Are All Directors Treated Equally? Evidence from Director Turnover Following Opportunistic Insider Selling

This study investigates the likelihood of director turnover following opportunistic insider selling. Given that opportunistic insider selling may be costly to a firm due to potential legal risk and firm legitimacy concerns, we hypothesize that directors engaging in this type of transactions have a higher likelihood of subsequently leaving the board. Using archival data of 11,409 directors in 2280 US firms from 2005 to 2014, univariate comparisons show that directors engaging in opportunistic insider selling are about 8% more likely to exit their firms’ board compared to directors not engaging in this behavior. Furthermore, multivariate results show that the likelihood of director departure following opportunistic insider selling is higher for some directors but not all. Specifically, directors who are especially valuable to the board or costly to replace do not seem to experience elevated levels of turnover. Interestingly, this difference in director turnover is only observed in smaller firms. We find that in larger firms, the likelihood of director turnover following opportunistic insider selling does not depend on director characteristics. As such, results seem to suggest that boards do not homogeneously self-regulate in this context as some directors seem to be shielded from turnover following unethical behavior

The Potential Influence of Common Viral Infections Diagnosed during Hospitalization among Critically Ill Patients in the United States

Viruses are the most common source of infection among immunocompetent individuals, yet they are not considered a clinically meaningful risk factor among the critically ill. This work examines the association of viral infections diagnosed during the hospital stay or not documented as present on admission to the outcomes of ICU patients with no evidence of immunosuppression on admission. This is a population-based retrospective cohort study of University HealthSystem Consortium (UHC) academic centers in the U.S. from the years 2006 to 2009. The UHC is an alliance of over 90% of the non-profit academic medical centers in the U.S. A total of 209,695 critically ill patients were used in this analysis. Eight hospital complications were examined. Patients were grouped into four cohorts: absence of infection, bacterial infection only, viral infection only, and bacterial and viral infection during same hospital admission. Viral infections diagnosed during hospitalization significantly increased the risk of all complications. There was also a seasonal pattern for viral infections. Specific viruses associated with poor outcomes included influenza, RSV, CMV, and HSV. Patients who had both viral and bacterial infections during the same hospitalization had the greatest risk of mortality RR 6.58, 95% CI (5.47, 7.91); multi-organ failure RR 8.25, 95% CI (7.50, 9.07); and septic shock RR 271.2, 95% CI (188.0, 391.3). Viral infections may play a significant yet unrecognized role in the outcomes of ICU patients. They may serve as biological markers or play an active role in the development of certain adverse complications by interacting with coincident bacterial infection

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

Inhibition of all-TRANS-retinoic acid metabolism by R116010 induces antitumour activity

All-trans-retinoic acid is a potent inhibitor of cell proliferation and inducer of differentiation. However, the clinical use of all-trans-retinoic acid in the treatment of cancer is significantly hampered by its toxicity and the prompt emergence of resistance, believed to be caused by increased all-trans-retinoic acid metabolism. Inhibitors of all-trans-retinoic acid metabolism may therefore prove valuable in the treatment of cancer. In this study, we characterize R116010 as a new anticancer drug that is a potent inhibitor of all-trans-retinoic acid metabolism. In vitro, R116010 potently inhibits all-trans-retinoic acid metabolism in intact T47D cells with an IC50-value of 8.7 nM. In addition, R116010 is a selective inhibitor as indicated by its inhibition profile for several other cytochrome P450-mediated reactions. In T47D cell proliferation assays, R116010 by itself has no effect on cell proliferation. However, in combination with all-trans-retinoic acid, R116010 enhances the all-trans-retinoic acid-mediated antiproliferative activity in a concentration-dependent manner. In vivo, the growth of murine oestrogen-independent TA3-Ha mammary tumours is significantly inhibited by R116010 at doses as low as 0.16 mg kg−1. In conclusion, R116010 is a highly potent and selective inhibitor of all-trans-retinoic acid metabolism, which is able to enhance the biological activity of all-trans-retinoic acid, thereby exhibiting antitumour activity. R116010 represents a novel and promising anticancer drug with an unique mechanism of action

How fast do gully headcuts retreat?

© 2016 Elsevier B.V. Gully erosion has important on and off site effects. Therefore, several studies have been conducted over the past decades to quantify gully headcut retreat (GHR) in different environments. Although these led to important site-specific and regional insights, the overall importance of this erosion process or the factors that control it at a global scale remain poorly understood. This study aims to bridge this gap by reviewing research on GHR and conducting a meta-analysis of measured GHR rates worldwide. Through an extensive literature review, GHR rates for 933 individual and actively retreating gullies have been compiled from more than 70 study areas worldwide (comprising a total measuring period of >19 600 years). Each GHR rate was measured through repeated field surveys and/or analyses of aerial photographs over a period of at least one year (maximum: 97 years, median: 17 years). The data show a very large variability, both in terms of gully dimensions (cross-sectional areas ranging between 0.11 and 816 m2 with a median of 4 m2) and volumetric GHR rates (ranging between 0.002 and 47 430 m3 year- 1 with a median of 2.2 m3 year- 1). Linear GHR rates vary between 0.01 and 135 m year- 1 (median: 0.89 m year- 1), while areal GHR rates vary between 0.01 and 3628 m2 year- 1 (median: 3.12 m2 year- 1). An empirical relationship allows estimating volumetric retreat rates from areal retreat rates with acceptable uncertainties. By means of statistical analyses for a subset of 724 gullies with a known contributing area, we explored the factors most relevant in explaining the observed 7 orders of magnitudes of variation in volumetric GHR rates. Results show that measured GHR rates are significantly correlated to the runoff contributing area of the gully (r2 = 0.15) and the rainy day normal (RDN; i.e. the long-term average annual rainfall depth divided by the average number of rainy days; r2 = 0.47). Other factors (e.g. land use or soil type) showed no significant correlation with the observed GHR rates. This may be attributed to the uncertainties associated with accurately quantifying these factors. In addition, available time series data demonstrate that GHR rates are subject to very large year-to-year variations. As a result, average GHR rates measured over short (100%) uncertainties. We integrated our findings into a weighted regression model that simulates the volumetric retreat rate of a gully headcut as a function of upstream drainage area and RDN. When weighing each GHR observation proportional to its measuring period, this model explains 68% of the observed variance in GHR rates at a global scale. For 76% of the monitored gullies, the simulated GHR values deviate less than one order of magnitude from their corresponding observed value. Our model clearly indicates that GHR rates are very sensitive to rainfall intensity. Since these intensities are expected to increase in most areas as a result of climate change, our results suggest that gully erosion worldwide will become more intense and widespread in the following decades. Finally, we discuss research topics that will help to address these challenges

Auditor Differentiation, Mitigating Management Actions and Audit Reporting Accuracy for distressed firms

In this paper we examine whether there is auditor differentiation through industry specialization and audit methodology in judging the adequacy of mitigating management actions as implemented by financially distressed companies. Using a sample of U.S. companies from manufacturing industries(SIC 20–39)that went bankrupt between 1999–2002, we find evidence that specialist auditors are more likely to issue a going-concern opinion for soon-to-be bankrupt companies when management undertakes strategic turnaround initiatives, relative to non-specialist auditors. Interestingly, and counter to our expectations, we find that audit firms that use a business risk audit methodology are less likely to issue a going-concern opinion for a firm that subsequently goes bankrupt if the client has undertaken operating initiatives to mitigate financial distress. Finally, we also find very strong evidence that all auditors, irrespective of type, are less likely to issue a going-concern opinion for clients that subsequently go bankrupt when the client has plans to raise cash in the short term.status: publishe

Audit committees' independence and the information content of earnings announcements in Western Europe

We examine whether the percentage of independent members sitting on the audit committee, in different institutional settings, impacts the market reaction (measured by the abnormal stock returns variance and the abnormal trading volume) to earnings announcements. For our sample composed of more than 7′600 earnings announcements made by European firms from 15 countries between 2006 and 2014, we find that the market reactions to earnings announcements are significantly larger when the audit committee is more independent in countries with weak institutional setting. Our results generally hold after controlling for numerous methodological issues. We conclude that more independent audit committees are substitutes for weak institutions to increase the credibility of earnings announcements. Our results should be of great interest for European regulators who recently introduced new requirements for public firms regarding audit committees’ independence