The Customer Flow in Chinese Audit Market after SEC Punishment

Based on the situation of customers change of the 27 accounting firms punished by China Securities Regulatory Commission (CSRC) in the capital market of China from 1999 to 2016, this paper found the CSRC punishment will cause those clients requiring high financial statement quality to change firm. However, the customers caring more about audit discount and long-term cooperation relationship with auditors will choose to stay. This shows that the intimate relationship between auditors and customers as well as audit cost discount can increase Switching Cost, thus offsetting "Signaling" effect and slowing the customer churn from firm which already received administrative penalty. However, the regulation does not change the fact that the financial report quality of remaining customers is not high.

Flow Merging and Hub Route Optimization in Collaborative Transportation

This paper studies the optimal hub routing problem of merged tasks in collaborative transportation. This problem allows all carriers’ transportation tasks to reach the destinations optionally passing through 0, 1, or 2 hubs within limited distance, while a cost discount on arcs in the hub route could be acquired after paying fixed charges. The problem arises in the application of logistics, postal services, airline transportation, and so forth. We formulate the problem as a mixed-integer programming model, and provide two heuristic approaches, respectively, based on Lagrangian relaxation and Benders decomposition. Computational experiments show that the algorithms work well.

Calculating the Social Opportunity Cost Discount Rate

Two comments in this issue of the Journal address our recent article in Volume 2, Issue 2. The fundamental issue with both comments is that they confuse the financial rate of return with the opportunity cost rate of return and therefore advocate for an inappropriate basis on which to calculate the government discount rate. That is, both comments confuse the financial cost of funds, or the borrowing rate, with the economic opportunity cost of funds. We hope that this exchange advances the subject by reducing confusion.

Advantages and disadvantages of the use of compact fluorescent lamps with electronic control gear

The paper presents a comprehensive analysis dealing with the behaviour and economics of electronic compact fluorescent lamps. The economic analysis, based on the results of the test concerning the lifetime and the lamp lumen maintenance factor of electronic compact fluorescent lamps, and conducted using the cost-discount method, showed an obvious advantage for lamps of this type compared with incandescent ones. The strategic importance of the mass use of electronic compact fluorescent lamps, as well as serious power quality implications it can cause to the network, are explained in detail. Possible solutions of this problem are also presented.