ABSTRACT
The objectives of this study are to (1) propose a new budgetary control mechanism, previously not investigated in academia, i.e., an undisclosed time budget (UTB) and (2) test whether an UTB ...could be implemented as a pragmatic solution to decrease the magnitude of auditors' underreporting of chargeable time (URT). Over the past few decades, auditing researchers have relied on survey research to document the causes and negative consequences of URT. However, research has yet to experimentally test solutions to the URT problem. We define, propose, and find evidence that firms could utilize an UTB to reduce URT. In contrast to typical disclosed time budgets (where all parties concerned with a budget know the details), an UTB informs auditors of the existence of a time budget target, but does not disclose the specifics of budgeted task times. We predict and find support to suggest that while UTBs do not reduce auditors' perceptions of URT's moral intensity, UTBs do preventively reduce auditors' ability and perceived need to underreport. That is, a UTB increases self-efficacy (confidence in the appropriateness of the time spent on a task) and removes the external anchor of a disclosed time budget. By removing the external anchor, auditors assume a budget that resembles their actual task time is appropriate, which translates into a reduction in URT magnitude. Finally, our results also allow us to suggest that a UTB mitigates the negative reporting effects of tight time budget pressure.
SYNOPSIS This study reports the results of a survey of 107 audit partners from large public accounting firms that investigates and compares partner perceptions of Public Company Accounting Oversight ...Board (PCAOB) inspections' and Internal Quality Reviews (IQRs): (1) predictability, (2) conduct, (3) reviewer qualifications and behavior, and (4) effects (i.e., on audits, partners, and firms). A majority of partners can or try to predict the year of both reviews and perceive that, relative to PCAOB inspections, IQR reviewers have a better understanding of firms' audit methodologies, IQRs focus more on whether firms follow their methodology, and IQRs examine more audit areas. In addition, partners believe that PCAOB inspectors are more focused on finding deficiencies than are IQR reviewers, and that IQR feedback is more timely and helpful for improving audit quality. Both reviews are perceived to impact professional reputation; however, partners perceive that PCAOB inspections increase their firms' litigation risk more so than do IQRs. Finally, less experienced partners perceive reviews as more invasive and as posing more consequences than do more experienced partners. We provide credible, informed perceptions of partners directly involved in both PCAOB inspections and IQRs (which heretofore have not been examined directly by practitioner or academic research) that should be beneficial to accounting researchers, practicing auditors, and regulatory bodies interested in understanding the perceived effects and effectiveness of PCAOB inspections and IQRs.
Background: Sugar kelp (Saccharina latissima, formerly known as Laminaria saccharina) is a brown seaweed which naturally occurs in the North Atlantic. Seaweeds may be one of the last natural food ...resources abundantly available. They are known to contain many compounds which may have additional functional benefits. This edible seaweed is characterized by high content of nutrients including carbohydrates and polyphenols, which are recognized antioxidants. Because their natural environment is a 3% saline solution, they are very resistant to mild extraction methods. However, extracts from solvent extractions usually contain residual solvents, making them unacceptable for high quality functional foods and high end cosmetics. The objective of this study was to test the biological properties of three extracts from sugar kelp (Saccharina latissima).Methods: Cold water, hot water, and ethanol: water (70:30 v/v) extracts were prepared. Total Carbohydrate Content (TCC) was determined by the phenol – sulphuric acid method and values were expressed as mg of fucose/g of dry extract. Total Polyphenol Content (TPC) was determined and expressed as mg of Gallic Acid Equivalent (GAE)/100g of dry extract. Oxygen Radical Absorbance Capacity (ORAC) assay was performed for all extracts and values were expressed as µM of Trolox® Equivalent/g of dry extract. Human leukemia monocytic cell line (THP-1) was used to investigate the bioactivity of Saccharina extracts. Extracts were applied to PMA differentiated THP-1 cells. Cytotoxicity of derived extracts was assessed by light microscopy followed by XTT proliferation assay. Enzyme-linked Immunosorbent assays (ELISA) were performed to determine secretion of interleukin – 10 (IL-10), tumor necrosis factor – α (TNF-α) and interleukin – 6 (IL-6).Results: The cold water extract exhibited very toxic properties toward macrophages and was thereby excluded from the experimental proceedings with use of the macrophages. Among all the tested extracts, the hot water extract was richest in sugars (682±243 mg fucose/g dry extract) and polyphenols (96.5±5.6 mg GAE/g dry extract), which was correlated to the determined ORAC values (1686±99 μM TE/g dry extract). The addition of hot water and ethanol extracts at concentrations 100 μg/ml triggered secretion of pro-inflammatory cytokine TNF-α suggesting immunomodulatory properties of Saccharina extracts toward macrophages. Conclusions: The present study suggests that carbohydrate enriched extracts from Icelandic edible seaweed Saccharina latissima have antioxidant and immunomodulatory properties towards human THP–1 derived macrophages. The carbohydrate and polyphenol correlated with ORAC values confirming antioxidant properties of the derived extracts. The hot water extract affected the pro–inflammatory (TNF–α) and anti–inflammatory (IL–10) cytokine secretion in macrophages, suggesting their bioactivity through immunomodulatory actions and can be considered for practical applications in functional foods and cosmetics.Keywords: Seaweeds; Saccharina latissima; bioactivity; antioxidants; immunomodulation
ABSTRACT
Accounting estimates are highly subjective and multiple estimation alternatives often exist for a single account. When addressing audit-related adjustments with clients, auditors must decide ...whether to discuss all possible estimation alternatives or approach the client with only a single, auditor-preferred estimation alternative. In an experiment with experienced CFOs and controllers, we find clients with relatively higher status (operationalized as those with a CPA license) take more aggressive financial reporting positions when the auditor approaches the client with multiple adjustment options based on various estimation alternatives. Our study provides the first evidence that client status is a significant factor in auditor-client negotiations. We also demonstrate how auditors' approach to client negotiations involving multiple allowable estimation alternatives can influence audit quality.
SUMMARY Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5 (AS5) allows external auditors (EAs) to rely on the internal audit function (IAF) when the internal audit activities ...meet certain criteria and the EAs would find efficiencies in relying on their work (PCAOB 2007). This paper reviews the extant literature on the EAs' reliance on IAF, identifies gaps in the literature, and proposes a series of research questions aimed at closing these gaps. We focus our review on research pertaining to how environmental factors and IAF-specific factors influence initial EAs' reliance decisions, the nature and extent of EAs' reliance on IAF, and the observable outcomes as a result of EAs' reliance decisions. Our review finds that the environment in which EAs must make a reliance decision is complex—involving several factors that must be considered simultaneously. Moreover, an evolving set of auditing standards introduces several necessary intermediary judgments that the EAs must process before, and during, reliance on the IAF. In addition, our review indicates that we continue to know very little about how, and to what extent, EAs are currently evaluating IAF's quality factors. Similarly, while we find that the nature and extent of EAs' reliance on IAF is influenced by account risk, inherent risk, and IAF sourcing, how the EAs choose task environments (e.g., revenue recognition versus payroll), and the types of tests to be relied upon within these task environments, is not completely understood. Finally, we find that there is a paucity of research concerning the effects of EAs' reliance on IAF in terms of external audit quality.
SUMMARY
This study examines the work environment in the audit division of large public accounting firms. Based on 18 semi-structured interviews (eight partners and ten staff auditors currently or ...recently employed by large public accounting firms), we find that the interviewees cite several positive aspects of auditing careers including the people, intellectual stimulation, challenge, and responsibility. However, they also cite significant negatives, including PCAOB regulation, stress, and hours. None of the staff interviewees plans to stay in public accounting long term, and while all of the partners would recommend public accounting to others, most focused only on public accounting as a place to start a career. The findings raise a number of concerns regarding the profession's ability to sustain the quality of its human capital, especially since there are no signs of a radically improved work environment in public accounting that may appeal to Millennials. We conclude by discussing possible improvements in the public accounting work environment that would address the issues raised in the interviews.
This study reports the result of an experiment examining two aspects of the audit context that auditors likely do not suspect can influence audited account balances: the magnitude of an audit ...difference and the presence of a prior client concession. Negotiation theory shows that negotiators' initial positions (e.g., clients' unaudited balances) as well as feelings of reciprocity created by prior negotiations serve to create expectations for the current negotiation and, in turn, affect the outcomes of such negotiations. Our results show that the magnitude of an audit difference involving an estimate (i.e., difference between client's account balance and the auditor's independent estimate) as well as the presence of a prior client concession influence auditors' negotiation expectations. Specifically, auditors proposed smaller adjustments when the magnitude of the audit difference was high and when the client conceded on an audit issue prior to resolving the difference in estimates. These manipulations similarly influence the negotiated outcome, and this influence is fully mediated by the auditor's initial negotiation position.
Metabolic models can provide a mechanistic framework to analyze information-rich omics data sets, and are increasingly being used to investigate metabolic alternations in human diseases. An ...expression of the altered metabolic pathway utilization is the selection of metabolites consumed and released by cells. However, methods for the inference of intracellular metabolic states from extracellular measurements in the context of metabolic models remain underdeveloped compared to methods for other omics data. Herein, we describe a workflow for such an integrative analysis emphasizing on extracellular metabolomics data. We demonstrate, using the lymphoblastic leukemia cell lines Molt-4 and CCRF-CEM, how our methods can reveal differences in cell metabolism. Our models explain metabolite uptake and secretion by predicting a more glycolytic phenotype for the CCRF-CEM model and a more oxidative phenotype for the Molt-4 model, which was supported by our experimental data. Gene expression analysis revealed altered expression of gene products at key regulatory steps in those central metabolic pathways, and literature query emphasized the role of these genes in cancer metabolism. Moreover, in silico gene knock-outs identified unique control points for each cell line model, e.g., phosphoglycerate dehydrogenase for the Molt-4 model. Thus, our workflow is well-suited to the characterization of cellular metabolic traits based on extracellular metabolomic data, and it allows the integration of multiple omics data sets into a cohesive picture based on a defined model context.
Mollusc shells provide a major defense against predators, but changes in shell properties may alter the effectiveness of this defense. An endolithic boring sponge,
Cliona sp., infests many shells of ...the gastropod
Littorina littorea in the southern Gulf of Maine.
Cliona excavates ramifying chambers within the shell but does not affect tissue directly. Field surveys showed that 22–83% of snails were infected with
Cliona at the Isles of Shoals; the prevalence of infection declined with increasing tidal height and increased with increasing snail size. We also investigated potential costs to
L. littorea of infection by
Cliona. L. littorea appeared to respond to sponge boring by laying down additional material on the interior of the shell, which reduced interior shell volume and was associated with smaller dry body mass for a given shell length. Biomechanical studies showed that sponge boring weakened shells: the mean compressive force required to break severely bored
L. littorea was 29% lower than that required to break unbored snails.
Cliona infection increased vulnerability of snails to predation by the crab,
Cancer borealis Stimpson, which attacks molluscs by crushing or peeling shells. Unlike uninfected snails, predation risk did not decline with increasing size in bored
L. littorea. In addition, bored snails were generally crushed by the crab, regardless of snail size, whereas large unbored snails could only be attacked by peeling. Thus, costs to
L. littorea of
Cliona boring included the following: (1) increased vulnerability to predation due to structural changes in the shell; (2) reduction or elimination of the size-refuge advantage; and (3) a potential decrease in growth and fecundity due to diversion of energy to supplemental interior layers to the shell and the consequent reduction in interior shell living space and body mass.
The Λ (Λ¯) hyperon polarization along the beam direction has been measured in Au+Au collisions at sNN=200 GeV, for the first time in heavy-ion collisions. The polarization dependence on the ...hyperons' emission angle relative to the elliptic flow plane exhibits a second harmonic sine modulation, indicating a quadrupole pattern of the vorticity component along the beam direction, expected due to elliptic flow. The polarization is found to increase in more peripheral collisions, and shows no strong transverse momentum (pT) dependence at pT greater than 1 GeV/c. The magnitude of the signal is about 5 times smaller than those predicted by hydrodynamic and multiphase transport models; the observed phase of the emission angle dependence is also opposite to these model predictions. In contrast, the kinematic vorticity calculations in the blast-wave model tuned to reproduce particle spectra, elliptic flow, and the azimuthal dependence of the Gaussian source radii measured with the Hanbury Brown–Twiss intensity interferometry technique reproduce well the modulation phase measured in the data and capture the centrality and transverse momentum dependence of the polarization signal.
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