And then there were four: a study of UK market concentration - causes, consequences and the scope for market adjustment

While concentration measures are a good indicator of market structure, the link with competitiveness is more complex than often assumed. In particular, the modern theory of industrial organisation makes no clear statement regarding the impact of concentration on competition - the focus of this paper is concentration and no inferences are made about competitive aspects of the market. The extent and nature of concentration within the UK listed company audit market as at April, 2002 and, pro forma, after the collapse of Andersen is documented and analysed in detail (by firm, market segment and industry sector). The largest four firms held 90 per cent of the market (based on audit fees) in 2002, rising to 96 per cent with the demise of Andersen. A single firm, Pricewaterhouse-Coopers, held 70 per cent or more of the share of six out of 38 industry sectors, with a share of 50 per cent up to 70 per cent in a further seven sectors. The provision of non-audit services (NAS) by incumbent auditors is also considered. As at April 2002, the average ratio of non-audit fees (paid to auditor) to audit fees was 208 per cent, and exceeded 300 per cent in seven sectors. It is likely, however, that disposals by firms of their management consultancy and outsource firms, combined with the impact of the Smith Report on audit committees will serve to reduce these ratios. Another finding is that audit firms with expertise in a particular sector appeared to earn significantly higher nonaudit fees from their audit clients in that sector. The paper thus provides a solid empirical basis for debate. The subsequent discussion considers the implications for companies and audit firms of the high level of concentration in the current regulatory climate, where no direct regulatory intervention is planned

Systems Analysis And Design: Using Experiential Projects To Enhance Learning

This paper provides accounting information systems instructors with an in-depth look at utilizing experiential learning field projects in a systems analysis and design course.  Student groups were required to develop and implement fully functional systems for a real world client. We discuss project requirements, implementation issues, student feedback, and client feedback.  Student and client perceptions of the experiential projects are favorable

Accounting Software Selection And Satisfaction: A Comparative Analysis Of Vendor And User Perceptions

We comparatively analyze the accounting software selection, retention, and satisfaction perceptions of 43 accounting software vendors as compared to 57 accounting software users.  We identify key areas of agreement and disagreement between the groups. With respect to major factor categories, vendors rate vendor support significantly higher than users, while users rate functionality and compatibility significantly higher than vendors.  Key differences also exist with respect to vendor and user perceptions of the most important features present within the major categories. For instance, vendors and users rate ten of the fourteen components of functionality/capability significantly different.  Similar differences are found with respect to features in vendor stability and vendor support.  Vendors and users also differ in their perceptions as to why companies change software. By highlighting some of the key areas where vendors and users differ in their perceptions of important items, we hope to help bridge the gap between vendor efforts and user desires.  By knowing their customers better and focusing increased attention on areas that users value, we believe that vendors will be able to develop software that better fits user objectives and, in turn, improves user satisfaction

Building an Effective Internal Audit Function: Learning from SOX Section 404 Reports

In the wake of the major accounting scandals, internal auditing has emerged as a powerful force in promoting effective controls, risk management, and governance in U.S. companies. This article highlights recent internal audit-related problems that were revealed in SOX Section 404 reports and offers specific recommendations for building an effective, value-adding internal audit function

Remediation of Material Weaknesses Related to Employee Compensation

The article presents an analysis of the remedial efforts of U.S. companies with material weaknesses in internal control related to employee compensation. Despite the passage of the Sarbanes-Oxley Act (SOX), public companies have continued to experience accounting and control issues related to employee compensation. The results indicate the role of the Public Company Accounting Oversight Board (PCAOB) and its committees in preventing and remediating material weaknesses concerning compensation

IT-Related Material Weaknesses In Internal Control: Initial Evidence From SOX Section 404 Reports

Section 404 of the Sarbanes-Oxley Act (SOX) requires auditors and managers to assess public companies’ internal control over financial reporting.  Since some of the material weaknesses in internal control noted by auditors and management relate to IT issues, Section 404 reports offer a new opportunity to examine the types of IT-related control issues that public companies are struggling to address.  This study presents a summary of the most commonly cited IT-related material weaknesses in internal control described in recent Section 404 internal control reports and describes the characteristics of companies with IT-related weaknesses. We also provide insights into companies’ remedial actions to correct their IT control weaknesses

Manifesto on small airway involvement and management in asthma and chronic obstructive pulmonary disease: an Interasma (Global Asthma Association - GAA) and World Allergy Organization (WAO) document endorsed by Allergic Rhinitis and its Impact on Asthma (ARIA) and Global Allergy and Asthma European Network (GA2LEN)

Evidence that enables us to identify, assess, and access the small airways in asthma and chronic obstructive pulmonary disease (COPD) has led INTERASMA (Global Asthma Association) and WAO to take a position on the role of the small airways in these diseases. Starting from an extensive literature review, both organizations developed, discussed, and approved the manifesto, which was subsequently approved and endorsed by the chairs of ARIA and GA2LEN. The manifesto describes the evidence gathered to date and defines and proposes issues on small airway involvement and management in asthma and COPD with the aim of challenging assumptions, fostering commitment, and bringing about change. The small airways (defined as those with an internal diameter <2 mm) are involved in the pathogenesis of asthma and COPD and are the major determinant of airflow obstruction in these diseases. Various tests are available for the assessment of the small airways, and their results must be integrated to confirm a diagnosis of small airway dysfunction. In asthma and COPD, the small airways play a key role in attempts to achieve disease control and better outcomes. Small-particle inhaled formulations (defined as those that, owing to their size [usually <2 μm], ensure more extensive deposition in the lung periphery than large molecules) have proved beneficial in patients with asthma and COPD, especially those in whom small airway involvement is predominant. Functional and biological tools capable of accurately assessing the lung periphery and more intensive use of currently available tools are necessary. In patients with suspected COPD or asthma, small airway involvement must be assessed using currently available tools. In patients with subotpimal disease control and/or functional or biological signs of disease activity, the role of small airway involvement should be assessed and treatment tailored. Therefore, the choice between large- and small-particle inhaled formulations must reflect the physician’s considerations of disease features, phenotype, and response to previous therapy