Evidence on the determinants and economic consequences of delegated monitoring

We investigate delegated monitoring by examining the determinants and effects of including cross-acceleration provisions in public debt contracts. We find that cross-acceleration provision use depends on borrowers' going concern relative to liquidation values, debt repayment structures, credit quality, and financial reporting quality. This suggests that the use of cross-acceleration provisions increases when the costs of cascading defaults are lower, the conflicts between creditor classes are higher, and the benefits of delegating monitoring to banks are higher. We also find a lower interest rate on public debt contracts with cross-acceleration provisions, but the rate reduction depends on borrowers' financial reporting quality

Public pension accounting rules and economic outcomes

We find a negative association between a state׳s fiscal condition and the use of discretion in applying Governmental Accounting Standards Board (GASB) rules to understate pension funding gaps. We also find that the use of discretion is negatively associated with states’ decisions to increase taxes and cut spending. In addition, we find that the funding gap understatement is positively associated with higher future labor costs. Importantly, this association is primarily attributable to the GASB methodology, which systematically understates the funding gap. This suggests that the GASB approach is associated with policy choices that have the potential to exacerbate fiscal stress. Keywords: Public pension; Economic consequences of accounting rules; Real decision

The Influence of Elections on the Accounting Choices of Governmental Entities

This paper investigates whether gubernatorial elections affect state governments’ accounting choices. We identify two accounts, the compensated absence liability account and the unfunded pension liability account, which provide incumbent gubernatorial candidates with flexibility for manipulation. We find that, in an election year, the liability associated with compensated absences and unfunded pension liabilities are both systematically lower. We also find that the variation in these employment-related liabilities is correlated with proxies for the incumbent's incentives and ability to manipulate their accounting reports. Jointly, these results suggest that state governments manipulate accounting numbers to present a healthier financial picture in an election year

Amazon River infl uence on nitrogen fi xation in the western tropical North Atlantic

We measured rates of N- and C-fixation with a direct tracer method in regions of the western tropical North Atlantic influenced by the Amazon River plume during the high flow period of 2010 (May–June 2010). We found distinct regional variations in N-fixation activity, with the lowest rates in the plume proper and the highest rates in the plume margins and in offshore waters. A comparison of our N- and C-fixation measurements showed that the relative contribution of N-fixation to total primary production increased from the plume core toward oceanic waters, and that most of the C-fixation in this system was supported by sources of nitrogen other than those derived from biological N-fixation, or diazotrophy. We complemented these rate experiments with measurements of the δ15N of suspended particles (δ15PN), which documented the important and often dominant role of diazotrophs in supplying nitrogen to particulate organic matter in the water column. These coupled measurements revealed that small phytoplankton contributed more new nitrogen to the particulate nitrogen pool than larger phytoplankton. We used a habitat classification method to assess the fac- tors that control diazotrophic activity and contribution to the suspended particle pool, both of which increased from the plume toward oceanic waters. Our findings provide an important constraint on the role of the Amazon plume in creating distinct niches and roles for diazotrophs in the nutrient and carbon budgets of the western tropical North Atlantic

Direct Evidence on the Informational Properties of Earnings in Loan Contracts

Using a sample of firms that disclose the realizations of earnings used for determining covenant compliance in loan contracts, we provide the first direct evidence on the informational properties of earnings used in the performance covenants included in debt contracts. We find that the earnings measure used in performance covenants does not exhibit asymmetric loss timeliness and has significantly greater cash flow predictive ability than GAAP measures of earnings. We suggest that these results reflect the idea that contracting parties design accounting rules for performance covenants to enhance their efficacy as “tripwires”

How Do Auditors Behave During Periods of Market Euphoria? The Case of Internet IPOs

The study of periods of market euphoria, such as Holland’s seventeenth-century tulip mania, England’s eighteenth-century South Sea Company, America’s nineteenth-century railroads, or, most recently, the U.S. housing market, is a topic of long-standing interest to economists. Theorists specify conditions under which market participants and institutions cause "bubbles" to arise and persist and empiricists test participant-centric or institution- centric explanations (Hong, Scheinkman, and Xiong 2008; Schultz 2008; Greenwood and Nagel 2009). In this paper, we study a different participant other than one that stands to gain from price fluctuations. We are interested in how auditors behave during periods of market euphoria. Given their gatekeeper responsibility to act in the public’s interest, along with the seeming inevitability of bubbles (Rampell 2009), it is important to study how auditors behave during euphoric market conditions. To address this question, we examine auditor going-concern (GC) opinions around the time of the wave of stressed Internet firms filing to go public on NASDAQ, the capital markets entry point for the companies that went on to constitute "dotcom mania"

Automated Inspection Device for Explosive Charge in Shells - AIDECS

Certain defects in the explosive charge of an artillery shell can cause the projectile to explode prematurely in the barrel of the launcher from which it is fired. The sensitivity of the radiographic technique presently used is limited by the large influence of the steel shell casing on the transmitted radiation. A filmless radiometric technique utilizing the basic radiation principle of Compton scattering, which will detect cavities in the explosive filler with minimal interference from the steel casing, has been identified and tested. By scanning the shell with a beam of radiation and observing the Compton scattering through a unique collimating system, it has been possible to detect voids as small as 1/16 inch in cross section. The hardware consists of the source, beam collimator, detector collimator, and a large plastic scintillator detector system. The projectile is inserted into the beam path and moved through a fixed scanning pattern by a mechanical handling system. The scanning sequence is computer contra ll ed and results in a threedimensional data matrix giving a direct representation of density within the projectile. Voids are identified and classified by computer analysis, and shell acceptability decisions are automatically generated. An engineering prototype system is currently being assembled and tested. (A production prototype conceptual design is concurrently under development.) This new technique will replace an existing film radiography inspection procedure and eliminate the need for human interpretation of the defects, while providing more consistent and reliable inspections at lower costs

Order parameter for two-dimensional critical systems with boundaries

Conformal transformations can be used to obtain the order parameter for two-dimensional systems at criticality in finite geometries with fixed boundary conditions on a connected boundary. To the known examples of this class (such as the disk and the infinite strip) we contribute the case of a rectangle. We show that the order parameter profile for simply connected boundaries can be represented as a universal function (independent of the criticality model) raised to the power eta/2. The universal function can be determined from the Gaussian model or equivalently a problem in two-dimensional electrostatics. We show that fitting the order parameter profile to the theoretical form gives an accurate route to the determination of eta. We perform numerical simulations for the Ising model and percolation for comparison with these analytic predictions, and apply this approach to the study of the planar rotor model.Comment: 10 pages, 14 figures. Revisions: Removed many typos, improved presentation of most of the figure

The epidemiology of fighting in group-housed laboratory mice

Injurious home-cage aggression (fighting) in mice affects both animal welfare and scientific validity. It is arguably the most common potentially preventable morbidity in mouse facilities. Existing literature on mouse aggression almost exclusively examines territorial aggression induced by introducing a stimulus mouse into the home-cage of a singly housed mouse (i.e. the resident/intruder test). However, fighting occurring in mice living together in long-term groups under standard laboratory housing conditions has barely been studied. We performed a point-prevalence epidemiological survey of fighting at a research institution with an approximate 60,000 cage census. A subset of cages was sampled over the course of a year and factors potentially influencing home-cage fighting were recorded. Fighting was almost exclusively seen in group-housed male mice. Approximately 14% of group-housed male cages were observed with fighting animals in brief behavioral observations, but only 14% of those cages with fighting had skin injuries observable from cage-side. Thus simple cage-side checks may be missing the majority of fighting mice. Housing system (the combination of cage ventilation and bedding type), genetic background, time of year, cage location on the rack, and rack orientation in the room were significant risk factors predicting fighting. Of these predictors, only bedding type is easily manipulated to mitigate fighting. Cage ventilation and rack orientation often cannot be changed in modern vivaria, as they are baked in by cookie-cutter architectural approaches to facility design. This study emphasizes the need to invest in assessing the welfare costs of new housing and husbandry systems before implementing them

Nitrogen sources and net growth efficiency of zooplankton in three Amazon River plume food webs

The plasticity of nitrogen specific net growth efficiency (NGE) in marine mesozooplankton is currently unresolved, with discordant lines of evidence suggesting that NGE is constant, or that it varies with nitrogen source, food availability, and food quality in marine ecosystems. Specifically, the fate of nitrogen from nitrogen fixation is poorly known. We use 15N : 14N ratios in plankton in combination with hydrological data, nutrient profiles, and nitrogen fixation rate measurements to investigate the relationship between new nitrogen sources and the nitrogen specific NGE in three plankton communities along the outer Amazon River plume. The NGE of small (200–500 μm) mesozooplankton was estimated from the δ 15N differences between particulate nitrogen and zooplankton using an open system Rayleigh fractionation model. The transfer efficiency of nitrogen among larger (\u3e 500 μm) mesozooplankton was estimated from the change in δ 15N as a function of zooplankton size. The Amazon River was not a significant source of bioavailable nitrogen anywhere in our study region, and subsurface nitrate was the primary new nitrogen source for the outer shelf community, which was dominated by diatoms. N2 fixation was the principal new nitrogen source at sites of high diatom diazotroph association abundance and at oceanic sites dominated by Trichodesmium spp. and Synechococcus spp. Although we found clear spatial differences in food quantity, food quality, and diazotroph inputs into mesozooplankton, our data show no significant differences in mesozooplankton nitrogen transfer efficiency and NGE (for latter, mean ± SD: 59 ± 10%) among sites