An evidential reasoning approach to Sarbanes-Oxley mandated internal control risk assessment

In response to the enactment of the Sarbanes-Oxley Act 2002 and of the release of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5, this study develops a risk-based evidential reasoning approach for assessing the effectiveness of internal controls over financial reporting (ICoFR). This approach provides a structured methodology for assessing the effectiveness of ICoFR by considering relevant factors and their interrelationships. The Dempster-Shafer theory of belief functions is utilized for representing risk.First, we develop a generic ICoFR assessment model based upon a Big 4 audit firm's approach and apply it to a real-world example. Then, based on this model, we develop a quantitative representation of various levels of ICoFR effectiveness and related risk-assessment as defined by the PCAOB and contrast these representations with levels implied by Auditing Standard No. 5. In doing so, we demonstrate the potential value of formal risk assessment models in both facilitating the assessment of risks in an individual engagement and in assessing the effects of different regulations.     

Dynamic modelling of agroforestry and soil fertility interactions: implications for multi-disciplinary research policy

This paper attempts to contribute to one of the major aspects of international research agenda in agroforestry. A general framework is developed in this paper to capture the dynamic interactions of various components of agroforestry system. Using a multi-seasonal model of agroforestry, the competition among the system components in resource and input use and the trade-offs between different outputs of agroforestry system are analyzed. Policy implications for multi-disciplinary research are derived. It is argued that quantifying the potential benefits of agroforestry system requires reformulation of existing economic methods of analyzing agroforestry technology to contribute to the fuller understanding of the dynamic interactions among its various components.     

A comparison of the technical efficiencies of health districts and hospitals in Botswana

An attempt is made here to construct and present relative efficiency indices for the services rendered by health districts and specific hospitals in Botswana, using Stochastic Frontier Regression analysis and Data Envelopment Analysis. The analysis indicated that three districts - Kweneng East, Kgalagadi and Boteti - have efficiency scores below the optimum level. Among the 13 hospitals considered, Tsabong Primary Hospital was found to have an efficiency score of less than one. Since the health services involve a number of factors, these indices ought to serve as indicators for further scrutiny of those units (health districts and hospitals) that fall below the optimum efficiency level. The data used for the analysis are from the published material by the Central Statistics Office, Botswana for the year 1997. Health is considered one of the major concerns of the government of Botswana. As a consequence, the authors feel that this study will be useful to policy makers and health planners in giving them some kind of relative ranking among health districts and hospitals.     

Properties of shrinkage estimators in linear regression when disturbances are not normal

This paper considers a class of recently developed biased estimators of regression coefficients and studies its sampling properties when the disturbances are not normally distributed. It has been found that the conditions of dominance of these estimators over the least squares estimator, under non-normality, are quite different than their well-known dominance conditions under normality. Some implications of the results are also discussed.     

Macroeconomic policy and output comovement: The formal and informal sectors in India

Is the informal sector different from the formal sector? We present an aggregative analysis of the formal and informal sectors in India to investigate the extent to which the two can be viewed as broadly homogeneous. Using a macroeconometric framework, the paper analyzes over past three decades the behavior of the two sectors with respect to each other and several government-related policy variables. It is found that the formal and informal sectors display markedly different attributes in terms of their relationship to policy variables. Furthermore, the informal sector appears to be decoupled from the rest of the economy.     

Multiple hypothesis evaluation in auditing

In many audit tasks, auditors evaluate multiple hypotheses to diagnose the situation. Research suggests this is a complex task that individuals have difficulty performing. Further, there is little guidance in professional standards or literature dealing with the many complexities present in the audit environment. Using probability theory, this study derives the appropriate revision of likelihoods for multiple hypotheses given different realistic audit conditions. The analysis shows that the relationships among the hypotheses dramatically impact the use of audit evidence and the resulting pattern of probability revisions. We also identify testable hypotheses to guide future research and discuss practice implications regarding ways to improve the effectiveness of analytical procedures.     

Announcement

In this paper we obtain a small-disturbance approximation to the moment matrix of the limiting distribution of an operational generalized least squares (OGLS) estimator of the mean response vector in a random coefficient model.It is shown that for small samples the moment matrix of the limiting distribution underestimates the small-disturbance approximate moment matrix of the limiting distribution of the OGLS estimator. This suggests that for small samples the ‘standard errors’ of the OGLS estimates should be obtained from the small-disturbance approximate moment matrix of the limiting distribution rather than from the conventional asymptotic moment matrix.     

Some properties of the distribution of an operational ridge estimator

Metrika - The present paper investigates the properties of the sampling distribution of an operational general ridge estimator. Exact expression are given for the moments and their approximations...     

Understanding corporate B2B web sites' effectiveness from North American and European perspective

The globalization of economic activities has led multinational business-to-business (B2B) firms to use their corporate web sites extensively to communicate with their stakeholders. Using a field study of 368 business customers, this paper examines three factors of information that influence corporate web sites' effectiveness in a B2B context and whether these factors differ by web site user's national origin. Results indicate that informativeness of a corporate web site is important for both North American and European visitors. Quality of information is important for European users but not an important aspect for North American users. Usability is the most important factor for North American users but it is not important for European users. Implications of these results are discussed for managerial practices and further research.     

Participation of working women in decision‐making process as consumer

In a world where the role of women in decision‐making is seldom adequately appreciated, they make a remarkable contribution due to their hard work and sense of confidence. It is observed that women are mostly involved in repetitive and monotonous household work irrespective of the fact that they share most of family responsibilities and perform a wide range of duties in and outside home. On the other hand men perform activities, which require skills, but there is sufficient evidence, which show a clear, although slow shift of stereotype sex roles. In early societies, decision‐making was predominantly done by menfolk being the breadwinner of the family. With modernization and education women have been empowered to make the best use of human and non‐human resources in management of the family with respect to efficient use of time and energy. So, a study was undertaken to know how far the working women of Faridkot district participate in the decision‐making process with the following objectives:

• (a) to find out the level of participation of working women in the decision‐making process as consumer.
• (b) to find out the level of difficulty among working women at different steps of the decision‐making process.

The present investigation pertaining to Faridkot district of Punjab state of India was exploratory in nature. A sample of 100 working women was selected by simple random sampling procedure. The responses were recorded through a well structured and pretested questionnaire including an index developed to measure level of participation and difficulty as realized by working women in the decision‐making process. After collecting the data, it was analysed by employing simple statistical tests like frequency percentages The important findings emanated out of the present investigation are as follows:

• ? Most of the respondents were middle aged, educated up to graduation level, having nuclear family, small size of family with monthly income more than Rs.5000.00. It was also observed that majority of the respondents were in the teaching and medical professions.
• ? Working women were found to be involved more in the case of food items (79.0–93.0%) as compared to non‐food items (6.0–46.0%) with an exception of their major participation (78.0%) at the stage of identifying the problem in case of non‐food items.
• ? The study revealed that the time consumed at various steps of consumer decision‐making process is minimum for most of the steps in case of food items but moderate to maximum in case of non‐food items. But for analysing the alternatives the time consumed was moderate to maximum for both the categories.
• ? Findings also revealed that difficulty level was from moderate to high (32.0–98.0%) in most of the steps in case of food items whereas, in case of non‐food items it was from low to high (11.0–78.0%)