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.

A novel high voltage pulsed power supply based on low voltage switch-capacitor units

This paper presents a high voltage pulsed power system based on low voltage switch-capacitor units connected to a current source for several applications such as plasma systems. A buck-boost converter topology is used to utilize the current source and a series of low voltage switch-capacitor units is connected to the current source in order to provide high voltage with high voltage stress (dv/dt) as demanded by loads. This pulsed power converter is flexible in terms of energy control, in that the stored energy in the current source can be adjusted by changing the current magnitude to significantly improve the efficiency of various systems with different requirements. Output voltage magnitude and stress (dv/dt) can be controlled by a proper selection of components and control algorithm to turn on and off switching devices.

A novel high voltage pulsed power supply based on low voltage switch-capacitor units

This paper presents a high voltage pulsed power system based on low voltage switch-capacitor units connected to a current source for several applications such as plasma systems. A modified positive buck-boost converter topology is used to utilize the current source concept and a series of low voltage switch-capacitor units is connected to the current source in order to provide high voltage with high voltage stress (dv/dt) as demanded by loads. This pulsed power converter is flexible in terms of energy control, in that the stored energy in the current source can be adjusted by changing the current magnitude to significantly improve the efficiency of various systems with different requirements. Output voltage magnitude and stress (dv/dt) can be controlled by a proper selection of components and control algorithm to turn on and off switching devices.

Stochastic models for regulatory networks of the genetic toggle switch

Bistability arises within a wide range of biological systems from the λ phage switch in bacteria to cellular signal transduction pathways in mammalian cells. Changes in regulatory mechanisms may result in genetic switching in a bistable system. Recently, more and more experimental evidence in the form of bimodal population distributions indicates that noise plays a very important role in the switching of bistable systems. Although deterministic models have been used for studying the existence of bistability properties under various system conditions, these models cannot realize cell-to-cell fluctuations in genetic switching. However, there is a lag in the development of stochastic models for studying the impact of noise in bistable systems because of the lack of detailed knowledge of biochemical reactions, kinetic rates, and molecular numbers. In this work, we develop a previously undescribed general technique for developing quantitative stochastic models for large-scale genetic regulatory networks by introducing Poisson random variables into deterministic models described by ordinary differential equations. Two stochastic models have been proposed for the genetic toggle switch interfaced with either the SOS signaling pathway or a quorum-sensing signaling pathway, and we have successfully realized experimental results showing bimodal population distributions. Because the introduced stochastic models are based on widely used ordinary differential equation models, the success of this work suggests that this approach is a very promising one for studying noise in large-scale genetic regulatory networks.

An improved genetic algorithm and graph theory based method for optimal sectionalizer switch placement in distribution networks with DG

In this paper a new graph-theory and improved genetic algorithm based practical method is employed to solve the optimal sectionalizer switch placement problem. The proposed method determines the best locations of sectionalizer switching devices in distribution networks considering the effects of presence of distributed generation (DG) in fitness functions and other optimization constraints, providing the maximum number of costumers to be supplied by distributed generation sources in islanded distribution systems after possible faults. The proposed method is simulated and tested on several distribution test systems in both cases of with DG and non DG situations. The results of the simulations validate the proposed method for switch placement of the distribution network in the presence of distributed generation.

The switch

In this video, text types across the screen one line at a time set to an emotive stock music soundtrack. The text combines two teen film plot descriptions into one story. This work engages with the language of Hollywood narratives. By emphasizing the potentially abstract and convoluted qualities of linguistic communication, it challenges our capacity to assimilate information into conventional narratives. It draws specific attention to the conventions of Hollywood plot development, and questions the mechanisms by which they construct and communicate meaning.

Mandatory auditor rotation : Australian evidence

A key part of the auditor independence reforms in Australia, as represented by Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth) (CLERP 9), mandates audit partner rotation. The change was criticised predominantly due to the costs imposed on both the audit firms and the audit clients. This study examines the Australian experience post-CLERP 9 with mandated auditor rotation. Based on data of audit partner rotation over 2003–2009 (on average 1200 listed Australian companies over the sample period), we show that audit partner tenure sat at a median of 2–3 years, but that the maximum audit partner tenure was as high as 20 years in the pre-CLERP 9 period. For around 85% of the market, audit partner rotation occurred voluntarily at between 1–5 years. The interesting result is that for 15% of the market, the mandated audit partner rotation had a significant impact on corporate governance practice. There is also a greater observed impact of mandatory rotation on audit engagements involving the non-global auditing firms. These findings inform the debate as to the ‘costliness’ of the law reform.

Regulatory responses to auditor independence dilemmas – who takes the stronger line?

A key part of corporate governance reforms in Australia, as represented by CLERP 9, addresses concerns over the audit function and the role of independent auditors in monitoring managers and providing useful information to stakeholders about the financial position of the company. In comparing the regulatory responses to auditor independence dilemmas, there have been claims that CLERP 9 is less ‘stringent’ than the reforms imposed by the Sarbanes Oxley Act in the US. This paper looks at three particular situations that have been the subject of recent reform to strengthen independence: the mandatory rotation of auditors, recruitment of former auditors as board members, and provision of non-audit services to clients. In each case, we compare the similarities and differences of the regulatory response between Australia and US, to distil the efficacy of the CLERP 9 approach.

Auditor obligations in an evolving legal landscape

Purpose – The purpose of this paper is to look at auditor obligations to their clients and potentially to third parties such as investors, with a focus on the quality of financial disclosure in an evolving legal framework. Design/methodology/approach – The article outlines and compares established and emerging trends relative to information disclosure and contractual performance in parallel contexts where information asymmetry exists. In particular, this article considers the disclosure regime that has evolved in the insurance industry to address the substantial imbalance in the level of knowledge possessed by the insured in comparison to the prospective insurer. Abductive reasoning is used to identify causal constructs that explain the data pattern from which the theorised potential for judicial revision of the interpretation of “true and fair” in line with “good faith” in legal regulation is derived. Findings – The authors conclude that there is little doubt that a duty of good faith in relation to auditor-company contractual dealings and potentially a broader good faith duty to third parties such as investors in companies may be on the horizon. Originality/value – In the context of stated objectives by organisations such as the International Federation of Accountants to reconcile ethical and technical skills in the wake of the global financial crisis, there is an increased need to rebuild public and investor confidence in the underpinning integrity of financial reporting. This paper offers a perspective on one way to achieve this by recognising the similarities in the information asymmetry relationships in the insurance industry and how the notion of “good faith” in that relationship could be useful in the audit situation.

The impact of auditor independence regulations on established and emerging firms.

Purpose – The purpose of this paper is to study whether auditor independence reforms introduced in 2004 led to an enhancement in earnings quality in the post-reform era. Design/methodology/approach – This study predicts that as the cost of compliance will vary based on a firm's existing corporate governance regime and the level of external scrutiny (monitoring) it faces, we compare the earnings quality of a sample of “established” (S&P/ASX 100) to a sample of “emerging” (S&P/ASX Small Ordinaries Index) firms. The paper examines the reporting behaviour of the two groups of listed entities, covering the regulatory change period 2003-2006. The paper uses regression modelling to test the associations between increased audit independence, earnings quality and corporate governance mechanisms over the pre- and post-regulatory period. Findings – The paper's results confirm that earnings quality for the established firms was enhanced in the post-reform period; while this was not the case for emerging firms. The evidence also suggests that corporate governance mechanisms of board independence and board financial skill are associated with higher earnings quality; while the higher the concentration of insider firm ownership is associated with lower earnings quality. Practical implications – This study provides policy makers with evidence as to changes in reporting behaviour following law reform aimed at strengthening auditor independence. Originality/value – The studies on earnings quality are informed by the US market practices. Australia provides a unique setting through its auditor independence reforms to examine the impact of reform choices. This study also investigates two specific subsets of the market: established firms and emerging firms.

A class B switch-mode assisted linear amplifier

A switch-mode assisted linear amplifier (SMALA) combining a linear (Class B) and a switch-mode (Class D) amplifier is presented. The usual single hysteretic controlled half-bridge current dumping stage is replaced by two parallel buck converter stages, in a parallel voltage controlled topology. These operate independently: one buck converter sources current to assist the upper Class B output device, and a complementary converter sinks current to assist the lower device. This topology lends itself to a novel control approach of a dead-band at low power levels where neither class D amplifier assists, allowing the class B amplifier to supply the load without interference, ensuring high fidelity. A 20 W implementation demonstrates 85% efficiency, with distortion below 0.08% measured across the full audio bandwidth at 15 W. The class D amplifier begins assisting at 2 W, and below this value, the distortion was below 0.03%. Complete circuitry is given, showing the simplicity of the additional class D amplifier and its corresponding control circuitry.

Hysteretic multilevel NPC converter control for a Switch Mode Assisted Linear Amplifier

A Switch-Mode Assisted Linear Amplifier (SMALA) combines the high quality of a linear amplifier required for audio applications with the high efficiency of a switch-mode amplifier. The careful choice of current sense point and switch placement allows a simple non-isolated hysteresis current controller for the switch-mode section. This paper explains the extension of the hysteresis current controller for the control of a three level Neutral Point Clamped (NPC) converter, with simulations as proof of concept. The NPC topology allows the use of lower voltage switches and lower switching frequencies to implement high power audio amplifiers using the SMALA topology.

A method of switch selection for an electric vehicle drive

The key to reducing cost of electric vehicles is integration. All too often systems such as the motor, motor controller, batteries and vehicle chassis/body are considered as separate problems. The truth is that a lot of trade-offs can be made between these systems, causing an overall improvement in many areas including total cost. Motor controller and battery cost have a relatively simple relationship; the less energy lost in the motor controller the less energy that has to be carried in the batteries, hence the lower the battery cost. A motor controller’s cost is primarily influenced by the cost of the switches. This paper will therefore present a method of assessing the optimal switch selection on the premise that the optimal switch is the one that produces the lowest system cost, where system cost is the cost of batteries + switches.

An improved chemically inducible gene switch that functions in the monocotyledonous plant sugar cane

Chemically inducible gene switches can provide precise control over gene expression, enabling more specific analyses of gene function and expanding the plant biotechnology toolkit beyond traditional constitutive expression systems. The alc gene expression system is one of the most promising chemically inducible gene switches in plants because of its potential in both fundamental research and commercial biotechnology applications. However, there are no published reports demonstrating that this versatile gene switch is functional in transgenic monocotyledonous plants, which include some of the most important agricultural crops. We found that the original alc gene switch was ineffective in the monocotyledonous plant sugar cane, and describe a modified alc system that is functional in this globally significant crop. A promoter consisting of tandem copies of the ethanol receptor inverted repeat binding site, in combination with a minimal promoter sequence, was sufficient to give enhanced sensitivity and significantly higher levels of ethanol inducible gene expression. A longer CaMV 35S minimal promoter than was used in the original alc gene switch also substantially improved ethanol inducibility. Treating the roots with ethanol effectively induced the modified alc system in sugar cane leaves and stem, while an aerial spray was relatively ineffective. The extension of this chemically inducible gene expression system to sugar cane opens the door to new opportunities for basic research and crop biotechnology.