Key audit risks and audit procedures during the initial year of the COVID-19 pandemic: an analysis of audit reports 2019-2020

Purpose The purpose of this study is to explore audit procedure disclosures related to key audit risks, during the prior year and the initial year of the COVID-19 outbreak, by reporting on matters published in over 3,000 Australian statutory audit reports during 2019 and 2020. Design/methodology/approach This study partially uses latent semantic analysis methods to apply textual and readability analyses to external audit reports in Australia. The authors measure the tone of the audit reports using the Loughran and McDonald (2011) approach. Findings The authors find that 3% of audit procedures undertaken during 2020 were designed to address audit risks associated with the COVID-19 pandemic. As a percentage of total audit procedures undertaken during 2020, the authors find that smaller practitioners reported much less audit procedures related to COVID-19 audit risks than most larger audit firms. Finally, the textual analysis further found differences in the sentiment or tone of words used by different auditors in 2020, but differences in sentiment or tone were not found when 2020 was compared to the prior year 2019. Originality/value This study provides early evidence on whether auditors designed audit procedures to deal specifically with audit risks that arose due to the COVID-19 pandemic and on the extent and nature of those audit procedures. The study will help policymakers to better understand whether Key Audit Matters provided informational value to investors during a time of global crisis.

WhatsApp Generation in Zoom University: Online Pedagogical Challenges and Innovations

Management education has undergone significant changes owing to the COVID-19 pandemic. The classroom delivery has moved from an offline mode to a completely online mode, unravelling many pedagogical challenges and constraints. This study explores the pedagogical challenges faced by academicians and the innovative remedial measures adopted by them. This study follows an inductive approach using qualitative interviews and uses the cognitive apprenticeship model as the theoretical underpinning. Findings indicate that all domain aspects of the cognitive apprenticeship model are not equally relevant in an online teaching scenario compared to offline teaching. Findings also indicate that the interpersonal and communicational aspects of the learning environment have gained more prominence in online teaching. This article contributes to the existing literature by bringing early evidence on the challenges and innovations in online teaching. In addition, this study also contributes to the understanding of the cognitive apprenticeship model in an online scenario. Even though the scope of the study was limited to academicians from the finance and accounting area, the findings are globally relevant. They have practical implications for other disciplines as well. JEL Classification Codes: M0, I20, I29, Y7

Evaluation of a predictive method for the H&E-based molecular profiling of breast cancer with deep learning

We present a public validation of PANProfiler (ER, PR, HER2), an in-vitro medical device (IVD) that predicts the qualitative status of estrogen receptor (ER), progesterone receptor (PR) and human epidermal growth factor receptor 2 (HER2) by analysing the hematoxylin and eosin (H&E)-stained tissue scan. In public validation on 648 (ER), 648 (PR) and 560 (HER2) unseen cases with known biomarker status, the device achieves an accuracy of 87% (ER), 83% (PR) and 87% (HER2). The validation offers early evidence of the ability to predict clinically relevant breast biomarkers from an H&E slide in a relevant clinical setting.

Analysis of SARS-CoV-2 Omicron Neutralization Data up to 2021-12-22

The rapid spread of the Omicron SARS-CoV-2 variant (B.1.1.529) resulted in international efforts to quickly assess its escape from immunity generated by vaccines and previous infections. Numerous laboratories published Omicron neutralization data as preprints and reports. The understandable limitations and variability in such rapid reporting of early results however made it difficult to make definitive statements about the data. Here, we aggregate and analyze Omicron neutralization data from 23 reporting laboratories up to 2021-12-22. There are enough data to identify multiple trends and make two definitive points. First, in twice-vaccinated individuals, titer fold drop of Omicron relative to wild type is more than 19x, likely substantially more given the number of measurements below the limit of detection of the assay. Second, out to one month post third vaccination with an mRNA vaccine, or twice vaccinated after an earlier infection, the titer fold drop to Omicron is substantially less at approximately 7x. This substantially lower fold drop and somewhat higher titers after 3rd vaccination are strong early evidence for the utility of booster vaccination.

Regional trends in births during the COVID-19 crisis in France, Germany, Italy, and Spain

Early evidence shows mixed effects of the COVID-19 pandemic on births in Europe. This study examines changes in births at the regional level in the four European countries that have been affected by the pandemic earlier and to a larger extent. It is also investigated the association between birth changes and some labour market characteristics, the pandemic impact in terms of COVID-deaths, and the share of population at risk of poverty. Results show considerable within-country heterogeneity in birth changes after the pandemic and that higher share of poverty, worse labour market performance, and higher excess mortality are associated with births decline.

The joint effect of supervisor influence and investor perspective: unintended consequences on assessing accounting estimates

Purpose The purpose of this paper is to examine the joint effect of supervisor influence and investor perspective on novice auditors’ assessments of accounting estimates. Design/methodology/approach The experiment used a 2 × 2 between-subjects design, randomly assigning proxies of novice auditors among four conditions. The authors manipulated the supervisor’s level of emphasis on evidence that suggests accounting estimate adjustment and whether auditors are prompted to take an investor perspective. Participants were asked to assess the misstatement risk of the allowance for doubtful accounts of the client company. Findings The authors find that auditors assign a higher (lower) risk of misstatement when their supervisor places high (low) emphasis on evidence suggesting accounting adjustment. The authors also find that contrary to the belief that taking the perspective of investors could enhance objectivity and independence, investor perspective leads to a decrease (rather than an increase) in auditors’ perceived risk of misstatement when the supervisor places low emphasis on evidence suggesting accounting adjustment. Originality/value This study provides early evidence on the efficacy of investor perspective and is one of the first to document an unintended consequence of asking auditors to take an investor perspective.