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.     

Factors Determining the Development of Non-cash Payments in Rural Areas in Poland

This article aims at characterization and assessment of the financial behaviors of rural dwellers on non-cash payment markets and identification of factors determining the intensity of using individual methods of payment by the inhabitants of rural areas. The main source of data used for analysis and inference was information originating from the authors＇ own investigations conducted in 2013 on a group of 500 rural households and on a group of 150 trade and service points operating in non-urbanized areas. This work made use of statistical summary measures and Z2 independence test. According to the results of the conducted studies, forms of payment used by rural dwellers depend on many variables, of demographic, economic, and psychological character. Cash payments are more frequently used by persons possessing vocational or secondary education, elderly people, old-age pensioners, annuitants, or households with lower incomes. Also, persons who do not trust financial institutions or do not perceive benefits resulting from the use of non-cash instruments prefer cash. It is a group of households which require urgent educational activities in the area of non-cash payment instruments. A significant barrier to using non-cash payment instruments by rural dwellers was a limited access to non-cash channels. It is connected in the first place with a poorer development of financial infrastructure in rural areas （banks or cash points）, insufficient Internet access conditioning a possibility to use electronic banking points, and also a worse development of credit card acceptance network. As has been demonstrated by the results of conducted studies, the main reason for a lack of point of sale （POS） terminals in retail and service-providing points operating in rural areas, in the opinion of their owners, is the very high interchange fee （50% indications）, which under Polish conditions is one of the highest in the European Union （EU）.     

Futures: A question of values-consciousness-choices

How important is the quality of values, worldviews, consciousness and choices in the theory and praxis of futures studies and the creation of possible futures? This paper is based on an unpublished Ph.D. Thesis (that is now accessible on the ADT database on the internet), a case study about the evolution of values, consciousness and choices in 12 Australian women's lives. It contains a summary of the impact of the Women's Liberation Movement on these women's values and consciousness, their current values and consciousness, as well as some of their hopes and concerns for the future. Many of the value priorities these women share stand in remarkable contrast to mainstream patriarchal ethics. These women's values also find themselves in uneasy relation to patriarchal worldviews, future visions and futures studies and in important ways surpass them. Based on my research, I propose questions and suggestions in regards to futures studies.     

Market imperfections,opportunity and sustainable entrepreneurship

This research develops the argument that four types of market imperfections (i.e., inefficient firms, externalities, flawed pricing mechanisms and information asymmetries) at once contribute to environmental degradation and that they also provide significant opportunities for the creation of radical technologies and innovative business models. We show that these opportunities establish the foundations for an emerging model of sustainable entrepreneurship, one which enables founders to obtain entrepreneurial rents while simultaneously improving local and global social and environmental conditions. To advance this new field, we offer suggestions for a research agenda focusing on two areas: the relationship between market imperfections and entrepreneurial opportunities, and the emerging field of sustainable entrepreneurship.     

Costs of hospital visits among patients with deep vein thrombosis treated with rivaroxaban and LMWH/warfarin

Background:

For many years, the standard of care for patients diagnosed with deep vein thrombosis (DVT) has been low-molecular-weight heparin (LMWH) bridging to an oral Vitamin-K antagonist (VKA). The availability of new non-VKA oral anticoagulants (NOAC) agents as monotherapy may reduce the likelihood of hospitalization for DVT patients.

Objective:

To compare hospital visit costs of DVT patients treated with rivaroxaban and LMWH/warfarin.

Methods:

A retrospective claim analysis was conducted using the MarketScan Hospital Drug Database for care provided between January 2011 and December 2013. Adult patients using rivaroxaban or LMWH/warfarin with a primary diagnosis of DVT during the first day of a hospital visit were identified (i.e., index hospital visit). Based on propensity-score methods, historical LMWH/warfarin patients (i.e., patients who received LMWH/warfarin before the approval of rivaroxaban) were matched 4:1 to rivaroxaban patients. The hospital-visit cost difference between these groups was evaluated for the index hospital visit, as well as for total hospital-visit costs (i.e., including index and subsequent hospital visit costs).

Results:

All rivaroxaban users (n?=?134) in the database were well-matched with four LMWH/warfarin users (n?=?536). The mean hospital-visit costs were $5257 for the rivaroxaban cohort and $6764 in the matched-cohort of patients using LMWH/warfarin. The $1508 cost difference was statistically significant between cohorts (95% CI?=?[?$2296; ?$580]; p-value?=?0.002). Total hospital-visit costs were lower for rivaroxaban compared to LMWH/warfarin users within 1, 2, 3, and 6 months after index visit (significantly lower within 1 and 3 months, p-values <0.05)

Limitations:

Limitations were inherent to administrative-claims data, completeness of baseline characteristics, adjustments restricted to observational factors, and lastly the sample size of the rivaroxaban cohort.

Conclusion:

The availability of rivaroxaban significantly reduced the costs of hospital visits in patients with DVT treated with rivaroxaban compared to LMWH/warfarin.     

Enhancing ecosystem services in vineyards: using cover crops to decrease botrytis bunch rot severity

Botrytis bunch rot is a disease that causes loss of yield and quality in many fruit and vegetable crops in temperate climates worldwide. The rot is caused by the fungus Botrytis cinerea, a saprophytic necrotroph. In grapes, the presence of the fungus can reduce yield, taint wine and increase its sensitivity to oxidation. In the current work, inter-row phacelia and ryegrass were mulched in situ in winter 2005 and compared with a bare ground control. The mulches were applied under 10-year-old Chardonnay vines in a 10-replicate randomized block design in New Zealand. Functional soil biological activity increased by 1.5–4.5 times in the two cover crop treatments compared with the control, an effect related to elevated soil moisture in these treatments. This increase in soil moisture and a higher rate of soil biological activity increased vine debris degradation, reduced B. cinerea primary inoculum on the debris and decreased B. cinerea severity at flowering (December 2005) and harvest (April 2006). These results show the potential of mulched cover crops to enhance soil ecosystem services, reduce variable costs and improve the sustainability of viticulture and potentially other agricultural systems, in temperate climates worldwide.     

Housing,consumption and asset pricing

This paper considers a consumption-based asset pricing model where housing is explicitly modeled both as an asset and as a consumption good. Nonseparable preferences describe households’ concern with composition risk, that is, fluctuations in the relative share of housing in their consumption basket. Since the housing share moves slowly, a concern with composition risk induces low frequency movements in stock prices that are not driven by news about cash flow. Moreover, the model predicts that the housing share can be used to forecast excess returns on stocks. We document that this indeed true in the data. The presence of composition risk also implies that the riskless rate is low which further helps the model improve on the standard CCAPM.     

Comparison of consumer reactions to price-matching guarantees in internet and bricks-and-mortar retail environments

The present study investigates consumer responses to price-matching guarantees (PMGs) in the Internet environment and contrasts them with their responses in a traditional bricks-and-mortar retail environment. The effect of store reputation on consumer responses to price-matching policies is also investigated in both Internet and bricks-and-mortar retail settings. Two studies using a 2 × 2 × 2 between-subjects full factorial experimental design with two levels of PMG presence (PMG present, PMG absent), two levels of retail environment (Internet, bricks-and-mortar), and two levels of store reputation (no/low reputation, high reputation) were conducted. In study 1 reputation was manipulated using store names, while in study 2 the reputation was manipulated using store characteristics. The findings of two studies suggest that consumer reactions to price-matching guarantees, such as store price perceptions, postpurchase search intentions, and willingness to claim a refund if a lower competitive price is found, differ across the two purchase environments.     

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