Call Options and Accruals Quality

We analyze the link between financial reporting choices that affect accruals quality and firms' use of call options. We argue that call options used in compensation arrangements (employee stock options or ESOs) create countervailing incentives for managers to affect accruals quality. On the one hand, poorer accruals quality is associated with greater returns volatility (which leads to an increase in ESO value); on the other hand, better accruals quality is associated with a lower cost of capital (and, therefore, higher share price, which leads to an increase in ESO value). We confirm both effects on accruals quality, and we show that the net effect is for ESOs to worsen accruals quality. We provide additional evidence on this main result by showing that in two settings where the returns volatility incentive to worsen accruals quality is muted or absent (cases where managers hold employer shares and cases where the firm uses call options for financing purposes, such as preferred stock and convertible debt), the overall incentive is for managers to increase accruals quality.Options; Information Quality; Compensation

[Editorial] Habitability Beyond Earth

The question of whether Earth is a unique location for life remains one of the most enduring questions of our time. Geochemical data suggests that habitable environments may exist, or may have existed, elsewhere in the Solar System with promising targets including Mars and icy bodies where liquid water is believed to exist (Kargel, 2000; Grotzinger et al., 2014; Glein et al., 2015). Furthermore, potential habitable Exoplanets have been discovered where potentially there is sufficient atmospheric pressure to maintain liquid water (Jenkins et al., 2015; Gillon et al., 2017; Orosei et al., 2018). Yet, for life to exist it is not solely dependent on liquid water as it also needs bio-essential elements, an energy source, and the environmental conditions, that are conducive to life (Nixon et al., 2013). To investigate the feasibility of life elsewhere in the Solar System a combination of field and laboratory based studies, in-situ space experiments, and theoretical modeling is required. Here, we present 14 original research papers, one mini review, and two hypothesis and theory papers highlighting the novel and diverse methods that are employed to investigate potential life beyond the Earth. The overall focus of this collection of work is to understand if terrestrial life could exist elsewhere in the Solar System, and if so, what evidence (bio-signatures) could be used to support or negate the hypothesis of life

The Market Pricing of Accruals Quality

We investigate whether investors price accruals quality, our proxy for the information risk associated with earnings. Measuring accruals quality (AQ) as the standard deviation of residuals from regressions relating current accruals to cash flows, we find that poorer AQ is associated with larger costs of debt and equity. This result is consistent across several alternative specifications of the AQ metric. We also distinguish between accruals quality driven by economic fundamentals ('innate AQ') versus management choices ('discretionary AQ'). Both components have significant cost of capital effects, but innate AQ effects are significantly larger than discretionary AQ effects.Expected return; Information uncertainty; Accounting quality

Simulating the Martian Chemical Enivronment

We report on new analogue materials to simulate Martian rocks and soils, especially under realistic redox conditions

The Physio-Chemical Properties for the Interior of Enceladus

We have reviewed the current physical and chemical conditions of the Enceladus sub-surface environment, including the composition, temperature, pH and pressure. Here we have defined some of these parameters and, through the aid of modelling, will define and refine the remaining parameters needed for our experimental work. Simulations of the chemical reactions occurring within Enceladus can then be carried out to advance our understanding of the internal environment of Enceladus and help evaluate its potential habitability. Once a better understanding of the chemical reactions occurring at the rock-water interface has been carried out, then potential analogues on Earth can be evaluated and known microbial life can be tested to see if it could survive the conditions of Enceladus

The Microbial Community of a Terrestrial Anoxic Inter-Tidal Zone: A Model for Laboratory-Based Studies of Potentially Habitable Ancient Lacustrine Systems on Mars

Evidence indicates that Gale crater on Mars harboured a fluvio-lacustrine environment that was subjected to physio-chemical variations such as changes in redox conditions and evaporation with salinity changes, over time. Microbial communities from terrestrial environmental analogues sites are important for studying such potential habitability environments on early Mars, especially in laboratory-based simulation experiments. Traditionally, such studies have predominantly focused on microorganisms from extreme terrestrial environments. These are applicable to a range of Martian environments; however, they lack relevance to the lacustrine systems. In this study, we characterise an anoxic inter-tidal zone as a terrestrial analogue for the Gale crater lake system according to its chemical and physical properties, and its microbiological community. The sub-surface inter-tidal environment of the River Dee estuary, United Kingdom (53°21'015.40" N, 3°10'024.95" W) was selected and compared with available data from Early Hesperian-time Gale crater, and temperature, redox, and pH were similar. Compared to subsurface ‘groundwater’-type fluids invoked for the Gale subsurface, salinity was higher at the River Dee site, which are more comparable to increases in salinity that likely occurred as the Gale crater lake evolved. Similarities in clay abundance indicated similar access to, specifically, the bio-essential elements Mg, Fe and K. The River Dee microbial community consisted of taxa that were known to have members that could utilise chemolithoautotrophic and chemoorganoheterotrophic metabolism and such a mixed metabolic capability would potentially have been feasible on Mars. Microorganisms isolated from the site were able to grow under environment conditions that, based on mineralogical data, were similar to that of the Gale crater’s aqueous environment at Yellowknife Bay. Thus, the results from this study suggest that the microbial community from an anoxic inter-tidal zone is a plausible terrestrial analogue for studying habitability of fluvio-lacustrine systems on early Mars, using laboratory-based simulation experiments

Mars simulated exposure and the characteristic Raman biosignatures of amino acids and halophilic microbes

Though Raman bands of α-amino acids (AA) are well documented, often only the strongest intensity bands are quoted as identifiers (e.g. Jenkins et al., 2005; De Gelder et al., 2007; Zhu et al., 2011). Unknown regolith mixtures on Mars-sampling missions could obscure these bands. Here the case is made for determining, via a statistical method, sets of characteristic bands to be used as identifiers, independent of band intensity or number of bands (Rolfe et al., 2016). AA have upwards of 25 potentially identifying bands and this method defines sets of 10–19 bands per AA. Examination of AA-doped Mars-like basalt resulted in a maximum of eight bands being identified, as some characteristic bands were obscured by mineral bands, including the strongest intensity band in some cases. This proved the need for characteristic bands to be defined, enabling successful identification of AA. The ESA ExoMars Rover mission will crush and then pass the sample to the Raman Laser Spectrometer. We crushed a Mars-like basalt to a similar grain size expected to be created by the rover. Our samples were doped with 1 % (by weight) AA samples, resulting in no detection of AA, because of loss of original spatial context and spaces between the grains. We recommend that Raman spectroscopy on future missions should be conducted before the sample is crushed. Halite-entombed halophilic microbes, known to survive being entombed, were exposed to Mars-like surface (including temperature, pressure, atmospheric composition and UV) and freeze-thaw cycle (plus pressure and atmospheric composition) conditions. This test on the survival of the microbes showed that survival rates quickly deteriorated in surface conditions, but freeze-thaw cycle samples had well preserved Raman biosignatures, indicating that similar signatures could be detectable on Mars if similar life persists in evaporitic material or brines today

Draft Genome Sequence of Clostridium sp. Strain E02, Isolated from an Estuarine Environment

Here, we report the draft genome sequence of a strain of Clostridium isolated from sediment collected from an estuarine environment. The strain was isolated using a minimal medium designed to select for chemoautotrophic microorganisms. The strain may represent a novel species within the genus Clostridium, and this genome sequence enables further investigation into the genetic and metabolic diversity of this organism

Exploring Deep-Sea Brines as Potential Terrestrial Analogues of Oceans in the Icy Moons of the Outer Solar System.

Several icy moons of the outer solar system have been receiving considerable attention and are currently seen as major targets for astrobiological research and the search for life beyond our planet. Despite the limited amount of data on the oceans of these moon, we expect them to be composed of brines with variable chemistry, some degree of hydrothermal input, and be under high pressure conditions. The combination of these different conditions significantly limits the number of extreme locations, which can be used as terrestrial analogues. Here we propose the use of deep-sea brines as potential terrestrial analogues to the oceans in the outer solar system. We provide an overview of what is currently known about the conditions on the icy moons of the outer solar system and their oceans as well as on deep-sea brines of the Red Sea and the Mediterranean and their microbiology. We also identify several threads of future research, which would be particularly useful in the context of future exploration of these extra-terrestrial oceans