Auditor independence : shared meaning between the demand and supply sides of the audit services market?

Purpose – The purpose of the paper is to examine the extent to which there is shared meaning of the concept of auditor independence between the three major groups of parties on the demand and supply sides of the audit services market – auditors, financial report preparers and financial report users.

Design/methodology/approach – The paper utilises the measurement of meaning framework (semantic differential analysis) originally proposed by Osgood et al. in 1957. The framework is used to investigate the extent to which there is shared meaning (agreement in interpretations) of the independence concept, in response to alternative audit engagement case contexts, between key parties to the financial reporting communication process. The study's research data was collected in the period March 2004-May 2005.

Findings – Findings indicate a robust and stable single-factor cognitive structure within which the research participants interpret the connotative meaning of the auditor independence concept. An analysis of the experimental cases finds similarities in connotations (interpretations) of an audit firm's independence for the participant groups for most cases, with the exception of cases involving the joint provision of audit and non-audit (taxation) services.

Research limitations/implications – The usual external validity threat that applies to experimental research generally applies to the study. That is, the results may not be generalisable to settings beyond those examined in the study. An important implication of the study is that it emphasises the continuing problematic nature of the joint provision of audit and non-audit services, even in situations where the non-audit services comprise only traditional taxation services.

Originality/value – The study is the first to examine the concept of auditor independence by means of the Osgood et al. measurement of meaning research framework using, as research participants, the three major groups on the demand and supply sides of the audit services market.

The role of board independence in mitigating agency problem II in Australian family firms

We investigate the impact of board independence on earnings management on a sample of family controlled firms listed on the Australian Securities Exchange (ASX). Using panel data over the period 2000–2004, we find evidence of earnings management among family controlled firms in Australia, an environment of high investor protection and private benefits of control. Findings show that a higher proportion of independent directors on boards is effective in reducing earnings management, thereby mitigating agency problems associated with entrenchment and expropriation in family firms. We also find that managers of family firms are less aggressive in managing earnings via discretionary long-term accruals compared to non-family firms.

Using the functional independence measure to assess adults with cerebral palsy: an exploratory report

The Functional Independence Measure (FIM) was selected as an assessment to be conducted annually with adults attending The Spastic Centre of New South Wales (SCNSW), Australia, an organisation specifically for individuals with cerebral palsy. Service-providers were trained in the administration of the FIM and in the use of a customised data base. Initially 173 adults with cerebral palsy were assessed, this number included 135 individuals in supported and open employment. The FIM is currently being used to assess all adults attending the SCNSW as part of an annual review. The data from this ongoing assessment procedure will assist in lobbying government to ensure that individuals have access to the attendant care services that they require to function optimally in the community and will provide a longitudinal data base for study of some of the effects of the ageing process on individuals with cerebral palsy. A case study is presented which illustrates the use of the FIM with a couple who live independently in the community.

Do individual auditors affect audit quality? Evidence from archival data

We examine whether and how individual auditors affect audit outcomes using a large set of archival Chinese data. We analyze approximately 800 individual auditors and find that they exhibit significant variation in audit quality. The effects that individual auditors have on audit quality are both economically and statistically significant, and are pronounced in both large and small audit firms. We also find that the individual auditor effects on audit quality can be partially explained by auditor characteristics, such as educational background, Big N audit firm experience, rank in the audit firm, and political affiliation. Our findings highlight the importance of scrutinizing and understanding audit quality at the individual auditor level.

Testing the Markov property with ultra high frequency financial data

This paper develops a framework to test whether discrete-valued irregularly-spaced financial transactions data follow a subordinated Markov process. For that purpose, we consider a specific optional sampling in which a continuous-time Markov process is observed only when it crosses some discrete level. This framework is convenient for it accommodates not only the irregular spacing of transactions data, but also price discreteness. Further, it turns out that, under such an observation rule, the current price duration is independent of previous price durations given the current price realization. A simple nonparametric test then follows by examining whether this conditional independence property holds. Finally, we investigate whether or not bid-ask spreads follow Markov processes using transactions data from the New York Stock Exchange. The motivation lies on the fact that asymmetric information models of market microstructures predict that the Markov property does not hold for the bid-ask spread. The results are mixed in the sense that the Markov assumption is rejected for three out of the five stocks we have analyzed.

Double-Observer Line Transect Methods: Levels of Independence

Double-observer line transect methods are becoming increasingly widespread, especially for the estimation of marine mammal abundance from aerial and shipboard surveys when detection of animals on the line is uncertain. The resulting data supplement conventional distance sampling data with two-sample mark–recapture data. Like conventional mark–recapture data, these have inherent problems for estimating abundance in the presence of heterogeneity. Unlike conventional mark–recapture methods, line transect methods use knowledge of the distribution of a covariate, which affects detection probability (namely, distance from the transect line) in inference. This knowledge can be used to diagnose unmodeled heterogeneity in the mark–recapture component of the data. By modeling the covariance in detection probabilities with distance, we show how the estimation problem can be formulated in terms of different levels of independence. At one extreme, full independence is assumed, as in the Petersen estimator (which does not use distance data); at the other extreme, independence only occurs in the limit as detection probability tends to one. Between the two extremes, there is a range of models, including those currently in common use, which have intermediate levels of independence. We show how this framework can be used to provide more reliable analysis of double-observer line transect data. We test the methods by simulation, and by analysis of a dataset for which true abundance is known. We illustrate the approach through analysis of minke whale sightings data from the North Sea and adjacent waters.

Mobile phone technologies and advanced data analysis towards the enhancement of diabetes self-management

Advances in the area of mobile and wireless communication for healthcare (m-Health) along with the improvements in information science allow the design and development of new patient-centric models for the provision of personalised healthcare services, increase of patient independence and improvement of patient's self-control and self-management capabilities. This paper comprises a brief overview of the m-Health applications towards the self-management of individuals with diabetes mellitus and the enhancement of their quality of life. Furthermore, the design and development of a mobile phone application for Type 1 Diabetes Mellitus (T1DM) self-management is presented. The technical evaluation of the application, which permits the management of blood glucose measurements, blood pressure measurements, insulin dosage, food/drink intake and physical activity, has shown that the use of the mobile phone technologies along with data analysis methods might improve the self-management of T1DM.

Brain areas involved in medial temporal lobe seizures: a principal component analysis of ictal SPECT data

The study describes brain areas involved in medial temporal lobe (mTL) seizures of 12 patients. All patients showed so-called oro-alimentary behavior within the first 20 s of clinical seizure manifestation characteristic of mTL seizures. Single photon emission computed tomography (SPECT) images of regional cerebral blood flow (rCBF) were acquired from the patients in ictal and interictal phases and from normal volunteers. Image analysis employed categorical comparisons with statistical parametric mapping and principal component analysis (PCA) to assess functional connectivity. PCA supplemented the findings of the categorical analysis by decomposing the covariance matrix containing images of patients and healthy subjects into distinct component images of independent variance, including areas not identified by the categorical analysis. Two principal components (PCs) discriminated the subject groups: patients with right or left mTL seizures and normal volunteers, indicating distinct neuronal networks implicated by the seizure. Both PCs were correlated with seizure duration, one positively and the other negatively, confirming their physiological significance. The independence of the two PCs yielded a clear clustering of subject groups. The local pattern within the temporal lobe describes critical relay nodes which are the counterpart of oro-alimentary behavior: (1) right mesial temporal zone and ipsilateral anterior insula in right mTL seizures, and (2) temporal poles on both sides that are densely interconnected by the anterior commissure. Regions remote from the temporal lobe may be related to seizure propagation and include positively and negatively loaded areas. These patterns, the covarying areas of the temporal pole and occipito-basal visual association cortices, for example, are related to known anatomic paths.

Sequential updating via dynamic hierarchical models: A Bayesian approach to longitudinal data analysis

Most statistical analysis, theory and practice, is concerned with static models; models with a proposed set of parameters whose values are fixed across observational units. Static models implicitly assume that the quantified relationships remain the same across the design space of the data. While this is reasonable under many circumstances this can be a dangerous assumption when dealing with sequentially ordered data. The mere passage of time always brings fresh considerations and the interrelationships among parameters, or subsets of parameters, may need to be continually revised. ^ When data are gathered sequentially dynamic interim monitoring may be useful as new subject-specific parameters are introduced with each new observational unit. Sequential imputation via dynamic hierarchical models is an efficient strategy for handling missing data and analyzing longitudinal studies. Dynamic conditional independence models offers a flexible framework that exploits the Bayesian updating scheme for capturing the evolution of both the population and individual effects over time. While static models often describe aggregate information well they often do not reflect conflicts in the information at the individual level. Dynamic models prove advantageous over static models in capturing both individual and aggregate trends. Computations for such models can be carried out via the Gibbs sampler. An application using a small sample repeated measures normally distributed growth curve data is presented. ^

Measurement of the TeV atmospheric muon charge ratio with the complete OPERA data set

The OPERA detector, designed to search for νμ → ντ oscillations in the CNGS beam, is located in the underground Gran Sasso laboratory, a privileged location to study TeV-scale cosmic rays. For the analysis here presented, the detector was used to measure the atmospheric muon charge ratio in the TeV region. OPERA collected chargeseparated cosmic ray data between 2008 and 2012. More than 3 million atmospheric muon events were detected and reconstructed, among which about 110000 multiple muon bundles. The charge ratio Rμ ≡ Nμ+/Nμ− was measured separately for single and for multiple muon events. The analysis exploited the inversion of the magnet polarity which was performed on purpose during the 2012 Run. The combination of the two data sets with opposite magnet polarities allowedminimizing systematic uncertainties and reaching an accurate determination of the muon charge ratio. Data were fitted to obtain relevant parameters on the composition of primary cosmic rays and the associated kaon production in the forward fragmentation region. In the surface energy range 1–20 TeV investigated by OPERA, Rμ is well described by a parametric model including only pion and kaon contributions to themuon flux, showing no significant contribution of the prompt component. The energy independence supports the validity of Feynman scaling in the fragmentation region up to 200 TeV/nucleon primary energy.

Water temperature measured in Independence Bay, Pisco, Peru

Independencia Bay can be considered as one of the most productive invertebratc fishing grounds worldwide. One of the most important exploited species is the scallop (Argopecten purpuratus) with strong catching fluctuations related to El Nino and La Nina events and to inadequate Management strategies. During strong warming periods annual landings reach up to 50000 t in an area of about 150 km**2 and during cold years they remain around 500 to 1000 t. This study analyses the changes in scallop landings at Independencia Bay observed during the last two decades and discusses the main factors affecting the scallop proliferations during the EI Nino events. In this way data on landings, sea surface temperature and those related to growth, reproduction, predation, mean density and oxygen concentration from published and unpublished Papers are used. The relationship between annual catches and average water temperature over the preceding reproductive period of the scallop over the past 20 year's period, showed that scallop production is affected positively only with strong EI Nino such as those of 1983 and 1998. Our review showed that the scallop stock proliferation can be traced to the combined effect of (1) an increase in reproductive output through an acceleration of gonad maturation and a higher spawning frequency; (2) a shortening of the larval period and an increase in larval survival; (3) an increase in the individual growth performance; (4) an increase in the juvenile and adult survival through reduction of predator biomass; (5) an increase in carrying capacity of the scallop banks due to elevated oxygen levels.