Centrality evolution of the charged-particle pseudorapidity density over a broad pseudorapidity range in Pb-Pb collisions at root s(NN)=2.76TeV

Peer reviewe

National and Office-Specific Measures of Auditor Industry Expertise and Effects on Audit Quality

ABSTRACT Our paper examines whether audit quality is higher for industry audit specialists at the national and city-office levels using the framework developed in Ferguson et al. [2003] and Francis et al. [2005]. We find that auditors who are both national and city-specific industry specialists have clients with the lowest abnormal accruals, suggesting that joint national and city-specific industry specialists have the highest audit quality. In addition, we find some evidence that abnormal accruals of firms audited by city-industry specialists alone (without also being national specific industry specialists) are lower than those audited by nonindustry specialists. Using alternative measures of audit quality, we find that when the auditor is both a national and a city-specific industry specialist, its clients are less likely to meet or beat analysts' earnings forecasts by one penny per share and more likely to be issued a going-concern audit opinion. Together these results provide consistent evidence that audit quality is higher when the auditor is both a national and city-specific industry specialist, suggesting that auditors' national positive network synergies and the individual auditors' deep industry knowledge at the office level are jointly important factors in delivering higher audit quality. Copyright (c), University of Chicago on behalf of the Accounting Research Center, 2009.

Voluntary Disclosure of Country-Level Information and FCPA Violations

The Foreign Corrupt Practices Act (FCPA) of 1977 prohibits U.S. listed firms from bribing foreign government officials for business purposes. We examine whether less transparent firms are more likely to violate the FCPA by testing whether their voluntary disclosure of country-level information explains the violation. We hand-collect voluntarily disclosed geographic information for firms cited for FCPA violations and for a matched control group of nonviolators. We test whether less transparent disclosure of operations (sales and long-lived assets) abroad explains whether firms violate the FCPA. We find supporting evidence. Next, we compare the transparency of FCPA violators that self-reported their violations with the transparency of our control group, as well as the transparency of non-self-reporters to the transparency of our control group. Regulators sanction self-reporters with lower penalties than non-self-reporters. We find that the former are as transparent as the nonviolators. Yet, non-self-reporters are less transparent, suggesting that they drive our results. Overall, our results suggest that more transparent reporting of foreign operations is associated with FCPA compliance. Our study contributes to understanding whether voluntary disclosure signals FCPA compliance, following disclosure theory and instrumental stakeholder theory

Does Mandatory IFRS Adoption Affect Audit Effort and its Effectiveness to Constrain Earnings Management

We examine the effect IFRS adoption has had on audit effort and the effectiveness of greater audit effort on constraining earnings management. We find that following Italy's adoption of IFRS, audit hours (but not the hourly rate) increased, suggesting that audit effort (in audit hours) increased following IFRS adoption. We then examine whether more audit hours are associated with improved audit quality in the IFRS regime. Consistent with prior literature (Caramanis and Lennox 2008), we find that more audit effort is associated with lower abnormal accruals in the period before IFRS adoption. Interestingly, after Italy adopted IFRS, abnormal accruals are lower, but audit hours were less associated with lower abnormal accruals, implying that more audit hours are needed to constrain earnings management. Collectively, our empirical analysis suggests that while audit effort increased with mandatory IFRS adoption, the effectiveness of audit effort to constrain earnings management decreased

Does the order of claims to assets on the balance sheet reflect equity risk?

This paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their riskiness. This paper measures a firm’s riskiness with idiosyncratic risk and employs the first-difference design to test the relation between idiosyncratic risk and the order of current liabilities, noncurrent liabilities and preferred stock, respectively. Further, the paper tests whether operating liabilities are viewed as riskier than financial liabilities. Finally, the authors partition their sample based on the degree of financial distress and investigate whether the results differ between the two subsamples. The paper finds that current liabilities are viewed as riskier than noncurrent liabilities and preferred stock is viewed as less risky than current and noncurrent liabilities, consistent with the ordering on the balance sheet. Further, the paper finds that operating liabilities are viewed as riskier than financial liabilities. Finally, the authors find that total liabilities and preferred stock (redeemable and convertible classes) are viewed as riskier for distressed firms than for nondistressed firms. The authors thoroughly investigate the riskiness of several classes of claims and document that the classification of liabilities and preferred stock classes is relevant to common stockholders for assessing their associated risk

The Impact of PCAOB Auditing Standard No. 5, the PCAOB Inspection Regime, and the Great Recession on Audit Fees and Audit Quality

We investigate the coinciding effects of the implementation of Auditing Standard No. 5 (AS5), the change in the Public Company Accounting Oversight Board’s (PCAOB) inspection regime, and the Great Recession on the audit fees and audit quality of accelerated filers. AS5 took effect in November 2007 and promulgated a top-down, risk-based audit approach to SOX 404(b) audits of accelerated filers. Concurrently, the PCAOB adopted a stricter approach to its inspections of audit firms, which encouraged them to improve audit quality and reduce audit fees. Moreover, the Great Recession pressured audit firms to reduce fees. We find that, following the three events, audit fees decreased and quality increased for accelerated filers. We also find that audit fees and audit quality increased for non-accelerated filers, although these filers were not directly affected by AS5

Effects of oral exposure to inorganic mercury on the feeding behaviour and biochemical markers in yellowfin bream (Acanthopagrus australis)

Mercury is a known toxic metal but studies on the effects of inorganic mercury ingestion in aquatic organisms are scarce. The present study aimed to investigate changes in feeding behaviour and biomarkers (lipid peroxidation, acetylcholinesterase, glutathione S-transferase and catalase activities) of yellowfin bream (Acanthopagrus australis) after ingestion of inorganic mercury (control: 0.2 mg kg−1, low: 0.7 mg kg−1, medium: 2.4 mg kg−1and high: 6 mg kg−1) over 16 days. After 4 days, exposed fish attempted feeding more often, and showed a significantly lower eating success than controls. However, these differences became less notable with longer exposure periods. Most biochemical markers varied over time, regardless of mercury treatment. However, biomarker responses to mercury were also observed, mostly with increased exposure period and were dependant on the tissue analysed. This study showed that fish can recover from initial feeding behaviour effects of inorganic mercury, but showed delayed response in tissue biomarkers