Determinants of voluntary audit and voluntary full accounts in micro- and non-micro small companies in the UK

This is an Author's Accepted Manuscript of an article published in Accounting and Business Research, 42(4), 441 - 468, 2012, copyright Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/00014788.2012.667969.This study investigates the link between the auditing and filing choices made by a sample of 592 small private companies, which includes 419 micro-companies. It examines decisions made in connection with the 2006 accounts following UK's adoption of the maximum EU size thresholds in 2004, and the impact of the proposed Directive on the annual accounts of micro-companies. The research extends the model of cost, management and agency factors associated with voluntary audit, and develops a complementary model for voluntary full accounts. The results show the benefits of placing full audited accounts on public record that outweigh the costs for a significant proportion of companies. In non-micro small companies, voluntary audit is determined by cost and agency factors, whereas in micro-companies it is driven by cost, management and agency factors. In both groups, the predictors of voluntary full accounts include management and agency factors, and choosing voluntary audit is one of the key factors. The study provides models that can be tested in other jurisdictions to provide evidence of the needs of micro-companies, and the discussion of the methodological challenges for small company researchers in the UK makes further contribution to the literature

CEO pay, shareholder returns, and accounting profits

We assess the impact on CEO pay (including salary, cash bonus, and benefits in kind) of changes in both accounting and shareholder returns in 99 British companies in the years 1972-89. After correcting for heterogeneity biases inherent in the standard specifications of the problem, we find a strong positive relationship between CEO pay and within-company changes in shareholder returns, and no statistically significant relationship between CEO pay and within-company changes in accounting returns. Differences between firms in long-term average profitability do appear to have a substantial effect on CEO pay, while differences between firms in shareholder returns add nothing to the within-firm pay dynamics.These findings call into question the rationale for explicitly share-based incentive schemes

Small and medium-sized enterprise policy: Designed to fail?

Significant doubts persist over the effectiveness of government policy to increase the numbers or performance of small and medium-sized enterprises in the UK economy. We analyse UK political manifestoes from 1964-2015 to examine the development of SME policy in political discourse. We do this by analysing how the broadly-defined category of ‘SME’ has been characterised in the manifestoes and assess these characterisations in relation to the empirical evidence base. We highlight three consistent themes in UK political manifestoes during 1964-2015 where SMEs have been characterised as having the potential for growth, struggling to access finance and being over-burdened by regulation. We argue that homogenising the broad range of businesses represented by the SME category and characterising them in these terms misrepresents them, undermining policies developed in relation to this mischaracterisation

AMSR2 Soil Moisture Product Validation

The Advanced Microwave Scanning Radiometer 2 (AMSR2) is part of the Global Change Observation Mission-Water (GCOM-W) mission. AMSR2 fills the void left by the loss of the Advanced Microwave Scanning Radiometer Earth Observing System (AMSR-E) after almost 10 years. Both missions provide brightness temperature observations that are used to retrieve soil moisture. Merging AMSR-E and AMSR2 will help build a consistent long-term dataset. Before tackling the integration of AMSR-E and AMSR2 it is necessary to conduct a thorough validation and assessment of the AMSR2 soil moisture products. This study focuses on validation of the AMSR2 soil moisture products by comparison with in situ reference data from a set of core validation sites. Three products that rely on different algorithms were evaluated; the JAXA Soil Moisture Algorithm (JAXA), the Land Parameter Retrieval Model (LPRM), and the Single Channel Algorithm (SCA). Results indicate that overall the SCA has the best performance based upon the metrics considered

Development and Validation of The SMAP Enhanced Passive Soil Moisture Product

Since the beginning of its routine science operation in March 2015, the NASA SMAP observatory has been returning interference-mitigated brightness temperature observations at L-band (1.41 GHz) frequency from space. The resulting data enable frequent global mapping of soil moisture with a retrieval uncertainty below 0.040 cu m/cu m at a 36 km spatial scale. This paper describes the development and validation of an enhanced version of the current standard soil moisture product. Compared with the standard product that is posted on a 36 km grid, the new enhanced product is posted on a 9 km grid. Derived from the same time-ordered brightness temperature observations that feed the current standard passive soil moisture product, the enhanced passive soil moisture product leverages on the Backus-Gilbert optimal interpolation technique that more fully utilizes the additional information from the original radiometer observations to achieve global mapping of soil moisture with enhanced clarity. The resulting enhanced soil moisture product was assessed using long-term in situ soil moisture observations from core validation sites located in diverse biomes and was found to exhibit an average retrieval uncertainty below 0.040 cu m/cu m. As of December 2016, the enhanced soil moisture product has been made available to the public from the NASA Distributed Active Archive Center at the National Snow and Ice Data Center

Seasonal Dependence of SMAP Radiometer-Based Soil Moisture Performance as Observed over Core Validation Sites

The NASA SMAP (Soil Moisture Active Passive) mission provides a global coverage of soil moisture measurements based on its L-band microwave radiometer every 2-3 days at about 40 km resolution. The soil moisture retrieval algorithms model the brightness temperature as a function of soil moisture, surface conditions and vegetation. External data sources inform the algorithms about the surface conditions and vegetation, which enable the retrieval of soil moisture. The inversion process contains uncertainties related to radiometer measurements, forward model assumptions and ancillary data sources. This study focuses on the uncertainties that depend on the seasonal evolution of the surface conditions and vegetation. This study compares the SMAP and core validation site (CVS) soil moisture values over a period of three years to extract the evolution of performance metrics over time. The analysis showed that most CVS that include managed agriculture exhibit significant time-dependent seasonal bias. This bias was linked to seasonal temperature cycle, which is a proxy to several features that can cause seasonally dependent errors in the SMAP product

GCOM-W AMSR2 Soil Moisture Product Validation Using Core Validation Sites

The Advanced Microwave Scanning Radiometer 2 (AMSR2) is part of the Global Change Observation Mission-Water (GCOM-W). AMSR2 has filled the gap in passive microwave observations left by the loss of the Advanced Microwave Scanning RadiometerEarth Observing System (AMSR-E) after almost 10 years of observations. Both missions provide brightness temperature observations that are used to retrieve soil moisture estimates at the near surface. A merged AMSR-E and AMSR2 data product will help build a consistent long-term dataset; however, before this can be done, it is necessary to conduct a thorough validation and assessment of the AMSR2 soil moisture products. This study focuses on the validation of the AMSR2 soil moisture products by comparison with in situ reference data from a set of core validation sites around the world. A total of three soil moisture products that rely on different algorithms were evaluated; the Japan Aerospace Exploration Agency (JAXA) soil moisture algorithm, the Land Parameter Retrieval Model (LPRM), and the Single Channel Algorithm (SCA). JAXA, SCA and LPRM soil moisture estimates capture the overall climatological features. The spatial features of the three products have similar overall spatial structure. The JAXA soil moisture product shows a lower dynamic range in the retrieved soil moisture with a satisfactory performance matrix when compared to in situ observations (ubRMSE0.059 m3m3, Bias-0.083 m3m3, R0.465). The SCA performs well over low and moderately vegetated areas (ubRMSE0.053 m3m3, Bias-0.039 m3m3, R0.549). The LPRM product has a large dynamic range compared to in situ observations with a wet bias (ubRMSE0.094 m3m3, Bias0.091 m3m3, R0.577). Some of the error is due to the difference in observation depth between the in situ sensors (5 cm) and satellite estimates (1 cm). Results indicate that overall the JAXA and SCA have the best performance based upon the metrics considered

The evolution and adoption of equity crowdfunding: entrepreneur and investor entry into a new market

Equity crowdfunding (ECF) offers entrepreneurs an online social media marketplace where they can access numerous potential investors who, in exchange for an ownership stake, may supply them with finance. In this paper, we describe the evolution of this market in the UK. Using an inductive qualitative longitudinal research design, we analyse the emerging views of entrepreneurs and investors towards ECF. Our interviewees include large and small-scale investors, as well as market participants who have chosen not to invest or raise funds via ECF. We find that the large financial flows to entrepreneurs in the UK via the ECF platforms, nearly half a billion GBP since 2011, have probably been largely incremental to traditional sources of early stage entrepreneurial finance. Moreover, our research indicates that for the most part, investors appear to understand and appropriately evaluate the risks that they are bearing; ECF investments are perceived as a high risk, high return component within individuals’ portfolios. Investors also use their communication with peers and entrepreneurs via the ECF platform as a learning tool. On the entrepreneurs’ side, ECF allows them to test their products, to develop their brand, to build a loyal customer base and to turn customers into investors. We conclude that policymakers, with the support of a locally appropriate regulatory framework, could support equity crowdfunding as one of the market choices available for entrepreneurs looking to start or grow their ventures

Assessment of Version 4 of the SMAP Passive Soil Moisture Standard Product

NASAs Soil Moisture Active Passive (SMAP) mission launched on January 31, 2015 into a sun-synchronous 6 am6 pm orbit with an objective to produce global mapping of high-resolution soil moisture and freeze-thaw state every 2-3 days. The SMAP radiometer began acquiring routine science data on March 31, 2015 and continues to operate nominally. SMAPs radiometer-derived standard soil moisture product (L2SMP) provides soil moisture estimates posted on a 36-km fixed Earth grid using brightness temperature observations and ancillary data. A beta quality version of L2SMP was released to the public in October, 2015, Version 3 validated L2SMP soil moisture data were released in May, 2016, and Version 4 L2SMP data were released in December, 2016. Version 4 data are processed using the same soil moisture retrieval algorithms as previous versions, but now include retrieved soil moisture from both the 6 am descending orbits and the 6 pm ascending orbits. Validation of 19 months of the standard L2SMP product was done for both AM and PM retrievals using in situ measurements from global core calval sites. Accuracy of the soil moisture retrievals averaged over the core sites showed that SMAP accuracy requirements are being met