Internal accounting control evaluation and auditor judgment; Auditing research monograph, 3

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Bayesian and Belief-Functions Formulas for Auditor Independence Risk Assessment

This is the authors final draft. The publisher's official version is available electronically from: .This paper illustrates two formulas for assessing independence risk based on the Bayesian and belief-functions frameworks. These formulas can be used to assess the role of threats to auditor independence as well as the role of threat-mitigating safeguards. Also, these formulas provide a basis for evaluation of an audit firm’s independence risk and a framework to educate stakeholders about the threats faced by the audit firm and the role of effective safeguards in mitigating these risks. The formulas also provide a means for regulators and lawmakers to evaluate whether they have effective safeguards in place given the existence of threats and for auditors to signal to various stakeholders that they have identified significant threats and have effective safeguards in place. To show the potential usefulness of these analytical models, several illustrations addressing increased transparency and the potential impact of regulations are presented

Analytical Formulas for Risk Assessment for a Class of Problems where Risk Depends on Three Interrelated Variables

We derive general analytical formulas for assessing risks in a problem domain where the risk depends on three interrelated variables. More specifically, we derive general analytical formulas for propagating beliefs in a network where three binary variables, A, B and C, are related to a fourth binary variable Z through an ‘AND’ relationship. In addition, we assume that variables A, B and C are interrelated in that a change in one variable may affect the value of each of the other two. The analytical formulas derived in this article determine the overall belief and plausibility that Z is true or not true, given that we have beliefs on variables A, B and/or C. To demonstrate the importance of the general results, we use the results to develop models applicable to three real-world situations. The first model can aid external auditors in assessing the quality of an audit client’s internal audit function to determine the extent to which the internal auditor’s work can be relied on in the conduct of a financial audit while the second can aid in assessing the risk of impaired auditor independence when conducting a financial statement audit. The third model can be used to assess the risk of management fraud in financial reporting. Assessment of such risks is of critical importance to external auditors, regulators, and the investing public. Analytical formulas to help address these types of important business and economic problems have not been available prior to these derivations

A Formal Model of Auditor Independence Risk

This is the author's final draft. The publisher's official version is available from: .Although the published literature on auditor independence is extensive, an accepted comprehensive theory, framework or model of auditor independence risk does not exist. This paper develops a formal model of auditor independence risk that may be used to begin a more rigorous investigation of auditor independence and various factors that are thought to affect this risk. The sensitivity of the model to various influences on independence risk is assessed by developing a base-level model and then modifying the assumptions for that model. Three research questions are investigated: what is the impact on independence risk of a lack of auditor integrity, the influence of professional standards, and the combined impact of opportunity and incentives. Overall, analytical results show that integrity is the key variable in minimizing independence risk. In addition, in cases where integrity could be questioned, independence risk is positively impacted by professional standards that are perceived to be effective and potentially negatively impacted by certain client characteristics and auditor incentives

Strong Influence of Coadsorbate Interaction on CO Desorption Dynamics on Ru(0001) Probed by Ultrafast X-Ray Spectroscopy and \u3cem\u3eAb Initio\u3c/em\u3e Simulations

We show that coadsorbed oxygen atoms have a dramatic influence on the CO desorption dynamics from Ru(0001). In contrast to the precursor-mediated desorption mechanism on Ru(0001), the presence of surface oxygen modifies the electronic structure of Ru atoms such that CO desorption occurs predominantly via the direct pathway. This phenomenon is directly observed in an ultrafast pump-probe experiment using a soft x-ray free-electron laser to monitor the dynamic evolution of the valence electronic structure of the surface species. This is supported with the potential of mean force along the CO desorption path obtained from density-functional theory calculations. Charge density distribution and frozen-orbital analysis suggest that the oxygen-induced reduction of the Pauli repulsion, and consequent increase of the dative interaction between the CO 5σ and the charged Ru atom, is the electronic origin of the distinct desorption dynamics. Ab initio molecular dynamics simulations of CO desorption from Ru(0001) and oxygen-coadsorbed Ru(0001) provide further insights into the surface bond-breaking process

Formal ratification of subseries for the Pleistocene Series of the Quaternary System

The Pleistocene Series/Epoch of the Quaternary System/Period has been divided unofficially into three subseries/subepochs since at least the 1870s. On 30 January, 2020, the Executive Committee of the International Union of Geological Sciences ratified two proposals approved by the International Commission on Stratigraphy formalizing: 1) the Lower Pleistocene Subseries, comprising the Gelasian Stage and the superjacent Calabrian Stage, with a base defined by the GSSP for the Gelasian Stage, the Pleistocene Series, and the Quaternary System, and currently dated at 2.58 Ma; and 2) the term Upper Pleistocene, at the rank of subseries, with a base currently undefined but provisionally dated at ~129 ka. Defining the Upper Pleistocene Subseries and its corresponding stage with a GSSP is in progress. The Middle Pleistocene Subseries is defined by the recently ratified GSSP for the Chibanian Stage currently dated at 0.774 Ma. These ratifications complete the official division of the Pleistocene into three subseries/subepochs, in uniformity with the similarly subdivided Holocene Series/Epoch

Actionable, Pathogenic Incidental Findings in 1,000 Participants’ Exomes

The incorporation of genomics into medicine is stimulating interest on the return of incidental findings (IFs) from exome and genome sequencing. However, no large-scale study has yet estimated the number of expected actionable findings per individual; therefore, we classified actionable pathogenic single-nucleotide variants in 500 European- and 500 African-descent participants randomly selected from the National Heart, Lung, and Blood Institute Exome Sequencing Project. The 1,000 individuals were screened for variants in 114 genes selected by an expert panel for their association with medically actionable genetic conditions possibly undiagnosed in adults. Among the 1,000 participants, 585 instances of 239 unique variants were identified as disease causing in the Human Gene Mutation Database (HGMD). The primary literature supporting the variants’ pathogenicity was reviewed. Of the identified IFs, only 16 unique autosomal-dominant variants in 17 individuals were assessed to be pathogenic or likely pathogenic, and one participant had two pathogenic variants for an autosomal-recessive disease. Furthermore, one pathogenic and four likely pathogenic variants not listed as disease causing in HGMD were identified. These data can provide an estimate of the frequency (∼3.4% for European descent and ∼1.2% for African descent) of the high-penetrance actionable pathogenic or likely pathogenic variants in adults. The 23 participants with pathogenic or likely pathogenic variants were disproportionately of European (17) versus African (6) descent. The process of classifying these variants underscores the need for a more comprehensive and diverse centralized resource to provide curated information on pathogenicity for clinical use to minimize health disparities in genomic medicine

Rhetoric But Whose Reality? The Influence of Employability Messages on Employee Mobility Tactics and Work Group Identification

Over the last decade, employability has been presented by its advocates as the solution to employment uncertainty, and by its critics as a management rhetoric possessing little relevance to the experiences of most workers. This article suggests that while employability has failed to develop into a key research area, a deeper probing of its message is warranted. In particular, it is suggested that employability may have resonance with employees as workers rather than as employees of their immediate employing organisation. This demands a slightly different approach to studying employability than some other related phenomena such as employee commitment which has resonance only in relation to the employing organization. In adopting a social identity approach, the significance of the employability message is shown not only to lie in employees’ willingness to disassociate from their existing work groups and pursue individual mobility, but also in its capacity to undermine workers’ collective responses to grievances and unwanted organizational changes. A future research agenda is presented which highlights the need to address recent attempts to develop employability expectations among graduate career entrants, and for a closer critical engagement with management writings that attempt to justify the unnecessary espousal of the self development message

A Phenotypic Mouse Model of Basaloid Breast Tumors

Chemotherapeutic strategies that target basal-like breast tumors are difficult to design without understanding their cellular and molecular basis. Here, we induce tumors in mice by carcinogen administration, creating a phenocopy of tumors with the diagnostic and functional aspects of human triple negative disease (including EGFR expression/lack of erbB, estrogen-independent growth and co-clustering of the transcriptome with other basaloid models). These tumor strains are a complement to established mouse models that are based on mutations in Brca1 and/or p53. Tumors comprise two distinct cell subpopulations, basal and luminal epithelial cells. These cell fractions were purified by flow cytometry, and only basal cell fractions found to have tumor initiating activity (cancer stem cells). The phenotype of serially regenerated tumors was stable, and irrespective of tumor precursor cell. Tumors were passaged entirely in vivo and serial generations tested for their phenotypic stability. The relative chemo-sensitivity of basal and luminal cells were evaluated. Upon treatment with anthracycline, tumors were effectively de-bulked, but recurred; this correlated with maintenance of a high rate of basal cell division throughout the treatment period. Thus, these tumors grow as robust cell mixtures of basal bipotential tumor initiating cells alongside a luminal majority, and the cellular response to drug administration is dominated by the distinct biology of the two cell types. Given the ability to separate basal and luminal cells, and the discovery potential of this approach, we propose that this mouse model could be a convenient one for preclinical studies