AN EMPIRICAL INVESTIGATION OF THE AUDIT EXPECTATION GAP: AUSTRALIAN EVIDENCE

This paper examines the existence and nature of the expectation gap in Australia and whether recent changes to the wording of audit reports have affected that gap. A mail questionnaire was completed by auditors, accountants, directors, creditors, shareholders and undergraduate students. There was a gap between auditors and the various user groups under the old report wording prior to the issuance of the revised AUP 3. The modified wording in the revised AUP 3 had a significant impact on beliefs about the nature of an audit and the relative responsibilities of auditors and management. The modified wording eliminated some of the differences, but also created some new differences in beliefs about the messages communicated through audit reports. The auditing profession's fears about an expectation gap appear to be justified.     

AUDITOR OBJECTIVITY: THE EFFECT OF PRIOR INVOLVEMENT IN AUDIT PROGRAMME DESIGN

This study tests whether the involvement of independent auditors in the design of an audit programme affects their subsequent audit work relating to that audit area. Two groups of subjects played roles in designing partial audit programmes for a particular account. They also evaluated partial audit programmes for another account designed by someone else. A third group merely evaluated partial audit programmes for both accounts. All subjects were informed that both audit programmes were implemented and of potential problems that could be attributed to either of the two accounts. Subjects were asked to allocate 15 hours to investigate either or both of the accounts in question. Our hypothesis was that auditors who had a role in designing a partial audit programme would allocate less audit effort to that account than auditors who had no role in the programme design. Comparisons of the hours allocated provided some support for this hypothesis.     

THE EVOLUTION OF THE DISTRICT AUDIT

This paper examines the origins and development of the local authority audit from medieval times to 1933, and briefly reviews later developments. It gives particular attention to the role of the district audit which, as an independent mechanism operating within a centrally established administrative framework, gradually accumulated responsibility for monitoring most aspects of local authority expenditure, which grew from relatively modest amounts to about £5m by the beginning of the nineteenth century and £535m in 1933, which is roughly equivalent to £19.5b in 1990 prices. The paper shows that the government's present objective of greater central control has been a consistent theme over time.     

THE IMPACT OF HEALTH AND NUTRITION ON EDUCATION

Child health and nutrition are strongly associated with educationalachievement. But associations do not necessarily indicate causality;estimates generally are likely to be biased in one directionor the other. As a result analysts and policymakers should havemuch less confidence in findings about the effect of healthon schooling success than has been claimed in previous surveys.The evidence is more nuanced and qualified than is often recognizedbut may still support the conclusion that health may have considerableeffects on postschooling productivity. Policy implications pointtoward providing public subsidies for the collection, analysis,and dissemination of information about the links between healthand education; and toward providing services to improve thehealth of poor children.      

THE EFFECT OF THE DISTRIBUTION OF CASES ON JUDGMENTAL CONSENSUS

This paper examines the effect of the distribution of cases on the level of consensus of auditor judgments by the use of a simulation study. The results show that the level of consensus is higher on extreme cases and that overall levels of consensus are affected by the distribution of cases included in a study. Some additional insights into previous research are made and some suggestions for the design of future studies are outlined.     

THE EFFECT OF THE SEC'S ORDER-HANDLING RULES ON NASDAQ

We study the effect of the implementation of new Securities and Exchange Commission order-handling rules—the Limit Order Display Rule, the Quote Rule, and the Actual Size Rule—on NASDAQ's quoting and trading behavior. We find that the number of reported quotes increases and the bid-ask spread decreases following the implementation of the new rules. The decreased quoted depth associated with placement of individual investors' limit orders—the Limit Order Display Rule—outweighs the increased quoted depth associated with displaying institutional quotes—the Quote Rule. Further, the number of trade executions increases while the average trade size decreases. The volatility of trade-to-trade and midpoint returns decreases for the initial group of stocks subject to the rules, but not for the two subsequent groups.     

计划审计工作

The concept of adequate planning in-cludes investigating a prospective clientbefore deciding whether to accept theengagement,obtaining an understanding ofthe client's business operations,and devel-oping an overall strategy to organize,coordinate,and schedule the activities ofthe audit staff.充分计划是指在决定是否接受业务委托之前对未来客户进行调查,了解客户的业务经营情况,以及制定一个总体审计策略来组织、协调和安排审计人员的工作。1.Obtaining clientsPublic accounting is a competitiveprofession,and …     

THE EFFECT OF SELF-TENDER OFFERS ON EARNINGS EXPECTATIONS

We examine financial analysts' earnings revisions after self-tender offers. Consistent with the assertions of earlier studies that self-tender offers signal future performance, financial analysts significantly increase their forecasts of earnings for firms that announce self-tender offers. However, the revisions differ based on the method chosen to repurchase shares. For Dutch auction offers, analysts significantly revise their estimates of short-term earnings only. For fixed-price tender offers, analysts increase both short-term and long-term earnings estimates. Also, long-term earnings revisions are significantly related to announcement-period abnormal returns for fixed-price tender offers, which suggests that fixed-price self-tender offers convey more positive information about future earnings than do Dutch auction offers.     

THE EFFECT OF PAYMENT DELAYS ON STOCK PRICES

In this paper stock returns are modeled as a function of payment delays. Three hypotheses are tested: (1) that buyers compensate sellers for a six-business-day payment delay; (2) that the rate of compensation is the riskless rate; and (3) that this delay is solely responsible for day-of-the-week effects. Results support the first and second hypotheses, but not the third. The coefficient on the variable that controls for payment delays is correctly signed and statistically significant. It is the correct size in all periods but one. However, the estimated rate of compensation probably differs across days of the week. Finally, controlling for a six-business-day payment delay fails to eliminate the weekly pricing pattern.     

THE EFFECT OF TAX PREFERENCES ON HEALTH SPENDING

In this paper, we estimate the effect of the tax preference for health insurance on health care spending using data from the Medical Expenditure Panel Surveys from 1996-2005. We use the fact that Social Security taxes are only levied on earnings below a statutory threshold to identify the impact of the tax preference. Because employer-sponsored health insurance premiums are excluded from Social Security payroll taxes, workers who earn just below the Social Security tax threshold receive a larger tax preference for health insurance than workers who earn just above it. We find a significant effect of the tax preference, consistent with previous research.