‘Pitted but not pitied’ or,does smallpox make you small?1

This article examines three propositions put by Leunig and Voth: that smallpox reduced stature irrespective of location, that stunting was most apparent among adolescents, and that these relationships were obscured in my earlier work by small sample size. It tests these claims by re‐examining the original data—including the neglected Wandsworth data set—and questioning the meaning of the chosen method of graphical representation. Furthermore, and most fundamentally, the relationship between smallpox and stunting is advanced by adding new data on a further 34,310 prisoners. Using considerably larger data sets with many more juveniles, and refined definitions of rural and urban locations, this article confirms that the ‘smallpox effect’ varied by location, age, gender, and time period. That the relationship between smallpox and stunting was mediated through place and time suggests the role played by evolving urban conditions. The article offers a warning on the dangers of aggregating data without paying heed to important composition effects, and it argues that size does matter: the size of the smallpox effect, population size, sample size, and the size of the p‐statistic. The reply concludes by again questioning the likely causes of stunting in the world’s first great metropolis, London, arguing for the importance of examining chronic illness as a source of ongoing nutritional insult.     

Urban inoculation and the decline of smallpox mortality in eighteenth‐century cities—a reply to Razzell

Smallpox was probably the single most lethal disease in eighteenth‐century Britain but was reduced to a minor cause of death by the mid‐nineteenth century due to vaccination programmes post‐1798. While the success of vaccination is unquestionable, it remains disputed to what extent the prophylactic precursor of vaccination, inoculation, reduced smallpox mortality in the eighteenth century. Smallpox was most lethal in urban populations, but most researchers have judged inoculation to have been unpopular in large towns. Recently, however, Razzell argued that inoculation significantly reduced smallpox mortality of adults and older children in London in the last third of the eighteenth century. This article uses demographic evidence from London and Manchester to confirm previous findings of a sudden fall in adult smallpox mortality and a rise in the importance of smallpox in early childhood c. 1770. The nature of these changes is consistent with an increase in smallpox transmission in London and Manchester after 1770 and indicates that smallpox inoculation was insufficient to reduce smallpox mortality in large towns. It remains unclear whether inoculation could have operated to enhance smallpox transmission or whether changes in the properties of the smallpox virus drove the intensification of smallpox mortality among young children post‐1770.     

Do Accounting Firm Consulting Revenues Affect Audit Quality? Evidence from the Pre‐ and Post‐SOX Eras

In recent years, public accounting firms have experienced a steady increase in the proportion of their revenues generated from consulting services. Although growth in consulting revenue following the Sarbanes‐Oxley Act (SOX) has been generated primarily from services provided to nonaudit clients, regulators have expressed concerns about the potential implications of this increase for audit quality. In contrast, accounting firms assert that the expertise developed by their consulting professionals helps them to provide better quality audits. We examine the relation between the proportion of accounting firm consulting revenue to total revenue and audit quality and investor perceptions of audit quality. Because SOX drastically altered the source of consulting revenues for public accounting firms, we also separately examine these relations in the pre‐ and post‐SOX eras. We find evidence suggesting that before SOX, higher proportions of audit firm consulting revenues negatively impacted both audit quality and investor perceptions of audit quality. However, we do not find a statistically significant association between audit firm consulting revenues and either audit quality or investor perceptions of audit quality following SOX. Our analyses suggest that even if these relations exist following SOX, the potential economic magnitude of the effect is small.     

Dynamics of Child Malnutrition in Rural and Small‐Town Ethiopia

Improving the status of malnourished children, and preventing children from becoming malnourished, lies at the heart of several of the Sustainable Development Goals. While many cross‐sectional studies examine correlates of stunting, they largely cannot identify drivers of change in stunting. We use two waves of panel data from Ethiopia and incrementally larger sets of fixed effects to control for time‐variant observable characteristics and time‐invariant unobservable characteristics. After controlling for these potential confounders, our analysis reveals that many factors that are associated with stunting in the cross‐section do not impact stunting dynamics. We also estimate individual fixed‐effects regressions, separately, according to baseline stunting status. We find evidence suggesting that while improved societal conditions drive many children out of a stunted state, certain exogenous factors may lead previously healthy children to become stunted. Overall, policymakers and practitioners would be wise to consult research utilising both cross‐sectional and panel data analyses in order to more effectively target already stunted children as well as vulnerable children who may be at risk of becoming stunted.     

Cities,market integration,and going to sea: stunting and the standard of living in early nineteenth‐century England and Wales1

A new source, 1840s Admiralty seamen's tickets, is used to explore three anthropometric issues. First, did being born in a city, with its associated disamenities, lead to stunting? Second, did being born near a city, whose markets sucked away foodstuffs, lead to stunting? Third, did child labour lead to stunting? We find that only those born in very large cities suffered a level of stunting that contemporaries could have observed. Being born near a city, which gave parents opportunities to trade away family calories, and perhaps increased exposure to disease, did not cause stunting. Britain was a well‐integrated market; all families, whatever their locations, had options to trade and faced similar disease environments. Finally, although adults who had gone to sea young were shorter than those who did not enlist until fully grown, going to sea did not stunt. Instead, plentiful food at sea attracted stunted adolescents, who reversed most of their stunting as a result. But child labour at sea was different from other forms of children's work because wages were largely hypothecated to the child as food and shelter onboard. In contrast, where wages were paid to the child or his parents in cash, they became submerged in the household economy and their benefits were shared with other family members.     

萨班斯法案视角下我国注册会计师行业诚信体系的构建

萨班斯法案的颁布与实施,对注册会计师行业诚信问题的监管模式及行业发展产生示范效应。本文首先考察了萨班斯法案在加强注册会计师行业诚信方面的新举措,继而分析我国注册会计师行业诚信存在的问题,最后提出了萨班斯法案新视角下构建我国注册会计师行业诚信体系的路径选择。     

The decline of adult smallpox in eighteenth-century London: a commentary

This article is a response to Davenport, Schwarz, and Boulton's article, ‘The decline of adult smallpox in eighteenth-century London’. It introduces new data on the parish of St Mary Whitechapel which casts doubt on the pattern of the age incidence of smallpox found by Davenport et al. However, it is concluded that there was a decline in adult smallpox in London, accompanied by a concentration of the disease among children under the age of five. Davenport et al.'s argument that the shift in the age incidence was due to the endemicization of smallpox in England is challenged, with an alternative view that these age changes can be accounted for by the practice of inoculation, both in the hinterland southern parishes of England and in London itself. A detailed discussion is carried out on the history of inoculation in London for the period 1760–1812. It is suggested that inoculation became increasingly popular in this period, rivalling in popularity the practice of vaccination. This was associated with a class conflict between the medical supporters of Jenner and the general population, with many of the latter being practitioners of the old inoculation.     

The decline of adult smallpox in eighteenth-century London

Smallpox was probably the single most lethal disease in eighteenth-century Britain, but was a minor cause of death by the mid-nineteenth century. Although vaccination was crucial to the decline of smallpox, especially in urban areas, from the beginning of the nineteenth century, it remains disputed the extent to which smallpox mortality declined before vaccination. Analysis of age-specific changes in smallpox burials within the large west London parish of St Martin-in-the-Fields revealed a precipitous reduction in adult smallpox risk from the 1770s, and this pattern was duplicated in the east London parish of St Dunstan's. Most adult smallpox victims were rural migrants, and such a drop in their susceptibility is consistent with a sudden increase in exposure to smallpox in rural areas. We investigated whether this was due to the spread of inoculation, or an increase in smallpox transmission, using changes in the age patterns of child smallpox burials. Smallpox mortality rose among infants, and smallpox burials became concentrated at the youngest ages, suggesting a sudden increase in infectiousness of the smallpox virus. Such a change intensified the process of smallpox endemicization in the English population, but also made cities substantially safer for young adult migrants.     

Inequities in under-five child nutritional status in South Africa: What progress has been made?

Despite the emphasis given to poverty reduction in policy statements and a substantial increase in social spending, money-metric poverty has shown little improvement since South Africa's transition to democracy in 1994. Alternative approaches to measuring well-being and inequality may show a more positive trend. This article uses the 2008 National Income Dynamics Study to assess the magnitude of inequalities in under-five child malnutrition ascribable to economic status. The article compares these results with those of Zere and McIntyre, who analysed similar data collected in 1993. In both cases, household income, proxied by per-capita household expenditure, was used as the indicator of socio-economic status. Children's heights and weights have increased since 1993 and being stunted or underweight has become less common. Furthermore, pro-rich inequalities in stunting and being underweight have significantly declined since the end of apartheid. This suggests that pro-poor improvements in child welfare have taken place. Policies that may have contributed to this include the Child Support Grant, introduced in 1998, and improvements in healthcare and the education of women.     

Readability of 10‐K Reports and Stock Price Crash Risk

This study shows that less readable 10‐K reports are associated with higher stock price crash risk. The results are consistent with the argument that managers can successfully hide adverse information by writing complex financial reports, which leads to stock price crashes when the hidden bad news accumulates and reaches a tipping point. Cross‐sectional analyses show that the effect of financial reporting complexity on crash risk is more pronounced for firms with persistent negative earnings news or transitory positive earnings news, greater chief executive officer stock option incentives, or lower litigation risk. Finally, accrual manipulation appears to be positively related to crash risk, even since the Sarbanes‐Oxley Act, if the manipulation is accompanied by complex 10‐K reports.     

Official Development Assistance and Foreign Direct Investment Flows to Sub‐Saharan Africa

Abstract: Foreign direct investment is believed to have a positive impact on the economies of the developing countries but its determinants are not yet fully established. This paper empirically investigates the relationship between official development assistances and foreign direct investment flows using panel data from 11 sub‐Saharan African countries for the period 1990–2003. The results show that bilateral official development assistance has a significant and positive influence on foreign direct investment flows. The results also show that trade openness, growth rate in the labor force, and exchange rates have a positive and significant effect on foreign direct investment flows. But multilateral development assistance, the growth rate in GDP per capita, the country's composite risk level, and the index for political freedom and civil liberties do not have a statistically significant effect on foreign direct investment flows. The policy implication of the positive and significant influence of the bilateral official development assistance on foreign direct investment is that the recipient countries need to formulate policies that improve their economic relationships with the donor countries in order to attract greater foreign direct investment flows from the multilateral corporations located in these countries.     

The Sarbanes‐Oxley Act of 2002 and Capital‐Market Behavior: Early Evidence*

The Sarbanes‐Oxley Act of 2002 (“the Act”) was enacted in response to numerous corporate and accounting scandals. It aims to reinforce corporate accountability and professional responsibility in order to restore investor confidence in corporate America. This study examines the capital‐market reaction to the Act and finds a positive (negative) abnormal return at the time of several legislative events that increased (decreased) the likelihood of the passage of the Act. We interpret this finding as evidence supporting the notion that the Act is wealth‐increasing in the sense that its induced benefits significantly outweigh its imposed compliance costs. We also find that the market reaction is more positive for firms that are more compliant with the provisions of the Act prior to its enactment.     

The World Has Changed—Have Analytical Procedure Practices?

Analytical Procedures (APs) provide a means for auditors to evaluate the “reasonableness” of financial disclosures by comparing a client’s reported performance to expectations gained through knowledge of the client based on past experience and developments within the company and its industry. Thus, APs are fundamentally different than other audit tests in taking a broader perspective of an entity’s performance vis‐à‐vis its environment. As such, APs have been found to be a cost‐effective means to detect misstatements, and many have argued that a number of prior financial frauds would have been detected had auditors employed effective APs. With several dramatic and far‐reaching developments over the past decade, the current study examines whether and how APs have changed during this period. In particular, we focus on the impact of significant “enablers” and “drivers” of change such as technological advancements and the enactment of the Sarbanes‐Oxley Act. We also compare our findings to an influential study of the practices of APs by Hirst and Koonce (1996) that was conducted over 10 years ago. We interview 36 auditors (11 seniors, 13 managers, and 12 partners) from all of the Big 4 firms using a structured questionnaire. The data reveal some similarities in findings when compared to prior research (e.g., auditors continue to use fairly simple analytical procedures). However, there are a number of significant differences reflecting changes in AP practices. For instance, as a result of technology auditors now rely more extensively on industry and analyst data than previously. Further, auditors report that they develop more precise quantitative expectations and use more non‐financial information. They also appear to rely more on lower level audit staff to perform APs, conduct greater inquiry of non‐accounting personnel, and are willing to reduce substantive testing to a greater extent as a result of APs conducted in the planning phase. Finally, the Sarbanes‐Oxley Act has had an impact in greater consideration and knowledge of internal controls, which is seen as the most important factor driving the use and reliance on APs.     

Future Nonaudit Service Fees and Audit Quality

Prior to the Sarbanes–Oxley Act of 2002, audit partners experienced economic pressure to grow revenue from the sale of nonaudit services to their audit clients. To an auditor who is highly rewarded for revenue generation and growth, nonaudit services may represent a particularly strengthened economic bond with the client. Prior research shows that, in general, nonaudit service fees received in the current period do not impair audit quality. We examine a different setting. We propose that auditor independence can become impaired, and audit quality compromised, when clients that currently purchase relatively low amounts of nonaudit services, increase their purchases of nonaudit services from the auditor in the subsequent period. We test our prediction in the context of earnings management as a proxy for audit quality, measured by (a) performance‐adjusted discretionary accruals and (b) classification shifting of core expenses. Our results indicate that prior to the Sarbanes‐Oxley Act, rewards to the auditor in the form of future additional nonaudit service fees from current‐year high fee‐growth‐opportunity clients adversely affects audit quality. This effect is particularly strong among companies with powerful incentives to manage earnings. Our findings indicate that regulators should consider the multiperiod nature of the client–auditor relationship when contemplating policies that restrict nonaudit services, as well as the overall environment in which audit partners operate. This might include partner compensation arrangements that put pressure on audit partners to focus on increasing revenue at the expense of audit quality.     

Informal Credit,Usury, or Support? A Case Study for Vietnam

The informal credit market remains an important source of finance for the poor in Vietnam. Yet, little if anything is known about the impact of informal loans on poverty and inequality, and the Vietnamese government has no policies towards the informal credit market. In the present study paper, we found that the effect of credit from friends and relatives on per capita expenditure is positive but not statistically significant. Meanwhile, the effect of credit from private moneylenders on per capita expenditure is positive and statistically significant. Borrowing from private moneylenders increases per capita expenditure of households by around 15%. Further, it reduced the poverty incidence of borrowers by around 8.5 percentage points in 2006 and significantly decreases the poverty gap index and the poverty‐severity index. Borrowing from private moneylenders also reduces expenditure inequality, albeit at a very small magnitude.     

Spillover Effects of Internal Control Weakness Disclosures: The Role of Audit Committees and Board Connections

We find that firms are less likely to report an internal control material weakness (as mandated by the Sarbanes‐Oxley Act) in a given year if one of their audit committee members is concurrently on the board of a firm that disclosed a material weakness within the prior three years. We find a similar spillover effect for financial restatement disclosures. The spillover from material weakness disclosures is evident only if a shared director has more experience with the disclosing firm or can channel more information about the disclosed material weakness. Our findings suggest that prior director experiences outside the firm influence the work of audit committees inside the firm. One rationale is that a director's prior experience with an adverse disclosure helps diffuse important insights and serves as a catalyst for improvements in a firm's internal control and financial reporting practices. An alternative explanation, which we cannot dismiss, holds that a director's prior experience helps a firm to underreport material weaknesses and financial restatements without any attendant improvements in the underlying practices.     

Union relevance in the Malaysian labour market

The study estimates the effect of union membership on workers' wages using individual‐level data from a survey conducted among employees in various sectors in Malaysia in 2012. Initial results show that union membership has a positive effect on wages. However, after controlling for endogeneity, union membership or the presence of a labour union within a firm is not statistically significant for individual wage levels. Because there is no trade union wage premium, the study suggests that the revival of labour union membership is not going to be an easy task.