Earnings management and audit quality:stakeholders’ perceptions

This paper examines the perceptions of Libyan Commercial Banks’ (LCBs) stakeholders regarding the role of the external auditor in relation to earnings management (EM). A total of 28 semi-structured interviews were carried out with a range of LCB stakeholders comprising preparers of financial statements, users, regulators and academics. A questionnaire survey of stakeholders which yielded 102 Responses (response rate 53%) was also carried out. A variety of views were held which varied to some extent according to stakeholder group. A widely held perception amongst interviewees was that the auditor has the ability to detect EM practices but may not be able to prevent it. However questionnaire respondents were, in aggregate, more confident of the auditor’s ability to deter EM due to the influence of the audit report. The paper provides insights into stakeholders’ perceptions of the quality of bank audits. The findings are of particular relevance to regulators, and specifically, the Central Bank of Libya. Perceptions of audit quality raise questions about its guidance and regulations especially in connection with audit firm rotation. Perceptions of audit quality, and therefore, of the credibility of financial statements should be of interest to all stakeholders. The importance of the banking sector for society has been amply demonstrated in recent years. A well-functioning audit function is a key component of its regulation. To the best of our knowledge, this paper is the first to examine issues related to banks’ audit quality and audit firm rotation in Libya

Strong disorder RG approach – a short review of recent developments

The strong disorder RG approach for random systems has been extended in many new directions since our previous review of 2005 [F. Igloi, C. Monthus, Phys. Rep. 412, 277 (2005)]. The aim of the present colloquium paper is thus to give an overview of these various recent developments. In the field of quantum disordered models, recent progress concern infinite disorder fixed points for short-ranged models in higher dimensions d > 1, strong disorder fixed points for long-ranged models, scaling of the entanglement entropy in critical ground-states and after quantum quenches, the RSRG-X procedure to construct the whole set excited stated and the RSRG-t procedure for the unitary dynamics in many-body-localized phases, the Floquet dynamics of periodically driven chains, the dissipative effects induced by the coupling to external baths, and Anderson Localization models. In the field of classical disordered models, new applications include the contact process for epidemic spreading, the strong disorder renormalization procedure for general master equations, the localization properties of random elastic networks, and the synchronization of interacting non-linear dissipative oscillators. Application of the method for aperiodic (or deterministic) disorder is also mentioned