Determinants of voluntary audit and voluntary full accounts in micro- and non-micro small companies in the UK

This is an Author's Accepted Manuscript of an article published in Accounting and Business Research, 42(4), 441 - 468, 2012, copyright Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/00014788.2012.667969.This study investigates the link between the auditing and filing choices made by a sample of 592 small private companies, which includes 419 micro-companies. It examines decisions made in connection with the 2006 accounts following UK's adoption of the maximum EU size thresholds in 2004, and the impact of the proposed Directive on the annual accounts of micro-companies. The research extends the model of cost, management and agency factors associated with voluntary audit, and develops a complementary model for voluntary full accounts. The results show the benefits of placing full audited accounts on public record that outweigh the costs for a significant proportion of companies. In non-micro small companies, voluntary audit is determined by cost and agency factors, whereas in micro-companies it is driven by cost, management and agency factors. In both groups, the predictors of voluntary full accounts include management and agency factors, and choosing voluntary audit is one of the key factors. The study provides models that can be tested in other jurisdictions to provide evidence of the needs of micro-companies, and the discussion of the methodological challenges for small company researchers in the UK makes further contribution to the literature

Cool Response: The SEC & Corporate Climate Change Reporting

Climate change and its regulation pose significant risks and opportunities to investors and corporations. The nearly 30 billion in insured losses from Hurricane Sandy alone dramatically underscore this reality. New climate-related federal and state regulations in recent years also present risks and opportunities to companies in the electric power, coal, oil & gas,transportation and insurance sectors. Investors seek greater transparency and disclosure on the business risks of climate change as a means to protect and increase shareholder value.The key regulator that leads federal efforts to provide investors with information about corporaterisks and opportunities is the U.S. Securities and Exchange Commission (SEC). At the heart of the SEC's mission is the protection of investors through meaningful corporate reporting:The laws and rules that govern the securities industry in the United States derive from a simpleand straightforward concept: all investors, whether large institutions or private individuals,should have access to certain basic facts about an investment prior to buying it, and so longas they hold it. To achieve this, the SEC requires public companies to disclose meaningfu lfinancial and other information to the public. Only through the steady flow of timely,comprehensive, and accurate information can people make sound investment decisions. The SEC recognized the financial impacts of climate change when it issued Interpretive Guidance on climate disclosure in February 2010, responding to over 100 institutional investors representing 7 trillion who supported the Guidance. The Guidance outlines expectations from companies in reporting on "material" regulatory, physical, and indirect risks and opportunities related to climate change.This report examines the state of such corporate reporting and associated SEC comment letters on climate change. It also provides recommendations for the SEC and companies on improving the quality of reporting. The report examines (1) the state of S&P 500 reporting onclimate disclosure and (2) SEC comment letters addressing climate disclosure from 2010 to the end of 2013

Audit exemption and the demand for voluntary audit: A comparative study of the UK and Denmark

This is the accepted version of the following article: Collis, J. (2010), Audit Exemption and the Demand for Voluntary Audit: A Comparative Study of the UK and Denmark. International Journal of Auditing, 14: 211–231, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/j.1099-1123.2010.00415.x/abstract.This study investigates the sufficiency of turnover as a surrogate for demand for voluntary audit and compares the determinants in the UK and Denmark. Empirical data for the study were drawn from government surveys of the directors of small private companies in both countries, which were based on the same research instrument, Bivariate tests support the hypothesised effects of turnover and a range of firm-specific factors suggested by economic rationality and agency theory. The main contribution of the study is the finding that turnover alone is not a sufficient surrogate for the costs and benefits of audit. The main predictors are turnover and a slightly different combination of management and agency factors in each country. The study provides a model that can be tested in other jurisdictions and its findings should be of interest to the accountancy profession and national regulators planning to introduce or revise audit exemption for small companies

Closing Evidence Gaps on the Prevalence and Harms of New Psychoactive Substances in Scotland

This paper considers the state of knowledge on New Psychoactive Substances (NPS) in Scotland, with a focus on prevalence and harms and puts forward proposals which may assist in closing existing evidence gaps

The Nonprofit Research Collaborative: November 2010 Fundraising Survey

In this ninth annual survey of nonprofit organizations (charities and foundations), respondents answered questions comparing their organizations' total contributions in the first nine months of 2010 compared with the same period in 2009. Nearly the same percentage of organizations reported that giving was up as those that reported giving was down. Of the about 2,500 responses, 36 percent said giving rose and 37 percent said giving fell, while the other 26 percent reported that total giving remained the same.

Mechanism Design for Demand Response Programs

Demand Response (DR) programs serve to reduce the consumption of electricity at times when the supply is scarce and expensive. The utility informs the aggregator of an anticipated DR event. The aggregator calls on a subset of its pool of recruited agents to reduce their electricity use. Agents are paid for reducing their energy consumption from contractually established baselines. Baselines are counter-factual consumption estimates of the energy an agent would have consumed if they were not participating in the DR program. Baselines are used to determine payments to agents. This creates an incentive for agents to inflate their baselines. We propose a novel self-reported baseline mechanism (SRBM) where each agent reports its baseline and marginal utility. These reports are strategic and need not be truthful. Based on the reported information, the aggregator selects or calls on agents to meet the load reduction target. Called agents are paid for observed reductions from their self-reported baselines. Agents who are not called face penalties for consumption shortfalls below their baselines. The mechanism is specified by the probability with which agents are called, reward prices for called agents, and penalty prices for agents who are not called. Under SRBM, we show that truthful reporting of baseline consumption and marginal utility is a dominant strategy. Thus, SRBM eliminates the incentive for agents to inflate baselines. SRBM is assured to meet the load reduction target. SRBM is also nearly efficient since it selects agents with the smallest marginal utilities, and each called agent contributes maximally to the load reduction target. Finally, we show that SRBM is almost optimal in the metric of average cost of DR provision faced by the aggregator

The role of tax practitioners in tax reporting : a signalling game

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