Designing innovative business models with a framework that promotes experimentation

Purpose – Business models to date have remained the creation of management, however, it is the belief of the authors that designers should be critically approaching, challenging and creating new business models as part of their practice. This belief portrays a new era where business model constructs become the new design brief of the future and fuel design and innovation to work together at the strategic level of an organisation. Design/methodology/approach – The purpose of this paper is to explore and investigate business model design. The research followed a deductive structured qualitative content analysis approach utilizing a predetermined categorization matrix. The analysis of forty business cases uncovered commonalities of key strategic drivers behind these innovative business models. Findings – Five business model typologies were derived from this content analysis, from which quick prototypes of new business models can be created. Research limitations/implications – Implications from this research suggest there is no “one right” model, but rather through experimentation, the generation of many unique and diverse concepts can result in greater possibilities for future innovation and sustained competitive advantage. Originality/value – This paper builds upon the emerging research and exploration into the importance and relevance of dynamic, design-driven approaches to the creation of innovative business models. These models aim to synthesize knowledge gained from real world examples into a tangible, accessible and provoking framework that provide new prototyping templates to aid the process of business model experimentation.

The National Road Safety Partnership Program providing a pathway for any business/organisation to create a positive road safety culture

The National Road Safety Partnership Program (NRSPP) is an industry-led collaborative network which aims to support Australian businesses in developing a positive road safety culture. It aims to help businesses to protect their employees and the public, not only during work hours, but also when their staff are ‘off-duty’. How do we engage and help an organisation minimise work-related vehicle crashes and their consequences both internally, and within the broader community? The first step is helping an organisation to understand the true cost of its road incidents. Larger organisations often wear the costs without knowing the true impact to their bottom line. All they perceive is the change in insurance or vehicle repairs. Understanding the true cost should help mobilise a business’s leadership to do more. The next step is ensuring the business undertakes an informed, structured, evidence-based pathway which will guide them around the costly pitfalls. A pathway based around the safe system approach with buy-in at the top which brings the workforce along. The final step, benchmarking, allows the organisation to measure and track its change. This symposium will explore the pathway steps for organisations using NRSPP resources to become engaged in road safety. The 'Total Cost of Risk' calculator has been developed by Zurich, tested in Europe by Nestle and modified by NRSPP for Australia. This provides the first crucial step. The next step is a structured approach through the Workplace Road Safety Guide using experts and industry to discuss the preferred safe system approach which can then link into the national Benchmarking Project. The outputs from the symposium can help frame a pathway for organisations to follow through the NRSPP website.

The Effects of Nicotine on the Regulation of Neuronal Alpha7 Nicotinic Acetylcholine Receptors and Intracellular Signalling Pathways

Nicotine, the addictive compound of tobacco products, exerts its effects in the brain by binding to neuronal acetylcholine nicotinic receptors (nAChRs). The aim of the present study was to increase the knowledge of nicotine s complex effects, the focus being on homomeric alpha7-nAChRs that are widely expressed in the brain. Nicotinic regulation of differential signalling molecules including transcriptional regulators was also studied. We found that the number of alpha7-nAChRs is increased in specific brain regions in mice, in a time-dependent manner after chronic oral nicotine administration. Our results suggest that in addition to alpha4beta2-nAChRs, the other major nAChR subtype expressed in the brain, the number of alpha7-nAChRs is affected by chronic presence of nicotine. We suggest that when studying the long-term effects of nicotine, the duration on administration is of great importance. Next, we observed that nicotine exposure induces accumulation of cAMP in cell cultures expressing nAChRs. Furthermore, nicotine-induced alpha7-nAChR upregulation was potentiated by treatments enhancing cAMP-signalling, suggesting a role for cAMP in the upregulation process. Protein kinase C (PKC) was found essential for the basal regulation of alpha7-nAChR number. The nicotine-evoked alpha7-nAChR upregulation could be further increased by PKC overexpression. Thirdly, the effects of nicotine on dopamine and cAMP regulated phosphoprotein (DARPP-32) were characterised in rat brain. The results show that DARPP-32 is regulated by both acute and long-term nicotine treatment in the striatal subdivisions. The effect of acute nicotine is dose-dependent and the three striatal regions display differential sensitivities to nicotine. Chronic nicotine is also able to regulate DARPP-32 signalling with prominent effect seen in the nucleus accumbens (NAc), suggesting a role for DARPP-32 in the mediation of long-term effects of nicotine. Finally, the regulation of transcription factors Elk-1 and FosB/deltaFosB by nicotine was investigated. We found that Elk-1 is activated by acute nicotine selectively in the NAc core and hippocampal area CA1, whereas acute nicotine does not affect FosB/deltaFosB. Long-term intermittent or continuous nicotine increases the level of total Elk-1 in the same brain regions as acute nicotine. FosB/deltaFosB is also affected by chronic nicotine. Thus, similarly to other drugs of abuse, nicotine regulates transcriptional regulators Elk-1 and FosB/deltaFosB. These results bring further support for a common mechanism underlying the development of addiction. Nicotine s positive effects on learning and memory might involve the transcription factor Elk-1 based on the changes seen in the hippocampus, the key area in cognitive functions.

An account and analysis of the implementation of various ebook business models at QUT, Australia

QUT (Queensland University of Technology) is a leading university based in the city of Brisbane, Queensland, Australia and is a selectively research intensive university with 2,500 higher degree research students and an overall student population of 45,000 students. The transition from print to online resources is largely completed and the library now provides access to 450,000 print books, 1,000 print journals, 600,000 ebooks, 120,000 ejournals and 100,000 online videos. The ebook collection is now used three times as much as the print book collection. This paper focuses on QUT Library’s ebook strategy and the challenges of building and managing a rapidly growing collection of ebooks using a range of publishers, platforms, and business and financial models. The paper provides an account of QUT Library’s experiences in using Patron Driven Acquisition (PDA) using eBook Library (EBL); the strategic procurement of publisher and subject collections by lease and outright purchase models, the more recent transition to Evidence Based Selection (EBS) options provided by some publishers, and its piloting of etextbook models. The paper provides an in-depth analysis of each of these business models at QUT, focusing on access verses collection development, usage, cost per use, and value for money.

A genetic variant of MDM4 influences regulation by multiple microRNAs in prostate cancer

The oncogene MDM4, also known as MDMX or HDMX, contributes to cancer susceptibility and progression through its capacity to negatively regulate a range of genes with tumour-suppressive functions. As part of a recent genome-wide association study it was determined that the A-allele of the rs4245739 SNP (A>C), located in the 3'-UTR of MDM4, is associated with an increased risk of prostate cancer. Computational predictions revealed that the rs4245739 SNP is located within a predicted binding site for three microRNAs (miRNAs): miR-191-5p, miR-887 and miR-3669. Herein, we show using reporter gene assays and endogenous MDM4 expression analyses that miR-191-5p and miR-887 have a specific affinity for the rs4245739 SNP C-allele in prostate cancer. These miRNAs do not affect MDM4 mRNA levels, rather they inhibit its translation in C-allele-containing PC3 cells but not in LNCaP cells homozygous for the A-allele. By analysing gene expression datasets from patient cohorts, we found that MDM4 is associated with metastasis and prostate cancer progression and that targeting this gene with miR-191-5p or miR-887 decreases in PC3 cell viability. This study is the first, to our knowledge, to demonstrate regulation of the MDM4 rs4245739 SNP C-allele by two miRNAs in prostate cancer, and thereby to identify a mechanism by which the MDM4 rs4245739 SNP A-allele may be associated with an increased risk for prostate cancer.

Measuring attitudes in translation: a study of Nokia business reports

Background Contemporary Finnish, spoken and written, reveals loanwords or foreignisms in the form of hybrids: a mixture of Finnish and foreign syllables (alumiinivalua). Sometimes loanwords are inserted into the Finnish sentence in their raw form just as they are found in the source language (pulp, after sales palvelu). Again, sometimes loanwords are calques, which appear Finnish but are spelled and pronounced in an altogether foreign manner (Protomanageri, Promenadi kampuksella). Research Questions What role does Finnish business translation play in the migration of foreignisms into Finnish if we consider translation "as a construct of solutions determined by the ideological constraints and conflicts characterizing the target culture" (Robyns 1992: 212)? What attitudes do the Finns display toward the presence of foreignisms in their language? What socio-economic or ideological conditions (Bassnett 1994: 321) are responsible for these attitudes? Are these conditions dynamic? What tools can be used to measure such attitudes? This dissertation set out to answer these and similar questions. Attitudes are imperialist (where otherness is both denied and transformed), defensive (where otherness is acknowledged, transformed, and vilified), transdiscursive (a neutral attitude to both otherness and transformation), or finally defective (where alien migration is acknowledged and "stimulated") (Robyns 1994: 60). Methodology The research method follows Rose's schema (1984: 8): (a) take an existing theory, (b) develop from it a proposition specific enough to be tested, (c) devise a scheme that tests this proposition, (d) carry through the scheme in practice, (e) draw up results and discuss conclusions in relation to the original theory. In other words, the method attempts an explanation of a Finnish social phenomenon based on systematic analyses of translated evidence (Lewins 1992: 4) whereby what really matters is the logical sequence that connects the empirical data to the initial research questions raised above and, ultimately to its conclusion (Yin 1984: 29). Results This research found that Finnish translators of the Nokia annual reports used a foreignism whenever possible such as komponentin instead of rakenneosa, or investoida instead of sijoittaa, and often without any apparent justification (Pryce 2003: 203-12) more than the translator's personal preference. In the old documents (minutes of meetings of the Board of Directors of Osakeyhtio H. Saastamoinen, Ltd. dated 5 July 1912-1917, a NOPSA booklet (1932), Enzo-Gutzeit-Tornator Oy document (1938), Imatra Steel Oy Annual Report 1964, and Nokia Oy Annual Report 1946), foreignisms under Haugen's (1950: 210-31) Classification #1 occurred an average of 0.6 times, while in the new documents (Nokia 1998 translated Annual Reports) they occurred an average of 6.5 times. That big difference, suggests transdiscursive and defective attitudes in Finnish society toward the other. In the 1850s, Finnish attitudes toward alien persons and cultures were hardened, intolerant and prohibitive because language politics were both nascent and emerging, and Finns adopted a defensive stance (Paloposki 2002: 102 ff) to protect their cultural and national treasures such as language and folklore. Innovation The innovation here is that no prior doctoral level research measured Finnish attitudes toward foreignisms using a business translation approach. This is the first time that Haugen's classification has been modified and applied in target language analysis. It is hoped that this method would be replicated in similar research in the future. Applications For practical applications, researchers with interest in languages, language development, language influences, language ideologies, and power structures that affect national language policies will find this thesis useful, especially the model for collecting, grouping, and analyzing foreignisms that has been demonstrated here. It is intended to document for posterity current attitudes of Finns toward the other as revealed in business translations from 1912-1964, and in 1998. This way, future language researchers would be able to explore a time-line of Finnish language development and attitudes toward the other. Communication firms may also find this research interesting. In future, could the model we adopted be used to analyze literary texts or religious texts for example? Future Trends Though business documents show transdiscursive attitudes, other segments of Finnish society may show defensive or imperialist attitudes. When the ideology of industrialization changes in the future, will Finnish attitudes toward the other change as well? Will it then be possible to use the same kind of analytical tools to measure Finnish attitudes? More broadly, will linguistic change continue in the same direction of transdiscursive attitudes, or will the change slow down or even reverse into xenophobic attitudes? Is this our model culture-specific or can it be used in the context of other cultures? Conclusion There is anger against foreignisms in Finland as newspaper publications and television broadcasts show, but research shows that a majority of Finns consider foreignisms and the languages from which they come as sources of enrichment for Finnish culture (Laitinen 2000, Eurobarometer series 41 of July 1994, 44 of Spring 1996, 50 of Autumn 1998). Ideologies of industrialization and globalization in Finland have facilitated transdiscursive tendencies. When Finland's political ideology was intolerant toward foreign influences in the 1850s because Finland was in the process of consolidating her nascent country and language, attitudes toward the importation of loanwords also became intolerant. Presently, when industrialization and globalization became the dominant ideologies, we see a shift in attitudes toward transdiscursive tendencies. Ideology is usually unseen and too often ignored by translation researchers. However, ideology reveals itself as the most powerful factor affecting language attitudes in a target culture. Key words Finnish, Business Translation, Ideology, Foreignisms, Imperialist Attitudes, Defensive Attitudes, Transdiscursive Attitudes, Defective Attitudes, the Other, Old Documents, New Documents.

Voice, deliberation, resistance and persuasion through participatory journalism business models

The pervasive use of the World Wide Web by the general population has created a cultural shift throughout the world. It has enabled more people to share more information about more events and issues than was possible before its general use. As a consequence, it has transformed traditional news media’s approach to almost every aspect of journalism, with many organisations restructuring their philosophy and practice to include a variety of participatory spaces/forums where people are free to engage in deliberative dialogue about matters of public importance. This paper draws from an international collective case study that showcases various approaches to participatory online news journalism during the period 1997–2011 (Adams, 2013). The research finds differences in the ways in which public service, commercial, and independent news media give voice to the public, and ultimately in their approach to journalism’s role as the Fourth Estate––one of the key institutions of democracy. The work is framed by the notion that journalism in democratic societies has a crucial role in ensuring citizens are informed and engaged with public affairs. An examination of four media models, OhmyNews International, News Corp Australia (formerly News Limited), the Guardian and the British Broadcasting Corporation (BBC), showcases the various approaches to participatory online news journalism and how each provides different avenues for citizen engagement. Semistructured in-depth interviews with some of the key senior journalists and editors provide specific information on comparisons between the distinctive practices in each of their employer organisations.

Mitigating undesirable impacts in the marine environment: A review of market-based management measures

Internationally, marine biodiversity conservation objectives are having an increasing influence on the management of commercial fisheries. While this is largely being implemented through Marine Protected Areas (MPAs) other management measures, such as market based instruments (MBIs), have proved to be effective at managing target species catch in fisheries and reducing environmental impacts in industries such as mining and tourism. Market-based management measures aim to mitigate the impacts of activities by better aligning the incentives their participants face with the objectives of management, changing their behavior as a consequence. In this paper, we review the potential of MBIs as management tools to mitigate undesirable environmental impacts associated with commercial fishing. Where they exist, examples of previous applications are described and the factors that influence their applicability and effectiveness are discussed. Several fishing methods and impacts are considered and suggest that whilst no single approach is most appropriate in all circumstances either replacing or complementing existing management arrangements with MBIs has the potential to improve environmental performance. This has a number of implications. From the environmental perspective they should enable levels of undesirable impacts such as damage to sensitive habitat or the bycatch of protected species of turtles, marine mammals, and seabirds to be reduced. The increased flexibility MBIs allow industry when developing solutions also has the potential to reduce costs to both the industry and managers, improving the cost-effectiveness of regulation as a result. Further, in the increasingly relevant case of MPAs the need for publicly funded compensation, often paid to industry when vessels are excluded from grounds, may also be significantly reduced if improved environmental performance makes it possible for some industry members to continue operating.

Metsäpirulainen : Liikemies Erik Johan Längman (1799-1863) talousjärjestelmän murroksessa

The Forest devil. Businessman Erik Johan Längman (1799 1863) in the transition of economic system In Finnish historiography, Erik Johan Längman (1799-1863) bears a bad reputation of his own level: a mean, profit-seeking businessman who did not care too much about methods in his operations. Although little known, Längman has been praised as one of the pioneers of modern industry in the Grand Duchy of Finland, which belonged to the Russian Empire. From the mid 1830s Längman owned iron mill and several sawmills around the country. The growing demand of the markets in the 1830s, especially in Great Britain, marked a strong stimulus to Finnish lumber industry. At the same time claims for stricter rule over the sawmill industry were raised by high officials. The momentum of the conflict, the Forest Act of 1851, brought an end to illegal overproduction. In this biography, particular emphasis is laid on the entrepreneurial behaviour of Längman, but also on the effect the entrepreneurs had on the Crown s policies. On the other hand, how did the limitations imposed by the Crown guide the actions of the sawmill owners? The solutions adopted by the sawmill owners and the manoeuvring of the government are in a constant dialogue in this study. The Finnish sawmill industry experienced a major change in its techniques and methods of acquiring timber during the 1830s. Längman particularly, with his acquisition organisation, was able to find and reach faraway forests with unexpected results. The official regulating system with its strict producing quotas couldn t follow the changes. When the battle against the sawmill industry really started on, in 1840, it didn t happen for the benefit of iron industry, as argued previously, but to save Crown forests from depletion. After the mid 1840s Längman and the leader of the Finnish nationalistic movement, J. V. Snellman questioned the rationality of the entire regulation system and in doing so they also posed a threat against the aristocratic power. The influential but now also badly provoked chairman of the economic division of senate, Lars Gabriel von Haartman, accused the sawmill-owners harder than ever and took the advantage of the reactionary spirit of imperial Russia to launch the state forest administration. Längman circumvented the conditions of privileges, felled Crown forests illegally and accusations were brought against him for destroying his competitors. The repeated conflicts spoke primarily about a superior business idea and organisational ability. Although Längman spent his last years mostly abroad he still had interests in Finnish timber business when the liberation of sawmill-industry was established, in 1861. Surprisingly, the antagonism around the Crown forests continued, probably even more heated.

Transcriptional regulation of a pineapple polyphenol oxidase gene and its relationship to blackheart.

Two genes encoding polyphenol oxidase (PPO) were isolated from pineapple (Ananas comosus[L.] Merr. cv. Smooth Cayenne). Sequence analyses showed that both contained a single intron and encoded typical chloroplast-localized PPO proteins, the sequences of which corresponded to two pineapple PPO cDNAs, PINPPO1 and PINPPO2, recently described by Stewart et al. (2001). Southern blot analyses suggested that pineapple contained only two PPO genes. Analysis of expression of PINPPO1 promoter GUS fusion constructs showed this promoter had a low basal activity and was cold- and wound-inducible, consistent with known mRNA expression profiles. Striking homologies to gibberellin response complexes (GARC) were observed in sequences of both the PINPPO1 and PINPPO2 promoters. Transient assays in mature pineapple fruit and stable expression in transgenic tobacco showed that PINPPO1 promoter-GUS fusions were indeed gibberellin (GA) responsive. A role for the element within the putative GARCs in mediating GA-responsiveness of the PINPPO1 promoter was confirmed by mutational analysis. PINPPO2 was also shown to be GA-responsive by RT-PCR analysis. Mutant PINPPO1 promoter-GUS fusion constructs, which were no longer GA-inducible, showed a delayed response to cold induction in pineapple fruit in transient assays, suggesting a role for GA in blackheart development. This was supported by observations that exogenous GA3 treatment induced blackheart in the absence of chilling. Sequences showing homology to GARCs are also present in some PPO promoters in tomato, suggesting that GA regulates PPO expression in diverse species.

Across the Oceans : Development of Overseas Business Information Transmission, 1815-1875

Earlier studies have shown that the speed of information transmission developed radically during the 19th century. The fast development was mainly due to the change from sailing ships and horse-driven coaches to steamers and railways, as well as the telegraph. Speed of information transmission has normally been measured by calculating the duration between writing and receiving a letter, or between an important event and the time when the news was published elsewhere. As overseas mail was generally carried by ships, the history of communications and maritime history are closely related. This study also brings a postal historical aspect to the academic discussion. Additionally, there is another new aspect included. In business enterprises, information flows generally consisted of multiple transactions. Although fast one-way information was often crucial, e.g. news of a changing market situation, at least equally important was that there was a possibility to react rapidly. To examine the development of business information transmission, the duration of mail transport has been measured by a systematic and commensurable method, using consecutive information circles per year as the principal tool for measurement. The study covers a period of six decades, several of the world's most important trade routes and different mail-carrying systems operated by merchant ships, sailing packets and several nations' steamship services. The main sources have been the sailing data of mail-carrying ships and correspondence of several merchant houses in England. As the world's main trade routes had their specific historical backgrounds with different businesses, interests and needs, the systems for information transmission did not develop similarly or simultaneously. It was a process lasting several decades, initiated by the idea of organizing sailings in a regular line system. The evolution proceeded generally as follows: originally there was a more or less irregular system, then a regular system and finally a more frequent regular system of mail services. The trend was from sail to steam, but both these means of communication improved following the same scheme. Faster sailings alone did not radically improve the number of consecutive information circles per year, if the communication was not frequent enough. Neither did improved frequency advance the information circulation if the trip was very long or if the sailings were overlapping instead of complementing each other. The speed of information transmission could be improved by speeding up the voyage itself (technological improvements, minimizing the waiting time at ports of call, etc.) but especially by organizing sailings so that the recipients had the possibility to reply to arriving mails without unnecessary delay. It took two to three decades before the mail-carrying shipping companies were able to organize their sailings in an optimal way. Strategic shortcuts over isthmuses (e.g. Panama, Suez) together with the cooperation between steamships and railways enabled the most effective improvements in global communications before the introduction of the telegraph.

Regulation of Gonadotropin-Releasing Hormone (GnRH)-Receptor Gene Expression in Tilapia: Effect of GnRH and Dopamine

The present work was designed to study certain aspects of the endocrine regulation of gonadotropin-releasing hormone receptor (GnRH-R) in the pituitary of the teleost fish tilapia. A GnRH-R was cloned from the pituitary of hybrid tilapia (taGnRH-R) and was identified as a typical seven-transmembrane receptor. Northern blot analysis revealed a single GnRH-R transcript in the pituitary of approximately 2.3 kilobases. The taGnRH-R mRNA levels were significantly higher in females than in males. Injection of the salmon GnRH analog (sGnRHa; 5–50 μg/kg) increased the steady-state levels of taGnRH-R mRNA, with the highest response recorded at 25 μg/kg and at 36 h. At the higher dose of sGnRHa (50 μg/kg), taGnRH-R transcript appeared to be down-regulated. Exposure of tilapia pituitary cells in culture to graded doses (0.1–100 nM) of seabream (sbGnRH = GnRH I), chicken II (cGnRH II), or salmon GnRH (sGnRH = GnRH III) resulted in a significant increase in taGnRH-R mRNA levels. The highest levels of both LH release and taGnRH-R mRNA levels were recorded after exposure to cGnRH II and the lowest after exposure to sbGnRH. The dopamine-agonist quinpirole suppressed LH release and mRNA levels of taGnRH-R, indicating an inhibitory effect on GnRH-R synthesis. Collectively, these data provide evidence that GnRH in tilapia can up- regulate, whereas dopamine down-regulates, taGnRH-R mRNA levels.

Business process performance mining with staged process flows

Existing process mining techniques provide summary views of the overall process performance over a period of time, allowing analysts to identify bottlenecks and associated performance issues. However, these tools are not de- signed to help analysts understand how bottlenecks form and dissolve over time nor how the formation and dissolution of bottlenecks – and associated fluctua- tions in demand and capacity – affect the overall process performance. This paper presents an approach to analyze the evolution of process performance via a notion of Staged Process Flow (SPF). An SPF abstracts a business process as a series of queues corresponding to stages. The paper defines a number of stage character- istics and visualizations that collectively allow process performance evolution to be analyzed from multiple perspectives. The approach has been implemented in the ProM process mining framework. The paper demonstrates the advantages of the SPF approach over state-of-the-art process performance mining tools using two real-life event logs publicly available.

A fuzzy logic based dynamic wave model inversion algorithm for canal regulation

A fuzzy logic based centralized control algorithm for irrigation canals is presented. Purpose of the algorithm is to control downstream discharge and water level of pools in the canal, by adjusting discharge release from the upstream end and gates settings. The algorithm is based on the dynamic wave model (Saint-Venant equations) inversion in space, wherein the momentum equation is replaced by a fuzzy rule based model, while retaining the continuity equation in its complete form. The fuzzy rule based model is developed on fuzzification of a new mathematical model for wave velocity, the derivational details of which are given. The advantages of the fuzzy control algorithm, over other conventional control algorithms, are described. It is transparent and intuitive, and no linearizations of the governing equations are involved. Timing of the algorithm and method of computation are explained. It is shown that the tuning is easy and the computations are straightforward. The algorithm provides stable, realistic and robust outputs. The disadvantage of the algorithm is reduced precision in its outputs due to the approximation inherent in the fuzzy logic. Feed back control logic is adopted to eliminate error caused by the system disturbances as well as error caused by the reduced precision in the outputs. The algorithm is tested by applying it to water level control problem in a fictitious canal with a single pool and also in a real canal with a series of pools. It is found that results obtained from the algorithm are comparable to those obtained from conventional control algorithms.

Social audit failure: Legal liability of external auditors

In this chapter, we look at the step beyond reporting, to the external audit or assurance function. The role of any audit engagement is to provide a professional opinion on a set of financial or non-financial assertions reported by an organization's management, based on an agreed evaluative framework. Any such opinion is not a guarantee that the underlying report is free from fraud or misstatement. Where an audit opinion on financial statements is incorrect, this is referred to as an audit failure. Specifically, the textbook definition of audit failure has two components: that the financial statements contain a serious error and that the auditor has failed to detect the error due to the auditor's failure during the audit process.