The Effect of Partition Dependence on Assessing Accounting Estimates

2017 ◽  
Vol 36 (3) ◽  
pp. 185-197 ◽  
Author(s):  
Christopher J. Wolfe ◽  
Brian C. Fitzgerald ◽  
Nathan J. Newton
Keyword(s):  
Audit Quality ◽  
Decision Makers ◽  
Audit Firms ◽  
Dependence Theory ◽  
Accounting Estimates ◽  
Partition Dependence ◽  
Supplemental Experiment ◽  
Psychological Bias ◽  
Rule Out

SUMMARY When auditors evaluate accounting estimates by testing management's estimation process, both current and proposed guidance call on auditors to review management's consideration of alternative assumptions and outcomes. Using partition dependence theory, a psychological bias that occurs when decision makers review a set of potential outcomes, we hypothesize that management's presentation of alternative estimate outcomes can bias auditors toward a management-preferred estimate. We demonstrate this result in a case-based experiment using senior auditor participants. We also perform two follow-up experiments, using student participants, to rule out competing rationales for our findings. In a final supplemental experiment, we test partition dependence predictions in a risk assessment setting and find results consistent with partition dependence. Our results have audit quality implications and, therefore, should be of interest to both regulators and audit firms. JEL Classifications: M40; M41; M42.

An Empirical Investigation of IPO Underpricing and the Change to the LLP Organization of Audit Firms

2004 ◽  
Vol 23 (1) ◽  
pp. 53-67 ◽  
Author(s):  
Steven R. Muzatko ◽  
Karla M. Johnstone ◽  
Brian W. Mayhew ◽  
Larry E. Rittenberg
Keyword(s):  
Initial Public Offering ◽  
Audit Quality ◽  
Limited Liability ◽  
Litigation Risk ◽  
Ipo Underpricing ◽  
Audit Firm ◽  
Legal Structure ◽  
Audit Firms ◽  
Public Offering

This paper examines the relationship between the 1994 change in audit firm legal structure from general partnerships to limited liability partnerships (LLPs) on underpricing in the initial public offering (IPO) market. The change in legal structure of audit firms reduces an audit firm's wealth at risk from litigation damages and reduces the incentives for intrafirm monitoring by partners within an audit firm. Prior research suggests that underpricing protects underwriters from litigation damages, and that the level of underpricing varies inversely with both the amount of implicit insurance provided by the audit firm and the quality of the audit services provided. We hypothesize the change in audit firm legal structure reduced the assets available from audit firms in IPO-related litigation and indirectly reduced audit quality by lowering intrafirm monitoring. As a result, underwriters have incentives as a joint and several defendant with the audit firms to increase IPO underpricing, particularly for high-litigation-risk IPOs, following audit firms' shifts to LLP status. Our findings are consistent with this hypothesis.

Audit Firms as Networks of Offices

2017 ◽  
Vol 37 (3) ◽  
pp. 211-242 ◽  
Author(s):  
Scott E. Seavey ◽  
Michael J Imhof ◽  
Tiffany J. Westfall
Keyword(s):  
Knowledge Management ◽  
Knowledge Sharing ◽  
Network Effects ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Big 4 ◽  
Audit Firms ◽  
Network Connectedness ◽  
Partner Knowledge ◽  
Office Level

SUMMARY Prior audit research suggests that most, if not all, audit quality can be explained at the office level. However, the question remains of whether office-level audit quality is contingent on how individual offices relate to the firm as a whole. Motivated by theories of knowledge management, organizational learning, and networks, we posit that individual offices are connected to their audit network through partner knowledge sharing and oversight, which impact office-level audit quality. We interview Big 4 audit partners and learn that knowledge sharing between partners in different offices is common and intended to aid in the provision of audit services. Using network connectedness to proxy for knowledge sharing and oversight between offices of the same firm, we document that more connected offices are associated with fewer client restatements and lower discretionary accruals. We additionally find that network effects are magnified when accounting treatments are more complex and require greater auditor judgement.

The Effect of Office Changes within Audit Firms on Clients' Audit Quality and Audit Fees

2020 ◽  
Vol 39 (1) ◽  
pp. 71-99
Author(s):  
Carl W. Hollingsworth ◽  
Terry L. Neal ◽  
Colin D. Reid
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Additional Analysis ◽  
Audit Firm ◽  
Audit Firms ◽  
Audit Fee ◽  
The Impact ◽  
Audit Partner Rotation

SUMMARY While prior research has examined audit firm and audit partner rotation, we have little evidence on the impact of within-firm engagement team disruptions on the audit. To examine these disruptions, we identify a unique sample of companies where the audit firm issuing office changed but the audit firm did not change and investigate the effect of these changes on the audit. Our results indicate that companies that have a change in their audit firm's issuing office exhibit a decrease in audit quality and an increase in audit fees. In additional analysis, we partition office changes into two groups—client driven changes and audit firm driven changes. This analysis reveals that client driven changes are more likely to result in a higher audit fee while audit quality is unchanged. Conversely, audit firm driven changes do not result in a higher audit fee but do experience a decrease in audit quality.

scholarly journals Development and preliminary evaluation of EMPOWER for surrogate decision-makers of critically ill patients

2021 ◽  
pp. 1-11
Author(s):  
Wendy G. Lichtenthal ◽  
Martin Viola ◽  
Madeline Rogers ◽  
Kailey E. Roberts ◽  
Lindsay Lief ◽  
...  
Keyword(s):  
Critically Ill ◽  
Critically Ill Patients ◽  
Experiential Avoidance ◽  
Decision Makers ◽  
Post Intervention ◽  
Prolonged Grief ◽  
Surrogate Decision Makers ◽  
Surrogate Decision ◽  
Peritraumatic Distress

Abstract Objective The objectives of this study were to develop and refine EMPOWER (Enhancing and Mobilizing the POtential for Wellness and Resilience), a brief manualized cognitive-behavioral, acceptance-based intervention for surrogate decision-makers of critically ill patients and to evaluate its preliminary feasibility, acceptability, and promise in improving surrogates’ mental health and patient outcomes. Method Part 1 involved obtaining qualitative stakeholder feedback from 5 bereaved surrogates and 10 critical care and mental health clinicians. Stakeholders were provided with the manual and prompted for feedback on its content, format, and language. Feedback was organized and incorporated into the manual, which was then re-circulated until consensus. In Part 2, surrogates of critically ill patients admitted to an intensive care unit (ICU) reporting moderate anxiety or close attachment were enrolled in an open trial of EMPOWER. Surrogates completed six, 15–20 min modules, totaling 1.5–2 h. Surrogates were administered measures of peritraumatic distress, experiential avoidance, prolonged grief, distress tolerance, anxiety, and depression at pre-intervention, post-intervention, and at 1-month and 3-month follow-up assessments. Results Part 1 resulted in changes to the EMPOWER manual, including reducing jargon, improving navigability, making EMPOWER applicable for a range of illness scenarios, rearranging the modules, and adding further instructions and psychoeducation. Part 2 findings suggested that EMPOWER is feasible, with 100% of participants completing all modules. The acceptability of EMPOWER appeared strong, with high ratings of effectiveness and helpfulness (M = 8/10). Results showed immediate post-intervention improvements in anxiety (d = −0.41), peritraumatic distress (d = −0.24), and experiential avoidance (d = −0.23). At the 3-month follow-up assessments, surrogates exhibited improvements in prolonged grief symptoms (d = −0.94), depression (d = −0.23), anxiety (d = −0.29), and experiential avoidance (d = −0.30). Significance of results Preliminary data suggest that EMPOWER is feasible, acceptable, and associated with notable improvements in psychological symptoms among surrogates. Future research should examine EMPOWER with a larger sample in a randomized controlled trial.

scholarly journals Myopericytoma in the Antitragus of the Auricle: A Rare Tumor

2020 ◽  
pp. 014556132098457
Author(s):  
Tae Seong Eo ◽  
Jeong Hae Kie ◽  
Hyun Seung Choi ◽  
Junhui Jeong
Keyword(s):  
Large Firm ◽  
Rare Tumor ◽  
Long Term Follow Up ◽  
Slow Growing ◽  
Rule Out

A myopericytoma in the auricle is rare. If an auricle contains a large, firm, red-brown mass, excision should be considered because the mass may be a myopericytoma. After excision, histopathological and immunohistochemical diagnoses are essential to rule out malignancy. Long-term follow-up is required because the tumor is slow-growing.

scholarly journals New screening approach to detecting congenital syphilis in China: a retrospective cohort study

2020 ◽  
pp. archdischild-2020-320549
Author(s):  
Fang Hu ◽  
Shuai-Jun Guo ◽  
Jian-Jun Lu ◽  
Ning-Xuan Hua ◽  
Yan-Yan Song ◽  
...  
Keyword(s):  
Predictive Value ◽  
Congenital Syphilis ◽  
Area Under The Curve ◽  
Diagnostic Tools ◽  
Operating Characteristics ◽  
Loss To Follow Up ◽  
Sensitivity Specificity ◽  
Mother To Child ◽  
Rule Out

BackgroundDiagnosis of congenital syphilis (CS) is not straightforward and can be challenging. This study aimed to evaluate the validity of an algorithm using timing of maternal antisyphilis treatment and titres of non-treponemal antibody as predictors of CS.MethodsConfirmed CS cases and those where CS was excluded were obtained from the Guangzhou Prevention of Mother-to-Child Transmission of syphilis programme between 2011 and 2019. We calculated sensitivity, specificity, positive predictive value (PPV) and negative predictive value (NPV) using receiver operating characteristics (ROC) in two situations: (1) receiving antisyphilis treatment or no-treatment during pregnancy and (2) initiating treatment before 28 gestational weeks (GWs), initiating after 28 GWs or receiving no treatment for syphilis seropositive women.ResultsAmong 1558 syphilis-exposed children, 39 had confirmed CS. Area under the curve, sensitivity and specificity of maternal non-treponemal titres before treatment and treatment during pregnancy were 0.80, 76.9%, 78.7% and 0.79, 69.2%, 88.7%, respectively, for children with CS. For the algorithm, ROC results showed that PPV and NPV for predicting CS were 37.3% and 96.4% (non-treponemal titres cut-off value 1:8 and no antisyphilis treatment), 9.4% and 100% (non-treponemal titres cut-off value 1:16 and treatment after 28 GWs), 4.2% and 99.5% (non-treponemal titres cut-off value 1:32 and treatment before 28 GWs), respectively.ConclusionsAn algorithm using maternal non-treponemal titres and timing of treatment during pregnancy could be an effective strategy to diagnose or rule out CS, especially when the rate of loss to follow-up is high or there are no straightforward diagnostic tools.

Leaving a joint audit system: conditional fee reductions

2014 ◽  
Vol 29 (2) ◽  
pp. 131-152 ◽  
Author(s):  
Claus Holm ◽  
Frank Thinggaard
Keyword(s):  
Audit Quality ◽  
Theory Development ◽  
Future Research ◽  
Research Approach ◽  
Content Type ◽  
Audit Firm ◽  
Audit System ◽  
Interaction Terms ◽  
Audit Firms ◽  
Audit Fee

Purpose – The authors aim to exploit a natural experiment in which voluntary replace mandatory joint audits for Danish listed companies and analyse audit fee implications of using one or two audit firms. Design/methodology/approach – Regression analysis is used. The authors apply both a core audit fee determinants model and an audit fee change model and include interaction terms. Findings – The authors find short-term fee reductions in companies switching to single audits, but only where the former joint audit contained a dominant auditor. The authors argue that in this situation bargaining power is more with the auditors than in an equally shared joint audit, and that the auditors' incentives to offer an initial fee discount are bigger. Research limitations/implications – The number of observations is constrained by the small Danish capital market. Future research could take a more qualitative research approach, to examine whether the use of a single audit firm rather than two has an effect on audit quality. The area calls for further theory development covering audit fee and audit quality in joint audit settings. Practical implications – Companies should consider their relationship with their auditors before deciding to switch to single auditors. Fee discounts do not seem to reflect long-lasting efficiency gains on the part of the audit firm. Originality/value – Denmark is the first country to leave a mandatory joint audit system, so this is the first time that it is possible to study fee effects related to this.

scholarly journals Prospective Evaluation of Serum β-Glucan Testing in Patients With Probable or Proven Fungal Diseases

2016 ◽  
Vol 3 (3) ◽  
Author(s):  
Cécile Angebault ◽  
Fanny Lanternier ◽  
Frédéric Dalle ◽  
Cécile Schrimpf ◽  
Anne-Laure Roupie ◽  
...  
Keyword(s):  
Clinical Utility ◽  
Clinical Suspicion ◽  
Fungal Diseases ◽  
Prospective Evaluation ◽  
Invasive Fungal Diseases ◽  
Undetectable Serum ◽  
Antifungal Use ◽  
Kinetics Of ◽  
Rule Out

Abstract Background.  Early diagnosis and treatment are crucial in invasive fungal diseases (IFD). Serum (1-3)-β-d-glucan (BG) is believed to be an early IFD marker, but its diagnostic performance has been ambiguous, with insufficient data regarding sensitivity at the time of IFD diagnosis (TOD) and according to outcome. Whether its clinical utility is equivalent for all types of IFD remains unknown. Methods.  We included 143 patients with proven or probable IFD (49 invasive candidiasis, 45 invasive aspergillosis [IA], and 49 rare IFD) and analyzed serum BG (Fungitell) at TOD and during treatment. Results.  (1-3)-β-d-glucan was undetectable at TOD in 36% and 48% of patients with candidemia and IA, respectively; there was no correlation between negative BG results at TOD and patients' characteristics, localization of infection, or prior antifungal use. Nevertheless, patients with candidemia due to Candida albicans were more likely to test positive for BG at TOD (odds ratio = 25.4, P = .01) than patients infected with other Candida species. In 70% of the patients with a follow-up, BG negativation occurred in >1 month for candidemia and >3 months for IA. A slower BG decrease in patients with candidemia was associated with deep-seated localizations (P = .04). Thirty-nine percent of patients with rare IFD had undetectable BG at TOD; nonetheless, all patients with chronic subcutaneous IFD tested positive at TOD. Conclusions.  Undetectable serum BG does not rule out an early IFD, when the clinical suspicion is high. After IFD diagnostic, kinetics of serum BG are difficult to relate to clinical outcome.

Effectiveness of Treatment for Dissociative Identity Disorder

1998 ◽  
Vol 83 (2) ◽  
pp. 483-490 ◽  
Author(s):  
Russell A. Powell ◽  
Andrew J. Howell
Keyword(s):  
Dissociative Identity Disorder ◽  
Initial Assessment ◽  
Systematic Research ◽  
Millon Clinical Multiaxial Inventory ◽  
Effect Of Treatment ◽  
Severe Pathology ◽  
Differential Responsiveness ◽  
Rule Out ◽  
Statistical Criteria

In a recent study by Ellason and Ross, patients with Dissociative Identity Disorder reported a decrease in symptoms on the Millon Clinical Multiaxial Inventory–II over a 2-yr. follow-up period. Patients judged to have achieved integration of their personalities rated themselves as more substantially improved on the Millon–II than did patients judged not to have achieved integration. Ellason and Ross suggested that this improvement reflected the influence of treatment; however, for several reasons, their findings are open to alternative interpretations. First, in the absence of proper control conditions, one cannot rule out the contribution of other factors to the over-all improvement of patients such as regression of symptoms toward the mean following the initial assessment. Second, patients' self-reported improvement was less substantial when data were reanalyzed using more appropriate statistical criteria. Third, the greater improvement observed among integrated patients relative to nonintegrated patients may reflect influences other than differential responsiveness to treatment, such as less severe pathology prior to treatment. More systematic research is needed to clarify the effect of treatment on Dissociative Identity Disorder.

We Should Widen Access to Physician-Assisted Death

2021 ◽  
pp. 1-31
Author(s):  
Jordan MacKenzie ◽  
Adam Lerner
Keyword(s):  
Advance Directives ◽  
Terminally Ill ◽  
Decision Makers ◽  
Assisted Death ◽  
Surrogate Decision Makers ◽  
Incapacitated Patients ◽  
Surrogate Decision ◽  
Rule Out

Abstract Typical philosophical discussions of physician-assisted death (“pad”) have focused on whether the practice can be permissible. We address a different question: assuming that pad can be morally permissible, how far does that permission extend? We will argue that granting requests for pad may be permissible even when the pad recipient can no longer speak for themselves. In particular, we argue against the ‘competency requirement’ that constrains pad-eligibility to presently-competent patients in most countries that have legalized pad. We think pad on terminally ill, incapacitated patients can be morally permissible in cases where advance directives or suitable surrogate decision-makers are available, and should be legally permissible in such cases as well. We argue that this view should be accepted on pain of inconsistency: by allowing surrogate decision-makers to request withdrawal of life-sustaining care on behalf of patients and by allowing patients to request pad, we rule out any plausible justification for imposing a competency requirement on pad.

Sign in / Sign up

Export Citation Format

Share Document