The quality of mandatory non-financial (risk) disclosures: the moderating role of audit firm and partner characteristics

Risk disclosures are among the most important types of non-financial information valued by investors. Risk disclosures are mostly narrative, proprietary in nature and, consequently, the importance of their accuracy and assurance is high to prevent them becoming boiler-plate and lose their relevance. By exploiting the unique features of a setting in which risk disclosure is mandatory and under a positive assurance requirement, we investigate whether the quality of audited risk disclosures is associated with the type of audit firm (Big-4 vs. non-Big-4), the characteristics of the audit firm and the attributes of the audit partner. Our results show an association between risk disclosure quality and auditors, but not in the ways that one would have expected. After the enforcement of a regulation that requires a detailed description of risks in the Operating and Financial Review (OFR) and a positive assurance of external audit over these disclosures, we do not document any significant Big-4 effect. The quality of risk disclosures is associated with the attributes of the audit partner, namely familiarity with different client risk disclosures, expertise and gender, independently from her belonging to a Big-4 audit firm. Along this way, we extend the recent evidence on the audit partner effects in the assurance of non-financial narrative information

Board monitoring and internal control system disclosure in different regulatory environments

Article"This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited."Purpose This paper investigates two research questions: Is ICS disclosure, as a monitoring mechanism, associated with the characteristics of the board of directors, particularly the audit committee as the main board committee devoted to the effectiveness of ICS? Does the regulatory environment, particularly the regulation on ICS disclosure as an external governance/monitoring mechanism play a role in shaping the relationship between board monitoring and ICS disclosure and, if so, how? Design/methodology/approachWe study the ICS disclosure of 149 companies listed in four European financial markets (London, Paris, Frankfurt, and Milan), each with its own regulations about ICS disclosure, during a six-year period (2003–2008). Findings Our findings support an inverse association between the extent of ICS disclosure and our proxies for board monitoring. We also find a statistically significant negative relationship between board monitoring and substantial ICS disclosure but no relationship between board monitoring and formal ICS disclosure. Our evidence also shows that the regulatory environment moderates the relationship between board monitoring and ICS disclosure by introducing trade-offs among monitoring mechanisms. Research limitations/implications An important caveat of our research is that we do not provide evidence on the way users can make the availability of substantial information on the effective functioning of ICS a useful tool for their monitoring activity. Practical implications We propose a framework for the analysis of ICS disclosure that overcomes limitations of previous literature that has neglected the importance of the content beyond the extent of ICS disclosure. Through this framework researchers, practitioners and standard setters are able to separate merely descriptive, formal un-useful disclosure (boilerplate information) on the composing elements of the ICS from substantial disclosure regarding the functioning of the ICS (monitoring function). Originality/value We propose a framework for the analysis of ICS disclosure that considers the importance of the content of ICS disclosure, rather than its extent. Through this framework, researchers, practitioners, and standard-setters can separate merely formal, uninformative disclosure (boilerplate information) on the elements of the ICS from substantial disclosure regarding its functioning (monitoring function). We also provide evidence that the relationship between board monitoring and ICS disclosure varies with the content of the information communicated, thus offering guidance for future research not to focus on measuring the extent or quantity of disclosure but on the variety and complexity of the information communicated

Quantifying the Impact of Spatiotemporal Resolution on the Interpretation of Fluvial Geomorphic Feature Dynamics From Sentinel 2 Imagery: An Application on a Braided River Reach in Northern Italy

Machine learning algorithms applied on the publicly available Sentinel 2 images (S2) are opening the opportunity to automatically classify and monitor fluvial geomorphic feature (such as sediment bars or water channels) dynamics across scales. However, there are few analyses on the relative importance of S2 spatial versus temporal resolution in the context of geomorphic research. In a dynamic, braided reach of the Sesia River (Northern Italy), we thus analyzed how the inherent uncertainty associated with S2's spatial resolution (10 m pixel size) can impact the significance of the active channel (a combination of sediment and water) delineation, and how the S2's weekly temporal resolution can influence the interpretation of its evolutionary trajectory. A comparison with manually classified images at higher spatial resolutions (Planet: 3 m and orthophoto: 0.3 m) shows that the automatically classified water is ∼20% underestimated whereas sediments are ∼30% overestimated. These classification errors are smaller than the geomorphic changes detected in the 5 years analyzed, so the derived active channel trajectory can be considered robust. The comparison across resolutions also highlights that the yearly Planet‐ and S2‐derived active channel trajectory are analogous and they are both more effective in capturing the river geomorphic response after major flood events than the trajectory derived from sequential multiannual orthophotos. More analyses of this type, across different types of river could give insights on the transferability of the spatial uncertainty boundaries found as well as on the spatial and temporal resolution trade‐off needed for supporting different geomorphic analyses

The transcription factor Kruppel homolog 1 is linked to the juvenile hormone-dependent maturation of sexual behavior in the male moth, Agrotis ipsilon

In the male moth, Agrotis ipsilon, the behavioral response and neuronal sensitivity in the primary olfactory center, the antennal lobe (AL), to sex pheromone increase with age and juvenile hormone (JH) biosynthesis. Although JH has been shown to control this age-dependent plasticity, the underlying signaling pathway remains obscure. In this context, we cloned a full cDNA encoding the Kruppel homolog 1 transcription factor (AipsKr-h1) of A. ipsilon, which was found to be predominantly expressed in ALs, where its amount increased concomitantly with age and sex pheromone responses. Conversely, the expression of AipsKr-h1 protein in the antenna was age-independent. Moreover, the administration of JH in immature males or fluvastatin, an inhibitor of JH biosynthesis, in mature males induced an increase or a decline of the AipsKr-h1 protein level in ALs, respectively. This effect was suppressed with a combined injection of fluvastatin and JH. Our results showed that Aipskr-h1 is a JH-upregulated gene that might mediate JH action on central pheromone processing, modulating sexual behavior in A. ipsilon

Degradation of Pheromone and Plant Volatile Components by a Same Odorant-Degrading Enzyme in the Cotton Leafworm, Spodoptera littoralis

Background: Odorant-Degrading Enzymes (ODEs) are supposed to be involved in the signal inactivation step within the olfactory sensilla of insects by quickly removing odorant molecules from the vicinity of the olfactory receptors. Only three ODEs have been both identified at the molecular level and functionally characterized: two were specialized in the degradation of pheromone compounds and the last one was shown to degrade a plant odorant. Methodology: Previous work has shown that the antennae of the cotton leafworm Spodoptera littoralis , a worldwide pest of agricultural crops, express numerous candidate ODEs. We focused on an esterase overexpressed in males antennae, namely SlCXE7. We studied its expression patterns and tested its catalytic properties towards three odorants, i.e. the two female sex pheromone components and a green leaf volatile emitted by host plants. Conclusion: SlCXE7 expression was concomitant during development with male responsiveness to odorants and during adult scotophase with the period of male most active sexual behaviour. Furthermore, SlCXE7 transcription could be induced by male exposure to the main pheromone component, suggesting a role of Pheromone-Degrading Enzyme. Interestingly, recombinant SlCXE7 was able to efficiently hydrolyze the pheromone compounds but also the plant volatile, with a higher affinity for the pheromone than for the plant compound. In male antennae, SlCXE7 expression was associated with both long and short sensilla, tuned to sex pheromones or plant odours, respectively. Our results thus suggested that a same ODE could have a dual function depending of it sensillar localisation. Within the pheromone-sensitive sensilla, SlCXE7 may play a role in pheromone signal termination and in reduction of odorant background noise, whereas it could be involved in plant odorant inactivation within the short sensilla

Degradation of Pheromone and Plant Volatile Components by a Same Odorant-Degrading Enzyme in the Cotton Leafworm, Spodoptera littoralis

Background: Odorant-Degrading Enzymes (ODEs) are supposed to be involved in the signal inactivation step within the olfactory sensilla of insects by quickly removing odorant molecules from the vicinity of the olfactory receptors. Only three ODEs have been both identified at the molecular level and functionally characterized: two were specialized in the degradation of pheromone compounds and the last one was shown to degrade a plant odorant. Methodology: Previous work has shown that the antennae of the cotton leafworm Spodoptera littoralis , a worldwide pest of agricultural crops, express numerous candidate ODEs. We focused on an esterase overexpressed in males antennae, namely SlCXE7. We studied its expression patterns and tested its catalytic properties towards three odorants, i.e. the two female sex pheromone components and a green leaf volatile emitted by host plants. Conclusion: SlCXE7 expression was concomitant during development with male responsiveness to odorants and during adult scotophase with the period of male most active sexual behaviour. Furthermore, SlCXE7 transcription could be induced by male exposure to the main pheromone component, suggesting a role of Pheromone-Degrading Enzyme. Interestingly, recombinant SlCXE7 was able to efficiently hydrolyze the pheromone compounds but also the plant volatile, with a higher affinity for the pheromone than for the plant compound. In male antennae, SlCXE7 expression was associated with both long and short sensilla, tuned to sex pheromones or plant odours, respectively. Our results thus suggested that a same ODE could have a dual function depending of it sensillar localisation. Within the pheromone-sensitive sensilla, SlCXE7 may play a role in pheromone signal termination and in reduction of odorant background noise, whereas it could be involved in plant odorant inactivation within the short sensilla