Do industry specialists and business risk auditors enhance audit reporting accuracy?.

A number of prior studies have examined audit reporting quality using size (Big 8/6/5/4) as a proxy for quality (i.e. Lennox, 1999b; Francis and Krishnan, 1999; Weber and Willenborg, 2003). In this paper we move beyond the traditional definition of a high quality auditor, and investigate whether enhanced industry knowledge or an increased focus on business risk auditing methodologies improve audit reporting accuracy. In addition, we examine whether industry specialists and business risk auditors have a comparative advantage in judging the adequacy of mitigating management actions implemented by financially distressed companies. Using a sample of US companies from manufacturing industries (SIC 20-39) that went bankrupt between 1998-2001, we do not find evidence supporting that specialist auditors are more likely to issue a going concern opinion for companies that subsequently go bankrupt. However, our evidence does indicate that specialists are not fooled by operating initiatives (whereas non-specialists are). Interestingly and counter to our expectations, we find that audit firms using a business risk methodology are less likely to issue a going–concern opinion for a firm that subsequently goes bankrupt. Further, our evidence also suggests that business risk auditors may be 'fooled' by short term operating efforts to reduce financial distress. Finally, we also find very strong evidence that auditors, irrespective of their type, are 'fooled' into not issuing a going concern opinion for clients that subsequently go bankrupt when the client is planning on raising cash in the short term.Behavior; Control; Cost; Exchange; Information; Negotiations; Performance; Power; Research; Theory; Law; Effects; Trade; Flows; Country; Intensity; Imports; Import; United States; Trade liberalization; Industry; Industries; Business; Risk; Reporting; Studies; Quality; Size; Knowledge; Auditing; Comparative advantage; Management; Companies; Manufacturing; Firms; Planning;

On the home market effect: theory and empirical evidence

This paper addresses the question of how to discriminate between the H-O paradigm and the C-H-O paradigm of international trade. The test is based on the home-biased expenditure. The model predicts a positive relationshipp between a country''s share of world''s output (in any particular sector) and the country''s share of world''s home-biased expenditure if and only if the sector is characterize4d by IRS and monopolistic competition. The Empirical implementation showed an important but not overwhelming presence of the relationship. Specifically, 55% of the industrial activity could be attributed to the H-O paradigm while 45% could be attributed to the C-H-O paradigm

Territorial Patterns of Innovation in Europe

This paper investigates over the way in which regions innovate. The conceptual framework departs from the simple idea that scientific activities equates knowledge, assuming that the presence of local knowledge produced by research centers, universities and firms was a necessary and sufficient condition for increasing the innovative capacities in local firms, fed by local spillovers. In particular, the paradigmatic jump in interpreting regional innovation processes lies in a conceptual framework interpreting not a single phase of the innovation process, but the different modes of performing the different phases of the innovation process, highlighting the context conditions (internal and external to the region) that accompany each innovation pattern. The paper conceptually identifies different territorial patterns of innovation, and empirically test their existence in Europe. Interesting results emerge from the European territory, witnessing the existence of large differences in the territorial patterns of innovation. These results strongly support normative suggestions towards thematically/regionally focused innovation policies.

The Master's Degree: Basic Preparation for Professional Practice

published or submitted for publicatio

(WP 2018-05) Specialization, Fragmentation, and Pluralism in Economics

This paper investigates whether specialization in research is causing economics to become an increasingly fragmented and diverse discipline with a continually rising number of niche-based research programs and a declining role for dominant cross-science research programs. It opens by framing the issue in terms of centrifugal and centripetal forces operating on research in economics, and then distinguishes descriptive from normative pluralism. It reviews recent research regarding the JEL code and the economics’ J. B. Clark Award that points towards rising specialization and fragmentation of research in economics. It then reviews five related arguments that might explain increasing specialization and fragmentation in economics: (i) Smith’s early division of labor view, (ii) Kuhn’s later thinking about the importance of specialization, (iii) Heiner’s behavioral burden of knowledge argument, (iv) Ross innovation-diffusion analysis and Arthur’s theory of technological change as determinants of specialization in science, and (v) the effects of space and culture or internationalization on innovation appropriation. The paper then discusses what descriptive pluralism implies about normative pluralism, and makes a case for multidisciplinarity over interdisciplinarity as a basis for arguments promoting pluralism. The paper closes with brief comments on the issue of specialization and pluralism in the wider world outside economics and science

THE EFFECT OF SURPLUS FREE CASH FLOW AND AUDIT QUALITY ON EARNINGS MANAGEMENT (Empirical Study on Manufacturing Companies Listed on The Indonesia Stock Exchange from 2013-2016)

This study aims to investigate the influence of surplus free cash flow on earnings management, as well as the interaction between audit quality and surplus free cash flow. The dependent variable of this study is earnings management, with surplus free cash flow and audit quality as the independent variables. Audit quality is measured using two measurements, audit firm size and auditor’s industry specialization. This study also uses a control variable which is cash flows from operations. The data used in this study is secondary data obtained from financial statements of 500 manufacturing companies listed on the Indonesia Stock Exchange from 2013-2016 as the sample. This study uses purposive sampling as the sampling method. The method used in this study to examine the interactions between the variables is multiple regression analysis. The findings in this study indicate that surplus free cash flow has positive significant influence on earnings management. Audit firm size is found to have positive significant effect on earnings management, while auditor’s industry specialization do not have a significant effect on earnings management. However, the interactions between both audit quality measurements and surplus free cash flow have significant effect on earnings management

When is a container a comonad?

Abbott, Altenkirch, Ghani and others have taught us that many parameterized datatypes (set functors) can be usefully analyzed via container representations in terms of a set of shapes and a set of positions in each shape. This paper builds on the observation that datatypes often carry additional structure that containers alone do not account for. We introduce directed containers to capture the common situation where every position in a data-structure determines another data-structure, informally, the sub-data-structure rooted by that position. Some natural examples are non-empty lists and node-labelled trees, and data-structures with a designated position (zippers). While containers denote set functors via a fully-faithful functor, directed containers interpret fully-faithfully into comonads. But more is true: every comonad whose underlying functor is a container is represented by a directed container. In fact, directed containers are the same as containers that are comonads. We also describe some constructions of directed containers. We have formalized our development in the dependently typed programming language Agda

Individual emergence in contextual analysis

Located within the tradition of Hermeneutic Dialectics (HD) this paper offers an approach which can further an analysis of a fit between information and organizational systems. Drawn upon Information Systems Development projects a relationship between theory and practice is aided through a multi-disciplinary approach to sense making activity. Using a contemporary version of contextual analysis to understand a way in which individuals construct adapt and create meaning from their environment offers a route to improve a systems analysis process. This type of enquiry into contextual dependencies of knowledge creation can help direct a development of systems that have the intention to serve specific organizational actors and their needs. Combining methods outside of a traditional polar divide, sense making research undertaken within a systems thinking arena can enrich understanding by complementing qualitative and / or quantitative analysis with reflective depth. Drawing together interdisciplinary strands through a critical systems thinking approach offers new levels of professionalism for computer- and management-, practitioners or researchers in the 21st Century