Can auditors be independent? – Experimental evidence on the effects of client type

Recent regulatory initiatives stress that an independent oversight board, rather than the management board, should be the client of the auditor. In an experiment, we test whether the type of client affects auditors’ independence. Unique features of the German institutional setting enable us to realistically vary the type of auditors’ client as our treatment variable: we portray the client either as the management preferring aggressive accounting or the oversight board preferring conservative accounting. We measure auditors’ perceived client retention incentives and accountability pressure in a post-experiment questionnaire to capture potential threats to independence. We find that the type of auditors’ client affects auditors’ behaviour contingent on the degree of the perceived threats to independence. Our findings imply that both client retention incentives and accountability pressure represent distinctive threats to auditors’ independence and that the effectiveness of an oversight board in enhancing auditors’ independence depends on the underlying threat

Scientific assessment of the use of sugars as cigarette tobacco ingredients: A review of published and other publicly available studies

Sugars, such as sucrose or invert sugar, have been used as tobacco ingredients in American-blend cigarettes to replenish the sugars lost during curing of the Burley component of the blended tobacco in order to maintain a balanced flavor. Chemical-analytical studies of the mainstream smoke of research cigarettes with various sugar application levels revealed that most of the smoke constituents determined did not show any sugar-related changes in yields (per mg nicotine), while ten constituents were found to either increase (formaldehyde, acrolein, 2-butanone, isoprene, benzene, toluene, benzo[k]fluoranthene) or decrease (4-aminobiphenyl, N-nitrosodimethylamine, N-nitrosonornicotine) in a statistically significant manner with increasing sugar application levels. Such constituent yields were modeled into constituent uptake distributions using simulations of nicotine uptake distributions generated on the basis of published nicotine biomonitoring data, which were multiplied by the constituent/nicotine ratios determined in the current analysis. These simulations revealed extensive overlaps for the constituent uptake distributions with and without sugar application. Moreover, the differences in smoke composition did not lead to relevant changes in the activity in in vitro or in vivo assays. The potential impact of using sugars as tobacco ingredients was further assessed in an indirect manner by comparing published data from markets with predominantly American-blend or Virginia-type (no added sugars) cigarettes. No relevant difference was found between these markets for smoking prevalence, intensity, some markers of dependence, nicotine uptake, or mortality from smoking-related lung cancer and chronic obstructive pulmonary disease. In conclusion, thorough examination of the data available suggests that the use of sugars as ingredients in cigarette tobacco does not increase the inherent risk and harm of cigarette smoking