Internal audit department characteristics/activities and audit fees : some evidence from Hong Kong firms

This study provides preliminary support for the notion that internal audit function assists in reducing external audit effort and fees. Data on internal audit characteristics and activities are obtained from survey respondents of Hong Kong companies and audit fee model data are acquired from their annual reports. The results of this study suggest that the external auditor of firms in Hong Kong rely on the internal audit function and subsequently charge a lower fee. Lower external audit fees are associated with a larger internal audit department and certain activities carried out by the internal audit. Specifically, lower external audit fees are associated with more internal audit effort spent on activities relating to financial statements, systems development and maintenance, operating efficiency and effectiveness, fraud investigations and unlimited access to internal auditors’ working papers. The results of this study suggest that the contribution of the internal audit may substitute for some substantive external auditing processes and lower monitoring costs.

The role of the rule of law in virtual communities

There is a severe tendency in cyberlaw theory to delegitimize state intervention in the governance of virtual communities. Much of the existing theory makes one of two fundamental flawed assumptions: that communities will always be best governed without the intervention of the state; or that the territorial state can best encourage the development of communities by creating enforceable property rights and allowing the market to resolve any disputes. These assumptions do not ascribe sufficient weight to the value-laden support that the territorial state always provides to private governance regimes, the inefficiencies that will tend to limit the development utopian communities, and the continued role of the territorial state in limiting autonomy in accordance with communal values. In order to overcome these deterministic assumptions, this article provides a framework based upon the values of the rule of law through which to conceptualise the legitimacy of the private exercise of power in virtual communities. The rule of law provides a constitutional discourse that assists in considering appropriate limits on the exercise of private power. I argue that the private contractual framework that is used to govern relations in virtual communities ought to be informed by the values of the rule of law in order to more appropriately address the governance tensions that permeate these spaces. These values suggest three main limits to the exercise of private power: that governance is limited by community rules and that the scope of autonomy is limited by the substantive values of the territorial state; that private contractual rules should be general, equal, and certain; and that, most importantly, internal norms be predicated upon the consent of participants.

L'Impatto delle Condizioni Interne ed Esterne sul Ruolo del Cda : un'Analisi Empirica sulle Grandi Imprese Italiane [The impact of internal and external contingencies on board tasks performance : an empirical investigation of Italian companies]

Il Consiglio di Amministrazione (CdA) è il principale organo di governo delle aziende. La letteratura gli attribuisce tre ruoli: controllo, indirizzo strategico e collegamento con l’ambiente (networking). Precedenti studi empirici hanno analizzato se un Consiglio di Amministrazione è attivo o meno in tutti e tre i ruoli in un dato momento. Nel presente lavoro, invece, si propone un approccio «contingente» e si analizzano i ruoli svolti dal CdA al variare delle condizioni interne (aziende in crisi o di successo) ed esterne (aziende in settori competitivi o regolamentati).. L’indagine empirica è stata condotta su un campione di 301 imprese italiane di grandi dimensioni. I risultati supportano la tesi iniziale secondo cui le condizioni interne ed esterne incidono sul ruolo svolto dal CdA. In particolare i risultati evidenziano che il CdA non svolge sempre tutti e tre i ruoli nello stesso momento, ma esso si concentra sul ruolo o sui ruoli che assumono grande importanza nella situazione in cui si trova l’azienda. Con riferimento alle condizioni interne, nelle imprese in crisi il CdA è attivo in tutti e tre i ruoli, mentre in quelle di successo prevale un orientamento verso la funzione strategica. Nelle aziende che operano in settori competitivi il ruolo di controllo è più pressante mentre nei settori regolamentati prevale una funzione di networking.

Internal market orientation and market-oriented behaviours

Purpose: The purpose of this empirical paper is to investigate internal marketing from a behavioural perspective. The impact of internal marketing behaviours, operationalised as an internal market orientation (IMO), on employees’ marketing and other in-role behaviours (IRB) were examined. ---------- Design/methodology/approach: Survey data measuring IMO, market orientation and a range of constructs relevant to the nomological network in which they are embedded were collected from the UK retail managers. These were tested to establish their psychometric properties and the conceptual model was analysed using structural equations modelling, employing a partial least squares methodology. ---------- Findings: IMO has positive consequences for employees’ market-oriented and other IRB. These, in turn, influence marketing success. Research limitations/implications – The paper provides empirical support for the long-held assumption that internal and external marketing are related and that organisations should balance their external focus with some attention to employees. Future research could measure the attitudes and behaviours of managers, employees and customers directly and explore the relationships between them. ---------- Practical implications: Firm must ensure that they do not put the needs of their employees second to those of managers and shareholders; managers must develop their listening skills and organisations must become more responsive to the needs of their employees. ---------- Originality/value: The paper contributes to the scarce body of empirical support for the role of internal marketing in services organisations. For researchers, this paper legitimises the study of internal marketing as a route to external market success; for managers, the study provides quantifiable evidence that focusing on employees’ wants and needs impacts their behaviours towards the market.

Retracing the Roots and Ideals of Confucian Principles of Governance: the Art of Regulating Governance without Legal Rules in Chinese Societies

Confucius was and still is one of the most eminent Chinese philosophers. Such is the importance of Confucius’s teachings; it had influenced all aspects of social life in Chinese societies. In the post-Enron, post-Worldcom, and post-Global Financial Crisis era there are raising doubts in the mantra of the so-called conventional wisdom about law and economic order. Whilst many recent publications offered solutions to those problems like advocating for more laws, rules or reforms in regulatory institutions to enhance the regulation of corporate governance. What Confucius advocated was a non-legal, social mode of regulation based on moral ideals that should be embedded into the minds of every person. Whilst this is an ancient concept from primitive societies, its relevance and merits could be seen in modern Chinese societies like Hong Kong. In essence, Confucian principles of governance build on relational and paternalistic order based on moral ideals.

Using Association Rules to Solve the Cold-Start Problem in Recommender Systems

Recommender systems are widely used online to help users find other products, items etc that they may be interested in based on what is known about that user in their profile. Often however user profiles may be short on information and thus it is difficult for a recommender system to make quality recommendations. This problem is known as the cold-start problem. Here we investigate using association rules as a source of information to expand a user profile and thus avoid this problem. Our experiments show that it is possible to use association rules to noticeably improve the performance of a recommender system under the cold-start situation. Furthermore, we also show that the improvement in performance obtained can be achieved while using non-redundant rule sets. This shows that non-redundant rules do not cause a loss of information and are just as informative as a set of association rules that contain redundancy.

A review of rationale for allocating costs and payments in producing and supplying public sector information PART A of 2 Parts – Chapters 1, 2 and 3) 13 March 2011 version

This work reviews the rationale and processes for raising revenue and allocating funds to perform information intensive activities that are pertinent to the work of democratic government. ‘Government of the people, by the people, for the people’ expresses an idea that democratic government has no higher authority than the people who agree to be bound by its rules. Democracy depends on continually learning how to develop understandings and agreements that can sustain voting majorities on which democratic law making and collective action depends. The objective expressed in constitutional terms is to deliver ‘peace, order and good government’. Meeting this objective requires a collective intellectual authority that can understand what is possible; and a collective moral authority to understand what ought to happen in practice. Facts of life determine that a society needs to retain its collective competence despite a continual turnover of its membership as people die but life goes on. Retaining this ‘collective competence’ in matters of self-government depends on each new generation: • acquiring a collective knowledge of how to produce goods and services needed to sustain a society and its capacity for self-government; • Learning how to defend society diplomatically and militarily in relation to external forces to prevent overthrow of its self-governing capacity; and • Learning how to defend society against divisive internal forces to preserve the authority of representative legislatures, allow peaceful dispute resolution and maintain social cohesion.

Workplace sexual harassment 30 years on : a review of the literature

Despite its proscription in legal jurisdictions around the world, workplace sexual harassment (SH) continues to be experienced by many women and some men in a variety of organizational settings. The aims of this review article are threefold: first, with a focus on workplace SH as it pertains to management and organizations, to synthesize the accumulated state of knowledge in the field; second, to evaluate this evidence, highlighting competing perspectives; and third, to canvass areas in need of further investigation. Variously ascribed through individual (psychological or legal consciousness) frameworks, sociocultural explanations and organizational perspectives, research consistently demonstrates that, like other forms of sexual violence, individuals who experience workplace SH suffer significant psychological, health- and job-related consequences. Yet they often do not make formal complaints through internal organizational procedures or to outside bodies. Laws, structural reforms and policy initiatives have had some success in raising awareness of the problem and have shaped rules and norms in the employment context. However, there is an imperative to target further workplace actions to effectively prevent and respond to SH.

Reliable representations for association rules

Association rule mining has contributed to many advances in the area of knowledge discovery. However, the quality of the discovered association rules is a big concern and has drawn more and more attention recently. One problem with the quality of the discovered association rules is the huge size of the extracted rule set. Often for a dataset, a huge number of rules can be extracted, but many of them can be redundant to other rules and thus useless in practice. Mining non-redundant rules is a promising approach to solve this problem. In this paper, we first propose a definition for redundancy, then propose a concise representation, called a Reliable basis, for representing non-redundant association rules. The Reliable basis contains a set of non-redundant rules which are derived using frequent closed itemsets and their generators instead of using frequent itemsets that are usually used by traditional association rule mining approaches. An important contribution of this paper is that we propose to use the certainty factor as the criterion to measure the strength of the discovered association rules. Using this criterion, we can ensure the elimination of as many redundant rules as possible without reducing the inference capacity of the remaining extracted non-redundant rules. We prove that the redundancy elimination, based on the proposed Reliable basis, does not reduce the strength of belief in the extracted rules. We also prove that all association rules, their supports and confidences, can be retrieved from the Reliable basis without accessing the dataset. Therefore the Reliable basis is a lossless representation of association rules. Experimental results show that the proposed Reliable basis can significantly reduce the number of extracted rules. We also conduct experiments on the application of association rules to the area of product recommendation. The experimental results show that the non-redundant association rules extracted using the proposed method retain the same inference capacity as the entire rule set. This result indicates that using non-redundant rules only is sufficient to solve real problems needless using the entire rule set.

Discovery & effective use of quality association rules in multi-level datasets

In today’s electronic world vast amounts of knowledge is stored within many datasets and databases. Often the default format of this data means that the knowledge within is not immediately accessible, but rather has to be mined and extracted. This requires automated tools and they need to be effective and efficient. Association rule mining is one approach to obtaining knowledge stored with datasets / databases which includes frequent patterns and association rules between the items / attributes of a dataset with varying levels of strength. However, this is also association rule mining’s downside; the number of rules that can be found is usually very big. In order to effectively use the association rules (and the knowledge within) the number of rules needs to be kept manageable, thus it is necessary to have a method to reduce the number of association rules. However, we do not want to lose knowledge through this process. Thus the idea of non-redundant association rule mining was born. A second issue with association rule mining is determining which ones are interesting. The standard approach has been to use support and confidence. But they have their limitations. Approaches which use information about the dataset’s structure to measure association rules are limited, but could yield useful association rules if tapped. Finally, while it is important to be able to get interesting association rules from a dataset in a manageable size, it is equally as important to be able to apply them in a practical way, where the knowledge they contain can be taken advantage of. Association rules show items / attributes that appear together frequently. Recommendation systems also look at patterns and items / attributes that occur together frequently in order to make a recommendation to a person. It should therefore be possible to bring the two together. In this thesis we look at these three issues and propose approaches to help. For discovering non-redundant rules we propose enhanced approaches to rule mining in multi-level datasets that will allow hierarchically redundant association rules to be identified and removed, without information loss. When it comes to discovering interesting association rules based on the dataset’s structure we propose three measures for use in multi-level datasets. Lastly, we propose and demonstrate an approach that allows for association rules to be practically and effectively used in a recommender system, while at the same time improving the recommender system’s performance. This especially becomes evident when looking at the user cold-start problem for a recommender system. In fact our proposal helps to solve this serious problem facing recommender systems.