Factors Affecting Audit Quality in the 2007 UK Regulatory Environment: Perceptions of Chief Financial Officers, Audit Committee Chairs and Audit Engagement Partners

In line with global changes, the UK regulatory regime for audit and corporate governance has changed significantly since the Enron scandal, with an increased role for audit committees and independent inspection of audit firms. UK listed company chief financial officers (CFOs), audit committee chairs (ACCs) and audit partners (APs) were surveyed in 2007 to obtain views on the impact of 36 economic and regulatory factors on audit quality. 498 usable responses were received, representing a response rate of 36%. All groups rated various audit committee interactions with auditors among the factors most enhancing audit quality. Exploratory factor analysis reduces the 36 factors to nine uncorrelated dimensions. In order of extraction, these are: economic risk; audit committee activities; risk of regulatory action; audit firm ethics; economic independence of auditor; audit partner rotation; risk of client loss; audit firm size; and, lastly, International Standards on Auditing (ISAs) and audit inspection. In addition to the activities of the audit committee, risk factors for the auditor (both economic and certain regulatory risks) are believed to most enhance audit quality. However, ISAs and the audit inspection regime, aspects of the ‘standards-surveillance compliance’ regulatory system, are viewed as less effective. Respondents commented that aspects of the changed regime are largely process and compliance driven, with high costs for limited benefits, supporting psychological bias regulation theory that claims there is overconfidence that a useful regulatory intervention exists.

Illusory correlation in the remuneration of chief executive officers: It pays to play golf, and well

Illusory correlation refers to the use of information in decisions that is uncorrelated with the relevantcriterion. We document illusory correlation in CEO compensation decisions by demonstrating thatinformation, that is uncorrelated with corporate performance, is related to CEO compensation. We usepublicly available data from the USA for the years 1998, 2000, 2002, and 2004 to examine the relationsbetween golf handicaps of CEOs and corporate performance, on the one hand, and CEO compensationand golf handicaps, on the other hand. Although we find no relation between handicap and corporateperformance, we do find a relation between handicap and CEO compensation. In short, golfers earnmore than non-golfers and pay increases with golfing ability. We relate these findings to the difficultiesof judging compensation for CEOs. To overcome this and possibly other illusory correlations inthese kinds of decisions, we recommend the use of explicit, mechanical decision rules.

Nomination of Arnold G. Holz to be chief financial officer of NASA : hearing before the Committee on Commerce, Science, and Tranpsortation, United States Senate, One Hundred Third Congress, second session, April 13, 1994.

Shipping list no.: 94-0395-P.

Financial problems : are the agencies getting better? : hearing before the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, second session, July 28, 1994.

Shipping list no.: 95-0076-P.

Chief financial officer's report to management /

Description based on: [FY 1992]; title from cover.

A student journal for leading Chief Petty Officers.

"June 1982."

Twenty years of financial policy. A summary of the chief financial measures passed between 1842 and 1861, with a table of budgets.

Mode of access: Internet.

Nominations of John Hammerschmidt to be a member of the National Transportation Safety Board, Jeffrey Runge to be Administrator of the National Highway Traffic Safety Administration, Nancy Victory to be Assistant Secretary of Commerce for Communications and Information, and Otto Wolff to be Assistant Secretary of Commerce and Chief Financial Officer : hearing before the Committee on Commerce, Science, and Transportation, United States Senate, One Hundred Seventh Congress, first session, Wednesday, August 1, 2001.

Distributed to some depository libraries in microfiche.

Core competencies in financial management for information technology personnel implementing financial systems in the federal government.

A joint project of the Chief Financial Officers Council and the Joint Financial Management Improvement Program.

Consequences of financial restatements for auditors and top executives

This dissertation consists of three essays and investigates issues related to the impact of financial restatements on auditor change, shareholder actions, and executive turnover in the post-Sarbanes Oxley Act (SOX) period. For the first essay, we examined auditor change at 569 restatement firms and 5,605 control firms for 2004. We found that restatement announcements significantly increased the likelihood of auditor resignation and dismissal in the post-SOX period. The second essay examines shareholder voting on auditor ratifications in 2006 following restatement announcements by SEC registrants in 2005. The proportion of votes not supporting auditor ratification is low even in the presence of a restatement. However, we find that shareholders are more likely to vote against auditor ratification after a restatement when compared to votes at (a) films without restatements, or (b) restating firms in the preceding period. The third essay examines the consequences of financial restatements on the turnover of chief financial officers (CFO). We find that restatement announcements do significantly increase the likelihood of CFO turnover no matter whether the departure is voluntary or forced in nature. Also, the significant relationship is present even after controlling for the effect of CEO turnover.

STOCK EXCHANGE LISTING INDUCES SOPHISTICATION OF CAPITAL BUDGETING

This article compares capital budgeting techniques employed in listed and unlisted companies in Brazil. We surveyed the Chief Financial Officers (CFOs) of 398 listed companies and 300 large unlisted companies, and based on 91 respondents, the results suggest that the CFOs of listed companies tend to use less simplistic methods more often, for example: NPV and CAPM, and that CFOs of unlisted companies are less likely to estimate the cost of equity, despite being large companies. These findings indicate that stock exchange listing may require greater sophistication of the capital budgeting process.

Yritysten eroavaisuuksien vaikutukset johdon ohjausjärjestelmiin - tapaustutkimus

Johdon ohjausjärjestelmät koostuvat yksittäisistä järjestelmistä, jotka muodostavat yrityksen ohjausjärjestelmäkokonaisuuden. Yksittäiset järjestelmät ovat sekä konkreettisia, kuten budjetit, mutta myös käsitteellisempiä tekijöitä, kuten henkilöstön ohjaus. Jokaisella yrityksellä on oma ohjausjärjestelmäkokonaisuutensa, joka riippuu esimerkiksi yrityksen toimialasta, strategiasta ja koosta. Menestyäkseen yrityksen on löydettävä mahdollisimman toimiva ja yhteensopiva ohjausjärjestelmäkokonaisuus juuri kyseiselle yritykselle. Tämän tutkielman ensisijaisena tavoitteena on selvittää miten yritysten eroavaisuudet vaikuttavat johdon ohjausjärjestelmiin. Tutkielma tehdään selvittämällä ensin mitä johdon ohjausjärjestelmät ovat ja tämän jälkeen haastattelemalla erilaisten yritysten talousjohtajia niiden ohjausjärjestelmistä. Tämän jälkeen vertaillaan tuloksia hallitsevaan teoriaan ja yritysten ohjausjärjestelmiä toisiinsa. Tutkielmassa havaittiin selviä eroja yritysten ohjausjärjestelmien välillä.

Core competencies : accountants in the federal government.

"A Joint Project of the Chief Financial Officers Council and the Joint Financial Management Improvement Program."

Essays on risk-taking in corporate finance

This thesis consists of three independent essays on risk-taking in corporate finance. The first essay explores how community-level social capital (CSC), framed as a cultural characteristic of individuals born in different provinces of Italy, affects investment behavior in equity crowdfunding. Results show that investors born in high-CSC provinces invest more money in ventures characterized by an enhanced risk profile. Observed risk-taking is theoretically linked to higher generalized trust endowed to people born in high-CSC areas. The second essay focuses on how convexity of Chief Financial Officers’ stock options affects their hedging decisions in the oil and gas industry. Highly convex CFOs hedge less commodity price risk, even if the Chief Executive Officer’s incentives are consistent with a more conservative hedging strategy. Finally, the third essay is a systematic literature review on how different sources of compensation-based risk-taking incentives of Chief Executive Officers affect decision-making in corporate finance.