Audit market concentration and related regulatory measures

Audit markets are highly concentrated and such a situation might have negative consequences on competition, and thus, on price setting, on audit quality and on the functioning of markets. The European regulator recognized some causes for audit market concentration, identified a systemic risk and suggested joint audits and a mandatory rotation of audit firms to reduce concentration. Prominent concentration measures are concentration ratios, the Lorenz curve, the Gini-coefficient and the Herfindahl-Hirschman-Index. An empirical study on the concentration of German Prime Standard market for the period 2010 – 2013 revealed a high concentration which is quite stable over time and a narrow oligopoly with duopolistic tendencies. Nevertheless, competition could still work, e.g. due to the threat of market entrants. Moreover, given the fact that Big4 audit firms provide a higher audit quality, concentration may have positive effects. The mandatory audit firm rotation has a positive effect on auditor independence and a negative effect on auditor competence. This explains why related research output is inconclusive, i.e. the total effect on audit quality remains unclear. Moreover, a positive impact on competition is not ensured. Archival studies reveal that joint audits do not improve audit quality but increase audit costs. On the other hand, joint audits potentially reduce concentration. A combination between audit firm rotation and joint audits might be an optimal solution.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Percolation for the stable marriage of Poisson and Lebesgue with random appetites

Let $\Xi$ be a set of centers chosen according to a Poisson point process in $\mathbb R^d$. Consider the allocation of $\mathbb R^d$ to $\Xi$ which is stable in the sense of the Gale-Shapley marriage problem, with the additional feature that every center $\xi\in\Xi$ has a random appetite $\alpha V$, where $\alpha$ is a nonnegative scale constant and $V$ is a nonnegative random variable. Generalizing previous results by Freire, Popov and Vachkovskaia (\cite{FPV}), we show the absence of percolation when $\alpha$ is small enough, depending on certain characteristics of the moment of $V$.Comment: 12 pages. Final versio

Towards a Reliable Comparison and Evaluation of Network Intrusion Detection Systems Based on Machine Learning Approaches

Presently, we are living in a hyper-connected world where millions of heterogeneous devices are continuously sharing information in different application contexts for wellness, improving communications, digital businesses, etc. However, the bigger the number of devices and connections are, the higher the risk of security threats in this scenario. To counteract against malicious behaviours and preserve essential security services, Network Intrusion Detection Systems (NIDSs) are the most widely used defence line in communications networks. Nevertheless, there is no standard methodology to evaluate and fairly compare NIDSs. Most of the proposals elude mentioning crucial steps regarding NIDSs validation that make their comparison hard or even impossible. This work firstly includes a comprehensive study of recent NIDSs based on machine learning approaches, concluding that almost all of them do not accomplish with what authors of this paper consider mandatory steps for a reliable comparison and evaluation of NIDSs. Secondly, a structured methodology is proposed and assessed on the UGR'16 dataset to test its suitability for addressing network attack detection problems. The guideline and steps recommended will definitively help the research community to fairly assess NIDSs, although the definitive framework is not a trivial task and, therefore, some extra effort should still be made to improve its understandability and usability further

Evaluating EU policies on public services: a citizens´ perspective

This article evaluates EU policies on public services – particularly public network services - from the citizens´ point of view. It is first argued that citizens´ perceptions about these services are important because they are essential for quality of life, but also because they exhibit economic characteristics such as asymmetrical information, adverse selection and positive externalities. Changing EU policy on public services is synthesised and classified into two main phases in section two. Citizen satisfaction with public services as revealed through surveys from 1997 to 2007 is explored in the third section. In the discussion, the prospects for EU policy on public services are considered and, it is argued that, from the perspectives of subsidiarity and proportionality, policy towards strengthening the common market is being increasingly uploaded to the supranational level in the form of directives, whilst cohesion and redistribution policies are being downloaded to the national level or dealt with at the supranational level by “soft” instruments.Economics of public services; evaluation; citizen; consumer; satisfaction; privatization; liberalization; competition

A DSATUR-based algorithm for the Equitable Coloring Problem

This paper describes a new exact algorithm for the Equitable Coloring Problem, a coloring problem where the sizes of two arbitrary color classes differ in at most one unit. Based on the well known DSatur algorithm for the classic Coloring Problem, a pruning criterion arising from equity constraints is proposed and analyzed. The good performance of the algorithm is shown through computational experiments over random and benchmark instances.Fil: Méndez-Díaz, Isabel. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales. Departamento de Computación; ArgentinaFil: Nasini, Graciela Leonor. Universidad Nacional de Rosario. Facultad de Ciencias Exactas, Ingeniería y Agrimensura; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Severin, Daniel Esteban. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de Rosario. Facultad de Ciencias Exactas, Ingeniería y Agrimensura; Argentin

Explaining Telecoms and Electricity Internationalization in the European Union: A Political Economy Perspective

One consequence of the liberalization of certain services in the European Union was that a number of formerly inward-looking incumbents in telecommunications and electricity rapidly transformed themselves into some of the world’s leading Multinationals. However, the precise relationship between liberalization and incumbent internationalization is contested. This article tests three persuasive arguments derived from the political economy literature on this relationship. The first claims that those incumbents most exposed to domestic liberalization would internationalise most. The second asserts the opposite: incumbents operating where liberalization was restricted could exploit monopolistic rents to finance their aggressive internationalisation. The third argument claims that a diversity of paths will be adopted by countries and incumbents vis-à-vis liberalization and internationalization. Using correlation and cluster analysis of the sample of all major EU telecoms and electricity incumbent Multinationals evidence is found in favour of the third hypothesis. Internationalization as a response to liberalization took diverse forms in terms of timing and extent and this is best explained using a country, sector and firm logic.Electricity, European Union, Internationalization, Liberalization, Telecommunications, Political Economy, Multinational Corporations, National Champions

Logic Negation with Spiking Neural P Systems

Nowadays, the success of neural networks as reasoning systems is doubtless. Nonetheless, one of the drawbacks of such reasoning systems is that they work as black-boxes and the acquired knowledge is not human readable. In this paper, we present a new step in order to close the gap between connectionist and logic based reasoning systems. We show that two of the most used inference rules for obtaining negative information in rule based reasoning systems, the so-called Closed World Assumption and Negation as Finite Failure can be characterized by means of spiking neural P systems, a formal model of the third generation of neural networks born in the framework of membrane computing.Comment: 25 pages, 1 figur