Client Selectivity Among Mid-Sized Auditing Firms: Evidence From The Post-Sox Audit Market Realignment

Considerable realignment in the audit market occurred in the wake of the Sarbanes-Oxley Act of 2002, with many clients switching from a Big 4 to a non-Big 4 auditor. We examine a sample of 212 former Big 4 clients who switched to either a mid-sized auditing firm (i.e., BDO Siedman, Crowe Horwath, Grant Thornton and McGladrey) or a small auditing firm. We consider reasons why clients may prefer a mid-sized firm rather than a small firm (called “client demand” characteristics) and reasons why auditors may be willing to accept an audit engagement (called “auditor supply” characteristics). Among client demand characteristics, we find that clients are more likely to engage a mid-sized auditing firm when the client is larger, has higher asset turnover, and has foreign operations. From an auditor supply perspective, we find that a mid-sized auditing firm is more likely to accept the client if the client is willing to pay higher audit fees and uses the auditor for non-audit services. Higher financial leverage could be seen from either a client demand or auditor supply perspective. From a client demand perspective, higher financial leverage would make clients prefer mid-sized auditors, as these clients’ needs for financing could lead them to seek a more “brand-name” auditor to enhance their credibility with banks and other creditors. From an auditor supply perspective, auditors may prefer to avoid clients with higher leverage, which reflects financial riskiness. These financially risky clients may result in adverse reputational and/or legal costs for the auditing firm. We find that clients with higher leverage are less likely to engage a mid-sized CPA firm. These results suggest that mid-sized auditors are somewhat selective in the clients they are willing to accept

What can we learn from B→a1(1260)(b1(1235))π(K)B\to a_1(1260)(b_1(1235))\pi(K) decays?

We investigate the $B\to a_1(1260)(b_1(1235))\pi(K)$ decays under the factorization scheme and find many discrepancies between theoretical predictions and the experimental data. In the tree dominated processes, large contributions from color-suppressed tree diagrams are required in order to accommodate with the large decay rates of $B^-\to a_1^0\pi^-$ and $B^-\to a_1^-\pi^0$. For $\bar B^0\to (a_1^+, b_1^+)K^-$ decays which are both induced by $b\to s$ transition, theoretical predictions on their decay rates are larger than the data by a factor of 2.8 and 5.5, respectively. Large electro-weak penguins or some new mechanism are expected to explain the branching ratios of $B^-\to b_1^0K^-$ and $B^-\to a_1^-\bar K^0$. The soft-collinear-effective-theory has the potential to explain large decay rates of $B^-\to a_1^0\pi^-$ and $B^-\to a_1^-\pi^0$ via a large hard-scattering form factor $\zeta_J^{B\to a_1}$. We will also show that, with proper charming penguins, predictions on the branching ratios of $\bar B^0\to (a_1^+, b_1^+)K^-$ can also be consistent with the data.Comment: 16 pages, no figur

The Mandatory Bid Rule Under China\u27s Takeover Law: A Comparative and Empirical Perspective

China initially transplanted the mandatory bid rule (MBR) from the United Kingdom (U.K.) in the early 1990s but significantly amended it in 2006 to allow the use of partial bids, as well as full bids or general bids, to discharge the MBR duty. This amendment makes the MBR in China deviate from its place of origin both in the books and in action. This paper analyses the similarities and differences between the Chinese MBR and its counterparts in the U.K. and Japan. In doing so, it empirically investigates how the Chinese-style MBR has been applied in practice by examining all relevant cases during the first ten-year period of 2007 to 2016 after the amendment. The study finds that mandatory general bids mainly appeared in cases of indirect takeovers, negotiated takeovers, and privatizations, with a high non-enforcement rate (including legal circumvention and illegal violations); mandatory partial bids were made in order to acquire or consolidate the control of the target company with a low non-enforcement rate. As such, the Chinese MBR generally adheres to the British model of mandatory general bids but gradually diverges from it and converges with the Japanese model of mandatory partial bids. This paper explains the research results by reference to China’s political and economic context and puts forward reform suggestions

The Macroeconomic Effects of Public Debt: An Empirical Analysis of Evidence from Canada

Public debt refers to the amount of money which a particular country owes to the lenders either inside the country or outside the country. The lenders might be the individuals, businesses or even governments of the other countries. It might also be called as national debt or sovereign debt. Several types are associated with public debt such as domestic debt, external debt and the total debt. Public debt has critical relations with different macroeconomic factors such as economic growth, price levels and exchange rate. In this context, the current study has been conducted with the motive to explore the impact casted by public domestic debt, public external debt and total debt on the macroeconomic factors i.e. economic growth and general price level. As the study has been conducted in the context of Canada, therefore the researcher collected secondary and time series data for Canada. The collected data comprised the time of 28 years. The data regarding the variables of the study was analyzed by using different techniques and tools so that the objective of the study can be fulfilled. The results obtained from the analysis provide information that PDD has negative impact on the economic growth and positive impact on price level in short run as well. In addition, the impact of PED and TD on economic growth is positive only for shorter run and in longer run, this result is not applicable. However, the impact of PED and TD on price levels is too ambiguous to draw any conclusion

37 - Does the Quality or Quantity of Friendships Improve Emotions?

Does the Quality or Quantity of Friendships Improve Emotions? Friendship is defined by researchers as a reciprocal, mutual, voluntary relationship with strong emotional bonds (Rubin, Bukowski, & Bowker, 2015). Having close friends during adolescence promotes a subjective sense of well-being (Jose, 2015). However, previous research on friendship has failed to clarify the differential effect of friendship quality and the total amount of friends on positive and negative emotions, particularly in Chinese culture. The goal of the current study was to examine the effect of friendship quality and the amount of friends on positive and negative emotions among Chinese adolescents. In order to do this, we collected data from 674 adolescents in Central China. The amount of friends was identified by using peer-nominations and the quality of friendships was measured by using a self-report measure of security, satisfaction, intimacy, helping and trust. In addition, positive and negative emotions were assessed using a self-report measure. Regression analysis was used to analyze the effect of friendship quality and the amount of friends on emotions. Results showed that the amount of friends (β = .082, p \u3c .05), satisfaction with friends (β = .123, p \u3c .05), and intimacy between friends (β = .173, p \u3c .05) were significant predictors of positive emotions, F (3, 670) = 21.22, p \u3c .01. Security (β = -.097, p \u3c .05) was a significant predictor of negative emotions, F (1, 672) = 6.39, p \u3c .01. The discussion focuses on friendships in Chinese culture and its implications for adolescents’ subjective well-being and social skills interventions. Keywords: friendship quality, Chinese culture, adolescents, emotions, amount of friend

Coherent control of photocurrent in a strongly scattering photoelectrochemical system

A fundamental issue that limits the efficiency of many photoelectrochemical systems is that the photon absorption length is typically much longer than the electron diffusion length. Various photon management schemes have been developed to enhance light absorption; one simple approach is to use randomly scattering media to enable broadband and wide-angle enhancement. However, such systems are often opaque, making it difficult to probe photo-induced processes. Here we use wave interference effects to modify the spatial distribution of light inside a highly-scattering dye-sensitized solar cell to control photon absorption in a space-dependent manner. By shaping the incident wavefront of a laser beam, we enhance or suppress photocurrent by increasing or decreasing light concentration on the front side of the mesoporous photoanode where the collection efficiency of photoelectrons is maximal. Enhanced light absorption is achieved by reducing reflection through the open boundary of the photoanode via destructive interference, leading to a factor of two increase in photocurrent. This approach opens the door to probing and manipulating photoelectrochemical processes in specific regions inside nominally opaque media.Comment: 21 pages, 4 figures, in submission. The first two authors contributed equally to this paper, and should be regarded as co-first author

Method of identifying inhibitors of glutathione S-transferase (GST) gene expression

Complementary DNA and genomic clones for three variants of GST-.pi. are disclosed. It is demonstrated that certain of these variants are overexpressed in gliomas, thereby indicating an involvement with that form of cancer. This permits the detection and treatment of certain classes of tumors using new compositions such as GST-.pi. genes, oligonucleotides, peptides and antibodies.Board of Regents, University of Texas Syste