Internal audit: A comfort provider to the audit committee

This study, based upon four Belgian case studies, provides insights on (1) what drives the audit committee to look for the support of the internal audit function; and (2) what makes the internal audit function an expert at providing comfort to the audit committee [Pentland, B.T., 1993. Getting comfortable with the numbers: auditing and the micro-production of macro-order. Accounting, Organizations and Society 18 (7–8), 605–620; Carrington, T., Catasús, B., 2007. Auditing stories about discomfort: becoming comfortable with comfort theory. European Accounting Review 16 (1), 35–58]. We found that audit committees seek comfort, with respect to the control environment and internal controls, two areas in which they confront considerable discomfort. Besides the internal audit function's traditional assurance role, its involvement in improving internal controls provides a significant level of comfort to the audit committee. Internal auditors' unique knowledge about risk management and internal control, combined with appropriate inter-personal and behavioural skills, enables them to provide this comfort. Besides, their internal position, their familiarity with the company, and their position close to people across the company facilitate internal auditors being a major source of comfort for the audit committee. Formal audit reports and presentations, together with informal contacts, seem to be important symbols of comfort [Power, M., 1997. The Audit Society: Rituals of Verification. Oxford University Press, Oxford]. In addition, we found that the overall level of comfort to the audit committee can be enhanced via collaboration between internal and external auditing (the so-called ‘joint audit approach’).     

Numerical methods for Lévy processes

We survey the use and limitations of some numerical methods for pricing derivative contracts in multidimensional geometric Lévy models.      

On Kolmogorov equations for anisotropic multivariate Lévy processes

For d-dimensional exponential Lévy models, variational formulations of the Kolmogorov equations arising in asset pricing are derived. Well-posedness of these equations is verified. Particular attention is paid to pure jump, d-variate Lévy processes built from parametric, copula dependence models in their jump structure. The domains of the associated Dirichlet forms are shown to be certain anisotropic Sobolev spaces. Singularity-free representations of the Dirichlet forms are given which remain bounded for piecewise polynomial, continuous functions of finite element type. We prove that the variational problem can be localized to a bounded domain with explicit localization error bounds. Furthermore, we collect several analytical tools for further numerical analysis.     

Thoroughbred racing: Backstage at the Sport of Kings

Thoroughbred racing is a global industry that provides numerous benefits, notably income from wagering, and the demonstration of social status, which form the basis for leisure experiences for thousands of racegoers. The paper applies the theory of front and back stage to conceptualise the human and animal performances on Race Day. Data from a sample of 66 race meetings revealed that injuries were reported for racing thoroughbreds on a regular basis, at almost all of the meetings sampled including the internationally recognised Melbourne Cup. The reality for thoroughbreds on the back stage is therefore inconsistent with the impression on the front stage. The study calls for further research regarding the use of domestic animals for entertainment.     

The multiple roles of battlefield war museums: a study at Fromelles and Passchendaele

Today’s war museums are large institutions that cater to a broad range of people and provide a number of functions. In recent years, activities and displays relating to the notion of ‘edutainment’ have been incorporated into their offerings. On the Great War battlefields of Europe, the war museums tend to address specific battles that were fought in the immediate area, and traditionally they attracted visitors with a familial or national connection to the site. An on-site survey at two battlefield war museums found that remembrance remains a primary function, but overall, visitors did not support the museums as places for leisure experiences. Personal connections, both familial and national, were important, and while a broader European connection was strongly supported, it was not unique to any particular group. Peace and anti-war appeared to be seen as distinct elements. The study reinforces previous work in the field that argues personal connection provides the initial motivation for visitation.     

Capital and labor misallocation in the Netherlands

Journal of Productivity Analysis - Using firm-level panel data we analyze the misallocation of capital and labor for the Netherlands in the period 2001–2017. We use the dispersion in marginal...