 Elsevier Science B.V. All rights reserved.

Causal loops and the independence of causal facts

According to Hugh Mellor in Real Time II (1998, Ch. 12), assuming the logical independence of causal facts and the 'law of large numbers', causal loops are impossible because if they were possible they would produce inconsistent sets of frequencies. I clarify the argument, and argue that it would be preferable to abandon the relevant independence assumption in the case of causal loops.

Can occupational therapy intervention play a part in maintaining independence and quality of life in older people? A randomised controlled trial Jeannine Liddle 1 , 2 , Lyn March 3 , Barbara Carfrae 4 , Terence Finnegan 5 , Jane Druce 6 , Jennifer Schwarz 7 Peter Brooks

The main objective of this study was to see if older people could maintain their quality of life and independence after their homes had been modified and they were using community services as recommended by an occupational therapist. There were 167 study participants aged 69 to 94 years from the Northern Sydney Area, After being assessed at home by an occupational therapist, 105 were randomly allocated to one of two groups, to either have or not have the occupational therapist's recommendations carried out, They were assessed again after six months, A third group did not require any intervention, This group was followed up by telephone and postal questionnaire at six months. The main outcome measures used were the Sickness Impact Profile, the Philadelphia Geriatric Center Morale Scale, the Life Satisfaction Index, assessment of Activities of Daily Living, the Health Assessment Questionnaire and change in residence. After six months there were no difference in outcomes among the three groups. Most study participants remained at a satisfactory level on each measure. Three people had died, One had moved to hostel care and one had moved to a nursing home. A further 14 from the group having no intervention had withdrawn from the study, A secondary objective of this study was to indicate the responsiveness of these outcome measures to change in the short term (over six months) in an elderly population. Twelve-month assessments are in progress and may indicate what to expect from these outcome measures in the medium term.

Expression of constitutively activated human c-Kit in myb transformed early myeloid cells leads to factor independence, histiocytic differentiation, and tumorigenicity

The cDNAs encoding wild type (WT) human receptor tyrosine kinase c-Kit and a constitutively activated mutant, V816Kit, were introduced into granulocyte-macrophage colony-stimulating factor (GM-CSF)-dependent early murine hemopoietic cells, which had been transformed with activated Myb, WTKit cells were able to grow in the presence of the human ligand for Kit, stem cell factor (SCF), but displayed reduced growth and clonogenic potential in either SCF or GM-CSF compared with the parental cells in GM-CSF. In contrast, V816Kit cells grew without factor at a higher rate than the parental cells in GM-CSF and displayed increased clonogenicity. Dissection of the growth characteristics in liquid culture showed that in the presence of appropriate factors, the different populations had similar proliferation rates, but that V816Kit profoundly increased cell survival compared with WTKit or parental cells, This suggests that the signals transduced by WTKit activated with SCF, and by V816Kit, were not identical. Also, WTKit and V816Kit-expressing cells both varied from the early myeloid progenitor phenotype of the parental cells and gave rise to a small number of large to giant adherent cells that expressed macrophage (alpha-naphthyl acetate) esterase and neutrophil (naphtol-AS-D-chloroacetate) esterase, were highly phagocytic and phenotypically resembled histiocytes. Thus, WTKit activated by SCF and V816Kit were able to induce differentiation in a proportion of Myb-transformed myeloid cells. The factor independent V816Kit cells, unlike the parental and WTKit expressing cells, were shown to produce tumors of highly mitotic, invasive cells at various stages of differentiation in syngeneic mice. These results imply that constitutively activated Kit can promote the development of differentiated myeloid tumors and that its oncogenic effects are not restricted to lineages (mast cell and B-cell acute lymphoblastic leukemia), which have been reported previously. Furthermore, the mixed populations of cells in culture and in the tumors phenotypically resembled the leukemic cells from patients with monocytic leukemia with histiocytic differentiation (acute myeloid leukemia-M5c), a newly proposed subtype of myeloid leukemia. (C) 1997 by The American Society of Hematology.

Open-economy central banking: Explaining Australia's recommitment to central bank independence

Why do governments offload major instruments such as monetary policy to an independent central bank? This article answers this question in relation to the Australian case, a case which reflects wider global developments. The article challenges the methodology of quantitative approaches to explaining central bank independence and instead argues that a model of 'embedded statism' is the most fruitful explanatory approach.

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients.