An empirical analysis of the global audit market: International Financial Reporting Standards-related changes and differences within the Big 4 global networks

Ongoing debates within the professional and academic communities have raised a number of questions specific to the international audit market. This dissertation consists of three related essays that address such issues. First, I examine whether the propensity to switch between auditors of different sizes (i.e., Big 4 versus non-Big 4) changes as adoption of International Financial Reporting Standards (IFRS) becomes a more common phenomenon, arguing that smaller auditors have an opportunity to invest in necessary skills and training needed to enter this market. Findings suggest that clients are relatively less (more) likely to switch to (away from) a Big 4 auditor if the client's adoption of IFRS occurs in more recent years. ^ In the second essay, I draw on these inferences and test whether the change in audit fees in the year of IFRS adoption changes over time. As the market becomes less concentrated, larger auditors becomes less able to demand a premium for their services. Consistent with my arguments, results suggest that the change in audit service fees declines over time, although this effect seems concentrated among the Big 4. I also find that this effect is partially attributable to a differential effect of the auditors' experience in pricing audit services related to IFRS based on the period in which adoption occurs. The results of these two essays offer important implications to policy debates on the costs and benefits of IFRS adoption. ^ In the third essay, I differentiate Big 4 auditors into three classifications—Parent firms, Brand Name affiliates, and Local affiliates—and test for differences in audit fee premiums (relative to non-Big 4 auditors) and audit quality. Results suggest that there is significant heterogeneity between the three classifications based on both of these characteristics, which is an important consideration for future research. Overall, this dissertation provides additional insights into a variety of aspects of the global audit market.^

Atlantic Ais in the Sixteenth and Seventeenth Centuries: Maritime Adaptation, Indigenous Wrecking, and Buccaneer Raids on Florida’s Central East Coast

The Ais were a Native American group who lived along the Atlantic shoreline of Florida south of Cape Canaveral. This coastal population’s position adjacent to a major shipping route afforded them numerous encounters with the Atlantic world that linked Europe, Africa, the Caribbean, and the Americas. Through their exploitation of the goods and peoples from the European shipwrecks thrown ashore, coupled with their careful manipulation of other Atlantic contacts, the Ais polity established an influential domain in central east Florida during the sixteenth and seventeenth centuries. The pre-contact peoples of Florida’s east coast, including the ancestors of the Ais, practiced a maritime adaptation concentrated on the exploitation of their bountiful riverine, estuarine, and marine environments. The Ais then modified their maritime skills to cope with the opportunities and challenges that accompanied European contact. Using their existing aquatic abilities, they ably salvaged goods and castaways from the Spanish, French, English, and Dutch vessels dashed on the rocks and reefs of Florida’s coast. The Ais’ strategic redistribution of these materials and peoples to other Florida Native Americans, the Spaniards of St. Augustine, and other passing Europeans gained them greater influence. This process, which I call indigenous wrecking, enabled the Ais to expand their domain on the peninsula. Coastal Florida Native Americans’ maritime abilities also attracted the attention of Europeans. In the late seventeenth century, English buccaneers and salvagers raided Florida’s east coast to capture indigenous divers, whom they sent to work the wreck of a sunken Spanish treasure ship located in the Bahamas. The English subsequently sold the surviving Native American captives to other Caribbean slave markets. Despite population losses to such raids, the Ais and other peoples of the east coast thrived on Atlantic exchange and used their existing maritime adaptation to resist colonial intrusions until the start of the eighteenth century. This dissertation thus offers a narrative about Native Americans and the Atlantic that is unlike most Southeastern Indian stories. The Ais used their maritime adaptation and the process of indigenous wrecking to engage and exploit the arriving Atlantic world. In the contact era, the Ais truly became Atlantic Ais.

Three essays on labor liberalization and its effects on world economy

This dissertation consists of three theoretical essays on immigration, international trade and political economy. The first two essays analyze the political economy of immigration in developed countries. The third essay explores new ground on the effects of labor liberalization in developing countries. Trade economists have witnessed remarkable methodological developments in mathematical and game theoretical models during the last seventy years. This dissertation benefits from these advances to analyze economic issues related to immigration. The first essay applies a long run general equilibrium trade model similar to Krugman (1980), and blends it with the median voter ala-Mayer (1984) framework. The second essay uses a short run general equilibrium specific factor trade model similar to Jones (1975) and incorporates it with the median voter model similar to Benhabib (1997). The third essay employs a five stage game theoretical approach similar to Vogel (2007) and solves it by the method of backward induction. The first essay shows that labor liberalization is more likely to come about in societies that have more taste for varieties, and that workers and capital owners could share the same positive stance toward labor liberalization. In a dynamic model, it demonstrates that the median voter is willing to accept fewer immigrants in the first period in order to preserve her domestic political influence in the second period threatened by the naturalization of these immigrants. The second essay shows that the liberalization of labor depends on the host country's stock and distribution of capital, and the number of groups of skilled workers within each country. I demonstrate that the more types of goods both countries produce, the more liberal the host country is toward immigration. The third essay proposes a theory of free movement of goods and labor between two economies with imperfect labor contracts. The heart of my analysis lies in the determinants of talent development where individuals' decisions to emigrate are related to the fixed costs of emigration. Finally, free trade and labor affect income via an indirect effect on individuals' incentives to invest in the skill levels and a direct effect on the prices of goods.

Three essays on corporate governance and meeting-beating or missing analyst forecasts

The beginning of the 21st century was plagued with unprecedented instances of corporate fraud. In an attempt to address apparent non-existent or “broken” corporate governance policies, sweeping measures of financial reporting reform ensued, having specific requirements relating to the composition of audit committees, the interaction between audit committees and external auditors, and procedures concerning auditors’ assessment of client risk. The purpose of my dissertation is to advance knowledge about “good” corporate governance by examining the association between meeting-or-beating analyst forecasts and audit fees, audit committee compensation, and audit committee tenure and “busyness”. Using regression analysis, I found the following: (1) the frequency of meeting-or-just beating (just missing) analyst forecasts is negatively (positively) associated with audit fees, (2) the extent by which a firm exceeds analysts’ forecasts is positively (negatively) associated with audit committee compensation that is predominately equity-based (cash-based), and (3) the likelihood of repeatedly meeting-or-just beating analyst forecasts is positively associated with audit committee tenure and “busyness”. These results suggest that auditors consider clients who frequently meet-or-just beat forecasts as being less “risky”, and clients that frequently just miss as being more “risky”. The results also imply that cash-based director compensation is more successful in preserving the effectiveness of the audit committee’s financial reporting oversight role, that equity-based compensation motivates independent audit committee directors to focus on short-term performance thereby aligning their interests with management, and that audit committee director tenure and the degree of director “busyness” can affect an audit committee member’s effectiveness in providing financial reporting oversight. Collectively, my dissertation provides additional insights regarding corporate governance practices and informs policy-makers for future relevant decisions.^

The Indigenous in Plurinational Bolivia: Perceptions of Indigenous People in Bolivia Before & During the Morales Government

Indigenous people in Bolivia have historically been excluded from the social and political life of their country, where socioeconomic differences are highly correlated with ethnic identities. However, after a serious political crisis, in 2005 an indigenous leader was elected President in an unprecedented election, and the country has since faced aggressive social and political transformations. Using survey data that ranges from 1998 to 2010, this paper shows some relevant changes in the perceptions and attitudes of indigenous people towards the democratic regime, its political institutions, and other citizens. The trends shown suggest that the average relationship of indigenous citizens with the estate and its institutions has improved both in relative and in absolute terms. However, levels of political tolerance among indigenous Bolivians do not seem to have increased at the same rate as those of non-indigenous Bolivians.

Three Essays on Taxation, Growth and Consumption

The purpose of this dissertation is to examine three distributional issues in macroeconomics. First I explore the effects fiscal federalism on economic growth across regions in China. Using the comprehensive official data set of China for 31 regions from 1952 until 1999, I investigate a number of indicators used by the literature to measure federalism and find robust support for only one such measure: the ratio of local total revenue to local tax revenue. Using a difference-in-difference approach and exploiting the two-year gap in the implementation of a tax reform across different regions of China, I also identify a positive relationship between fiscal federalism and regional economic growth. The second paper hypothesizes that an inequitable distribution of income negatively affects the rule of law in resource-rich economies and provides robust evidence in support of this hypothesis. By investigating a data set that contains 193 countries and using econometric methodologies such as the fixed effects estimator and the generalized method of moments estimator, I find that resource-abundance improves the quality of institutions, as long as income and wealth disparity remains below a certain threshold. When inequality moves beyond this threshold, the positive effects of the resource-abundance level on institutions diminish quickly and turn negative eventually. This paper, thus, provides robust evidence about the endogeneity of institutions and the role income and wealth inequality plays in the determination of long-run growth rates. The third paper sets up a dynamic general equilibrium model with heterogeneous agents to investigate the causal channels which run from a concern for international status to long-run economic growth. The simulation results show that the initial distribution of income and wealth play an important role in whether agents gain or lose from globalization.

Spiritual Violence: Queer People and the Sacrament of Communion

This thesis addresses spiritual violence done to queer people in the sacrament of Communion, or Eucharist, in both Protestant and Roman Catholic churches in the U.S. Rooted in the sexual dimorphic interpretation of Genesis, theologians engendered Christianity with sexism and patriarchy, both of which have since developed into intricate intersections of oppressions. Religious abuse is founded on the tradition of exclusionary practices and is validated through narrow interpretations of Scripture that work to reassert the authority of the experiences of the dominant culture. The resultant culture of oppression manifests itself in ritualized spiritual violence. Queer people are deemed “unworthy” to take ‘the body and blood of the Christ’ and, in fact, are excluded altogether. This “unworthiness” is expressed as spiritual violence against queer people who are shunned and humiliated, internalize hateful messages, and are denied spiritual guidance or life-affirming messages. By “queering” Scripture, or reading the Bible anew through a framework of justice, queer people have begun to sacramentalize their experiences and reclaim their place at the table.