The impact of regulations on earnings management via related party sales in china

This study examines the impact of regulations on earnings management via related party sales (RPSs) in China. RPSs have been regarded as a primary means of earnings management in China. Manipulated RPS might involve sales of product or services between related parties at distorted prices or inflated sales volumes. However, manipulating transaction prices is less costly than inflating volumes as price manipulation does not require unnecessary production and transfer costs. The abuse of RPSs was associated with a series of corporate failures and a huge decline in investor confidence at the late 1990s. These scandals were highly publicised and regulators subsequently implemented an accounting treatment regulation in 2001, aimed at reducing earnings inflation via RPSs. Despite significant regulatory changes, the scope of events that led to the passage of the 2001 RPT measurement regulation, and the consequences of the regulatory changes have yet to be studied. This thesis addresses two sets of research questions in this study. The first research question examines whether there is a change in the prevalence of price inflation in RPSs before and after the 2001 RPT measurement regulation. The second research question examines motivations for using RPSs to inflate earnings, and the effect of regulatory change on the extent of earnings management for firms with incentives to inflate earnings. To carry out the investigation, this thesis estimates earnings management using RPSs in two ways. The change measure is defined as the difference between RPSs in the current year and previous year. The change in RPSs is decomposed into the positive change in RPSs denoting income-increasing RPSs and the negative change in RPSs denoting income-decreasing RPSs. The level measure is defined as the difference between a firm's RPS and the mean RPS for all other firms in the same industry. I argue that, if there was a widespread use of transfer pricing techniques in RPSs to inflate earnings, there should be a positive association between the change in gross margin and income-increasing RPSs. The results provide evidence that income-increasing RPSs are associated with price inflation in the pre-RPT regulation period but refer mainly to volumes inflation in the post-RPT regulation period. To my best knowledge, this is the first study to examine the nature of income-increasing RPSs by considering the prevalence of price versus volumes inflation in RPSs. Moreover, this study documents that both before and after the 2001 RPT measurement regulation, the level of RPS manipulation is abnormally higher for firms with incentives to use RPSs to meet the regulatory thresholds of new equity offerings or avoid special treatment policies when compared to firms in various control samples. However, suspected earnings management firms use significantly less RPSs after the regulatory change when compared to firms in similar circumstances prior to the regulatory change. The results provide evidence that the regulation in 2001 reduced but did not eliminate earnings inflation

The impact of Beijing Olympic Sponsorship Program on annual report social disclosure by local sponsors

The objective of this study is to utilise both legitimacy theory and reputation risk management theory to examine the impact of the Beijing Olympic Sponsorship Program on annual report social disclosures by local sponsors. Specially, this study attempts to test whether local sponsors increase annual report social disclosure in responses to their sponsorship participation and whether the increases can be explained by other companies operating in the same industry group. This study also compares and contrasts legitimacy theory with reputation risk management theory, and discusses the applicable power of legitimacy theory and reputation risk management theory in positive events/issues. The annual report disclosures are reviewed for both sponsors and non-sponsors in order to make before and after comparisons. Comparisons are also made between sponsors and non-sponsors in terms of their social disclosure and event-related disclosure. The results indicate that first, sponsors disclosed more social and event-related information in their annual reports after they participated in the sponsorship program, while this was not the case for non-sponsors; second, sponsors disclosed more event-related disclosure than non-sponsors but not for the overall social disclosure. This study also found that the event-related disclosure was significantly correlated with levels of sponsorship while the total amount of social disclosure was correlated with firm size. These results suggest that the annual report could be used as a self-presentational device for managers to protect and enhance corporate reputation. Reputation risk management theory does have the power in explaining certain amounts of social disclosure particularly in these positive issues, but only limited with these firms which gained reputation from the issue. These results do not challenge the dominance of legitimacy theory in corporate social disclosure area, but argues that reputation risk management theory could provide several useful insights and be used as a supplement of legitimacy theory

Resource allocation and optimization techniques in wireless relay networks

Relay techniques have the potential to enhance capacity and coverage of a wireless network. Due to rapidly increasing number of smart phone subscribers and high demand for data intensive multimedia applications, the useful radio spectrum is becoming a scarce resource. For this reason, two way relay network and cognitive radio technologies are required for better utilization of radio spectrum. Compared to the conventional one way relay network, both the uplink and the downlink can be served simultaneously using a two way relay network. Hence the effective bandwidth efficiency is considered to be one time slot per transmission. Cognitive networks are wireless networks that consist of different types of users, a primary user (PU, the primary license holder of a spectrum band) and secondary users (SU, cognitive radios that opportunistically access the PU spectrum). The secondary users can access the spectrum of the licensed user provided they do not harmfully affect to the primary user. In this thesis, various resource allocation and optimization techniques have been investigated for wireless relay and cognitive radio networks

Frustratingly Easy Model Generalization by Dummy Risk Minimization

Empirical risk minimization (ERM) is a fundamental machine learning paradigm. However, its generalization ability is limited in various tasks. In this paper, we devise Dummy Risk Minimization (DuRM), a frustratingly easy and general technique to improve the generalization of ERM. DuRM is extremely simple to implement: just enlarging the dimension of the output logits and then optimizing using standard gradient descent. Moreover, we validate the efficacy of DuRM on both theoretical and empirical analysis. Theoretically, we show that DuRM derives greater variance of the gradient, which facilitates model generalization by observing better flat local minima. Empirically, we conduct evaluations of DuRM across different datasets, modalities, and network architectures on diverse tasks, including conventional classification, semantic segmentation, out-of-distribution generalization, adverserial training, and long-tailed recognition. Results demonstrate that DuRM could consistently improve the performance under all tasks with an almost free lunch manner. Furthermore, we show that DuRM is compatible with existing generalization techniques and we discuss possible limitations. We hope that DuRM could trigger new interest in the fundamental research on risk minimization.Comment: Technical report; 22 page

Effects of slag composition on H2 generation and magnetic precipitation from molten steelmaking slag-steel reaction

In this paper, the effects of slag composition (slag basicity CaO/SiO2 and FeO concentration) on the amounts of H2 gas generated and the magnetic spinel phase precipitated as a result of the reaction between synthetic steelmaking slag and steam at 1873 K (1600 °C) were studied by thermodynamic simulation (using Thermodynamic Package FactSage 7.0) and laboratory experiments. The thermodynamic calculation showed that, upon increasing slag basicity (CaO/SiO2) from 1.0 to 2.5, for the reaction of 100 g of slags with 100 g of H2O gas, the accumulated amount of the produced H2 gas increased from 0.17 to 0.27 g, while the amount of magnetic spinel phase first increased and then decreased, with the maximum precipitation of 16.71 g at the basicity of 1.5. When the FeO concentration increased from 15 to 30 pct for the slag with basicity of 2.0, the accumulated amount of the produced H2 gas increased from 0.17 to 0.28 g, and the amount of magnetic spinel phase increased from 5.88 to 10.59 g. The laboratory experiments were conducted in confocal laser scanning microscope to verify the reaction between 0.2 g of slag and 3.75 L of H2O-Ar gas (PH2O=0.2atm). The results indicated that, for 100 g of slags, upon increasing slag basicity (CaO/SiO2) from 1.0 to 2.5, both the produced H2 gas and magnetic spinel phase first increased and then decreased, with the maximum amounts being 0.09 g of gas and 37.00 g of magnetic spinel phase at the slag basicity of 1.50. For the FeO concentration increasing from 15 to 30 pct, the amounts of both the produced H2 gas and magnetic spinel phase increased from 0.04 to 0.10 g and from 18.00 to 27.00 g, respectively. The reaction rate between the molten CaO-SiO2-FeO-MnO-Al2O3-MgO slag and the moisture (PH2O=0.2atm) increased with the increasing FeO activity in the slag. The dependence of the reaction rate (mol/cm2/s) on FeO content can be expressed as r=(7.67(aFeO)−2.99)×10−7

An adaptive energy efficient MAC protocol for RF energy harvesting WBANs

Continuous and remote health monitoring medical applications with heterogeneous requirements can be realized through wireless body area networks (WBANs). Energy harvesting is adopted to enable low-power health applications and long-term monitoring without battery replacement, which have drawn significant interest recently. Because energy harvesting WBANs are obviously different from battery-powered ones, network protocols should be designed accordingly to improve network performance. In this article, an efficient cross-layer media access control protocol is proposed for radio frequency powered energy harvesting WBANs. We redesigned the superframe structure, which can be rescheduled by the coordinator dynamically. A time switching (TS) strategy is used when sensors harvest energy from radio frequency signals broadcast by the coordinator, and a transmission power adjustment scheme is proposed for sensors based on the energy harvesting efficiency and the network environment. Energy efficiency can be effectively improved that more packets can be uploaded using limited energy. The length of the energy harvesting period is determined by the coordinator to balance the channel resources and energy requirements of sensors and further improve the network performance. Numerical simulation results show that our protocol can provide superior system performance for long-term periodic health monitoring applications

Evaluation of Chinese Quad-polarization Gaofen-3 SAR Wave Mode Data for Significant Wave Height Retrieval

Our work describes the accuracy of Chinese quad-polarization Gaofen-3 (GF-3) synthetic aperture radar (SAR) wave mode data for wave retrieval and provides guidance for the operational applications of GF-3 SAR. In this study, we evaluated the accuracy of the SAR-derived significant wave height (SWH) from 10,514 GF-3 SAR images with visible wave streaks acquired in wave mode by using the existing wave retrieval algorithms, e.g., the theoretical-based algorithm parameterized first-guess spectrum method (PFSM), the empirical algorithm CSAR_WAVE2 for VV-polarization, and the algorithm for quad-polarization (Q-P). The retrieved SWHs were compared with the European Centre for Medium-Range Weather Forecasts (ECMWF) reanalysis field with 0.125° grids. The root mean square error (RMSE) of the SWH is 0.57 m, found using CSAR_WAVE2, and this RMSE value was less than the RMSE values for the analysis results achieved with the PFSM and Q-P algorithms. The statistical analysis also indicated that wind speed had little impact on the bias with increasing wind speed. However, the retrieval tended to overestimate when the SWH was smaller than 2.5 m and underestimate with an increasing SWH. This behavior provides a perspective of the improvement needed for the SWH retrieval algorithm using the GF-3 SAR acquired in wave mode

Predictors of Hypertension in Mauritians with Normotension and Prehypertension at Baseline : A Cohort Study

Information on the predictors of future hypertension in Mauritians with prehypertension is scant. The aim of this study was to analyze the 5-year and 11-year risk of hypertension and its predictors in people with normotension and prehypertension at baseline in Mauritius in 1987. This was a retrospective cohort study of 883 men and 1194 women of Mauritian Indian and Mauritian Creole ethnicity, aged 25-74 years old, free of hypertension at baseline in 1987 with follow-up examinations in 1992 and 1998 using the same methodology. The main outcome was 5- and 11-year risk of hypertension. Odds ratios (OR) and corresponding 95% confidence intervals (CI) were calculated. The 5-year risk of hypertension was 5.4-times higher in people with prehypertension compared with normotensive individuals at baseline. The corresponding odds for prehypertensive people at baseline regarding 11-year hypertension risk was 3.39 (95% CI 2.67-4.29) in the adjusted logistic regression models. Being of Creole ethnicity (OR 1.42; 95% CI 1.09-1.86) increased the 11-year odds of hypertension compared with the Indian population. It is of importance to screen for people with prehypertension and implement strategies to reduce their systolic blood pressure levels to the recommended levels of 120/80 mmHg. Special attention needs to be given to Mauritians of Creole ethnicity.Peer reviewe