Early Evidence on the use of Foreign Cash following the Tax Cuts and Jobs Act of 2017

The Tax Cuts and Jobs Act of 2017 (TCJA) imposes a mandatory repatriation tax on multinational firms’ unremitted foreign earnings, reducing internal capital market frictions through a deemed repatriation of unremitted foreign earnings and eliminating future repatriation tax costs. This change to the U.S. corporate tax system gives multinational firms access to lower cost internal capital (i.e., foreign cash). This study provides evidence that multinational firms with greater levels of pre-TCJA foreign cash increased their post-TCJA repurchases but did not change their shareholder dividends or capital expenditures. We further document that the increase in repurchases is driven by those firms that had greater pre-TCJA repatriation tax costs and firms in weaker financial health. This outcome is consistent with internal capital market theory and suggests a decrease in internal capital market frictions allows companies access to trapped foreign cash. However, our results suggest firms used the repatriated foreign cash on shareholder payouts rather than capital investment. This conflicts with a stated goal of the TCJA to spur domestic economic growth directly and highlights an unintended consequence of the TCJA

Current quality of life and its determinants among opiate-dependent individuals five years after starting methadone treatment

This study explores the current QoL of opiate-dependent individuals who started outpatient methadone treatment at least 5 years ago and assesses the influence of demographic, psychosocial, drug and health-related variables on individuals' QoL. Participants (n = 159) were interviewed about their current QoL, psychological distress and severity of drug-related problems, using the Lancashire Quality of Life Profile, the Brief Symptom Inventory and the Addiction Severity Index. Potential determinants of QoL were assessed in a multiple linear regression analysis. Five years after the start of methadone treatment, opiate-dependent individuals report low QoL scores on various domains. No association was found between drug-related variables and QoL, but a significant negative impact of psychological distress was identified. Severity of psychological distress, taking medication for psychological problems and the inability to change one's living situation were associated with lower QoL. Having at least one good friend and a structured daily activity had a significant, positive impact on QoL. Opiate-dependent individuals' QoL is mainly determined by their psychological well-being and a number of psychosocial variables. These findings highlight the importance of a holistic approach to treatment and support in methadone maintenance treatment, which goes beyond fixing the negative physical consequences of opiate dependence

Prevalence, associated factors and outcomes of pressure injuries in adult intensive care unit patients: the DecubICUs study

Funder: European Society of Intensive Care Medicine; doi: http://dx.doi.org/10.13039/501100013347Funder: Flemish Society for Critical Care NursesAbstract: Purpose: Intensive care unit (ICU) patients are particularly susceptible to developing pressure injuries. Epidemiologic data is however unavailable. We aimed to provide an international picture of the extent of pressure injuries and factors associated with ICU-acquired pressure injuries in adult ICU patients. Methods: International 1-day point-prevalence study; follow-up for outcome assessment until hospital discharge (maximum 12 weeks). Factors associated with ICU-acquired pressure injury and hospital mortality were assessed by generalised linear mixed-effects regression analysis. Results: Data from 13,254 patients in 1117 ICUs (90 countries) revealed 6747 pressure injuries; 3997 (59.2%) were ICU-acquired. Overall prevalence was 26.6% (95% confidence interval [CI] 25.9–27.3). ICU-acquired prevalence was 16.2% (95% CI 15.6–16.8). Sacrum (37%) and heels (19.5%) were most affected. Factors independently associated with ICU-acquired pressure injuries were older age, male sex, being underweight, emergency surgery, higher Simplified Acute Physiology Score II, Braden score 3 days, comorbidities (chronic obstructive pulmonary disease, immunodeficiency), organ support (renal replacement, mechanical ventilation on ICU admission), and being in a low or lower-middle income-economy. Gradually increasing associations with mortality were identified for increasing severity of pressure injury: stage I (odds ratio [OR] 1.5; 95% CI 1.2–1.8), stage II (OR 1.6; 95% CI 1.4–1.9), and stage III or worse (OR 2.8; 95% CI 2.3–3.3). Conclusion: Pressure injuries are common in adult ICU patients. ICU-acquired pressure injuries are associated with mainly intrinsic factors and mortality. Optimal care standards, increased awareness, appropriate resource allocation, and further research into optimal prevention are pivotal to tackle this important patient safety threat

Correction to: Prevalence, associated factors and outcomes of pressure injuries in adult intensive care unit patients: the DecubICUs study

The original version of this article unfortunately contained a mistake

Prevalence, associated factors and outcomes of pressure injuries in adult intensive care unit patients: the DecubICUs study

Funder: European Society of Intensive Care Medicine; doi: http://dx.doi.org/10.13039/501100013347Funder: Flemish Society for Critical Care NursesAbstract: Purpose: Intensive care unit (ICU) patients are particularly susceptible to developing pressure injuries. Epidemiologic data is however unavailable. We aimed to provide an international picture of the extent of pressure injuries and factors associated with ICU-acquired pressure injuries in adult ICU patients. Methods: International 1-day point-prevalence study; follow-up for outcome assessment until hospital discharge (maximum 12 weeks). Factors associated with ICU-acquired pressure injury and hospital mortality were assessed by generalised linear mixed-effects regression analysis. Results: Data from 13,254 patients in 1117 ICUs (90 countries) revealed 6747 pressure injuries; 3997 (59.2%) were ICU-acquired. Overall prevalence was 26.6% (95% confidence interval [CI] 25.9–27.3). ICU-acquired prevalence was 16.2% (95% CI 15.6–16.8). Sacrum (37%) and heels (19.5%) were most affected. Factors independently associated with ICU-acquired pressure injuries were older age, male sex, being underweight, emergency surgery, higher Simplified Acute Physiology Score II, Braden score 3 days, comorbidities (chronic obstructive pulmonary disease, immunodeficiency), organ support (renal replacement, mechanical ventilation on ICU admission), and being in a low or lower-middle income-economy. Gradually increasing associations with mortality were identified for increasing severity of pressure injury: stage I (odds ratio [OR] 1.5; 95% CI 1.2–1.8), stage II (OR 1.6; 95% CI 1.4–1.9), and stage III or worse (OR 2.8; 95% CI 2.3–3.3). Conclusion: Pressure injuries are common in adult ICU patients. ICU-acquired pressure injuries are associated with mainly intrinsic factors and mortality. Optimal care standards, increased awareness, appropriate resource allocation, and further research into optimal prevention are pivotal to tackle this important patient safety threat

Earnings Management Constraints: An Examination of the Tradeoff Between Accruals-based Earnings Management and Classification Shifting

Prior literature has investigated three forms of earnings management: real earnings management (REM), accruals earnings management (AEM) and classification shifting. Managers make trade-off decisions among these methods based on the costs, constraints and timing of each strategy. This study investigates whether managers use classification shifting when their ability to use other forms of earnings management is constrained. We find that when REM is constrained by poor financial condition, high levels of institutional ownership and low industry market share, managers are more likely to use classification shifting. Further, we find that when AEM is constrained by low accounting system flexibility and the provision of a cash flow forecast, managers are more likely to use classification shifting. In addition, when we limit our sample to firms that are most likely to have manipulated earnings, we continue to find support for constraints of both REM and AEM leading to higher levels of classification shifting. We also find support for the hypothesis that the timing of each earnings management strategy influences managers’ trade-off decision. Our results indicate that managers use classification shifting as substitute form of earnings management for both AEM and REM

Audit Engagement Review: Evidence from Audit Report Errors

Reviewing the work of the engagement team is a critical aspect of financial statement auditing but is generally unobservable to external stakeholders. This can create challenges for assessing audit quality for individual audit engagements. This study's objective is to introduce and investigate an archival measure that proxies for audit engagement review: audit reports containing errors. We examine audit report errors because the audit report represents the auditor's primary communication with financial statement users and is subject to a rigorous review process. We first provide evidence that typical factors that influence audit engagement review are associated with audit report errors. Specifically, we find that errors are more likely to be present in audit reports when time pressure exists and less likely for clients that are of greater importance. Next, we examine whether our measure for review is associated with audit quality. Results suggest that errors in audit reports are positively associated with financial reporting misstatements (as measured by subsequent out-of-period adjustments). Collectively, our evidence suggests that audit reports containing an error is a suitable archival proxy for (ineffective) audit engagement review

Schedule UTP: Stock Price Reaction and Economic Consequences

This article discusses the effects of the Internal Revenue Service (IRS) requirement to disclose uncertain tax positions (UTP) on a new schedule (Schedule UTP) on firm value and firm reporting behavior

External Auditor Responses to Tax Risk

Both practitioners and academics are increasingly focusing their attention on the riskiness of firms’ tax planning activities. In this study, we examine how external auditors respond to tax risk, measured using the volatility of firms’ annual cash and GAAP (Generally Accepted Accounting Principles) effective tax rates. Consistent with the notion that tax risk represents a source of engagement risk that is priced by external auditors, we first document a positive association between audit fees and tax risk incremental to fee premiums arising from tax aggressiveness. We also find that knowledge spillover benefits related to the provision of tax nonaudit services moderate this positive association. In supplemental tests, we provide evidence on additional auditor responses to tax risk. In particular, we document that tax risk is positively associated with both audit report lag and the likelihood of the auditor reporting a tax-related material weakness in the client’s internal controls. Our findings add to the growing literature at the intersection of corporate taxation and auditing, and to the literature distinguishing between the level and riskiness of firms’ tax avoidance strategies