Audit pricing, reporting quality, and auditor switches in the post -SOX period

The Sarbanes-Oxley Act represents an important watershed event in the history and regulation of the accounting profession. In this dissertation, I develop arguments as to why we can expect differences in auditor behavior before and after SOX and empirically test if indeed there were differences in auditor behavior before and after SOX. My dissertation consists of three essays. For the three essays, I investigate issues related to auditor independence, audit pricing, the impact of auditor changes in the post-SOX period. The motivation for the first part of my research comes from the SEC's assertions that there are differences between types of non-audit services in terms of their potential to adversely impact auditor independence. The first part of my dissertation empirically validates the SEC's assertions that auditors would be more conservative in those instances where the tax and other non-audit services fee ratios are high but not when the audit-related fee ratio is high. The second part of my study examines if auditors are less likely to "low ball" their audit fees in the period after SOX than in the period preceding SOX. Legislators, regulators, and the media have expressed concerns that auditors "low ball" the fees for initial year audits and that such low-balling can lead to reduced audit quality. I find that there is significant initial year audit fee discount in pre-SOX period and but the fee discount does not hold in post-SOX periods. The third part of my dissertation examines the association between auditor switches and auditor conservatism. I find that a large portion of Big 4 clients switch to non-Big 4 auditors and there is no significant evidence indicating that successor auditors are more conservative in the post-SOX period.

Why Leaves Turn Red in Autumn. The Role of Anthocyanins in Senescing Leaves of Red-Osier Dogwood

Why the leaves of many woody species accumulate anthocyanins prior to being shed has long puzzled biologists because it is unclear what effects anthocyanins may have on leaf function. Here, we provide evidence for red-osier dogwood (Cornus stolonifera) that anthocyanins form a pigment layer in the palisade mesophyll layer that decreases light capture by chloroplasts. Measurements of leaf absorbance demonstrated that red-senescing leaves absorbed more light of blue-green to orange wavelengths (495–644 nm) compared with yellow-senescing leaves. Using chlorophyll a fluorescence measurements, we observed that maximum photosystem II (PSII) photon yield of red-senescing leaves recovered from a high-light stress treatment, whereas yellow-senescing leaves failed to recover after 6 h of dark adaptation, which suggests photo-oxidative damage. Because no differences were observed in light response curves of effective PSII photon yield for red- and yellow-senescing leaves, differences between red- and yellow-senescing cannot be explained by differences in the capacities for photochemical and non-photochemical light energy dissipation. A role of anthocyanins as screening pigments was explored further by measuring the responses PSII photon yield to blue light, which is preferentially absorbed by anthocyanins, versus red light, which is poorly absorbed. We found that dark-adapted PSII photon yield of red-senescing leaves recovered rapidly following illumination with blue light. However, red light induced a similar, prolonged decrease in PSII photon yield in both red- and yellow-senescing leaves. We suggest that optical masking of chlorophyll by anthocyanins reduces risk of photo-oxidative damage to leaf cells as they senesce, which otherwise may lower the efficiency of nutrient retrieval from senescing autumn leaves.

Measuring effectiveness in international financial crime prevention: Can we agree on a performance metric?

The attempts at carrying out terrorist attacks have become more prevalent. As a result, an increasing number of countries have become particularly vigilant against the means by which terrorists raise funds to finance their draconian acts against human life and property. Among the many counter-terrorism agencies in operation, governments have set up financial intelligence units (FIUs) within their borders for the purpose of tracking down terrorists’ funds. By investigating reported suspicious transactions, FIUs attempt to weed out financial criminals who use these illegal funds to finance terrorist activity. The prominent role played by FIUs means that their performance is always under the spotlight. By interviewing experts and conducting surveys of those associated with the fight against financial crime, this study investigated perceptions of FIU performance on a comparative basis between American and non-American FIUs. The target group of experts included financial institution personnel, civilian agents, law enforcement personnel, academicians, and consultants. Questions for the interview and surveys were based on the Kaplan and Norton’s Balanced Scorecard (BSC) methodology. One of the objectives of this study was to help determine the suitability of the BSC to this arena. While FIUs in this study have concentrated on performance by measuring outputs such as the number of suspicious transaction reports investigated, this study calls for a focus on outcomes involving all the parties responsible for financial criminal investigations. It is only through such an integrated approach that these various entities will be able to improve performance in solving financial crime. Experts in financial intelligence strongly believed that the quality and timeliness of intelligence was more important than keeping track of the number of suspicious transaction reports. Finally, this study concluded that the BSC could be appropriately applied to the arena of financial crime prevention even though the emphasis is markedly different from that in the private sector. While priority in the private sector is given to financial outcomes, in this arena employee growth and internal processes were perceived as most important in achieving a satisfactory outcome.

Phosphorus Biogeochemistry and the Impact of Phosphorus Enrichment: Why Is the Everglades so Unique?

The Florida Everglades is extremely oligotrophic and sensitive to small increases in phosphorus (P) concentrations. P enrichment is one of the dominant anthropogenic impacts on the ecosystem and is therefore a main focus of restoration efforts. In this review, we synthesize research on P biogeochemistry and the impact of P enrichment on ecosystem structure and function in the Florida Everglades. There are clear patterns of increased P concentrations and altered structure and processes along nutrient-enrichment gradients in the water, periphyton, soils, macrophytes, and consumers. Periphyton, an assemblage of algae, bacteria, and associated microfauna, is abundant and has a large influence on phosphorus cycling in the Everglades. The oligotrophic Everglades is P-starved, has lower P concentrations and higher nitrogen–phosphorus (N:P) ratios, and has oxidized to only slightly reduced soil profiles compared to other freshwater wetland ecosystems. Possible general causes and indications of P limitation in the Everglades and other wetlands include geology, hydrology, and dominance of oxidative microbial nutrient cycling. The Everglades may be unique with respect to P biogeochemistry because of the multiple causes of P limitation and the resulting high degree of limitation.

South Beach Wine and Food Festival - Why Participate?

This paper studies why restaurants, wineries, and other exhibiters participate in Wine & Food festivals. We hypothesized [hat the purpose was to acquire new customers thru promotional involvement in the festival. A secondary outcome was to ascertain if there were differences in motivation between the three groups. A survey was conducted of participating companies in one of the largest Food & Wine festivals. We found differences in what motivated winery participants from restaurants or other exhibitors. A discussion of these differences and how festival organizers may aid participants in achieving their goals is presented.

Could Relatedness Help Explain Why Individuals Lead in Bottlenose Dolphin Groups?

In many species, particular individuals consistently lead group travel. While benefits to followers often are relatively obvious, including access to resources, benefits to leaders are often less obvious. This is especially true for species that feed on patchy mobile resources where all group members may locate prey simultaneously and food intake likely decreases with increasing group size. Leaders in highly complex habitats, however, could provide access to foraging resources for less informed relatives, thereby gaining indirect benefits by helping kin. Recently, leadership has been documented in a population of bottlenose dolphins (Tursiops truncatus) where direct benefits to leaders appear unlikely. To test whether leaders could benefit indirectly we examined relatedness between leader-follower pairs and compared these levels to pairs who associated but did not have leader-follower relationship (neither ever led the other). We found the average relatedness value for leader-follower pairs was greater than expected based on chance. The same was not found when examining non leader-follower pairs. Additionally, relatedness for leader-follower pairs was positively correlated with association index values, but no correlation was found for this measure in non leader-follower pairs. Interestingly, haplotypes were not frequently shared between leader-follower pairs (25%). Together, these results suggest that bottlenose dolphin leaders have the opportunity to gain indirect benefits by leading relatives. These findings provide a potential mechanism for the maintenance of leadership in a highly dynamic fission-fusion population with few obvious direct benefits to leaders.

Why Most Biomedical Findings Echoed by Newspapers Turn Out to be False: The Case of Attention Deficit Hyperactivity Disorder

Context: Because positive biomedical observations are more often published than those reporting no effect, initial observations are often refuted or attenuated by subsequent studies. Objective: To determine whether newspapers preferentially report on initial findings and whether they also report on subsequent studies. Methods: We focused on attention deficit hyperactivity disorder (ADHD). Using Factiva and PubMed databases, we identified 47 scientific publications on ADHD published in the 1990s and soon echoed by 347 newspapers articles. We selected the ten most echoed publications and collected all their relevant subsequent studies until 2011. We checked whether findings reported in each ‘‘top 10’’ publication were consistent with previous and subsequent observations. We also compared the newspaper coverage of the ‘‘top 10’’ publications to that of their related scientific studies. Results: Seven of the ‘‘top 10’’ publications were initial studies and the conclusions in six of them were either refuted or strongly attenuated subsequently. The seventh was not confirmed or refuted, but its main conclusion appears unlikely. Among the three ‘‘top 10’’ that were not initial studies, two were confirmed subsequently and the third was attenuated. The newspaper coverage of the ‘‘top 10’’ publications (223 articles) was much larger than that of the 67 related studies (57 articles). Moreover, only one of the latter newspaper articles reported that the corresponding ‘‘top 10’’ finding had been attenuated. The average impact factor of the scientific journals publishing studies echoed by newspapers (17.1 n = 56) was higher (p,0.0001) than that corresponding to related publications that were not echoed (6.4 n = 56). Conclusion: Because newspapers preferentially echo initial ADHD findings appearing in prominent journals, they report on uncertain findings that are often refuted or attenuated by subsequent studies. If this media reporting bias generalizes to health sciences, it represents a major cause of distortion in health science communication.