Debt contract strictness and auditor specialization

The conflicts of interest among managers, shareholders and creditors resulting in agency costs, can be mitigated by restricting managers’ adverse behavior, through financial covenants to better align the various stakeholder interests. Thus, debt contract strictness represents an important aspect of agency costs between creditors, shareholders, and management that is not always captured by interest rates. The contract setting provides a unique opportunity to investigate how creditors may rely on auditors to alleviate information uncertainty stemming from reliance on management's financial reporting and thus alleviate the creditor's potential loss of invested capital. After controlling for borrower risks, loan characteristics, and audit factors, we show that auditor industry specialization is significantly associated with a reduction in the strictness of debt contracts, consistent with creditors viewing certain industry expert auditors as effective monitors against financial reporting manipulation aimed at the avoidance of debt covenant triggers that protect creditors against potential loss. Further, we find that the association between loan strictness and auditor specialization is attenuated by stronger corporate governance systems, external monitors, and prior lender relationships.     

Why do auditors fail? What might work? What won’t?†

Auditing failures and scandals have become commonplace. In response, reformers (including the Kingman Review in the U.K. and a recent report of the U.K.’s Competition and Market Authority) have proposed a variety of remedies, including prophylactic bans on auditors providing consulting services to their clients in the belief that this will minimize the conflicts of interest that produce auditing failures. Although useful, such reforms are already in place to a considerable degree and may have reached the point of diminishing returns. Moreover, this strategy does not address the deeper problem that clients (or their managements) may not want aggressive auditing, but rather prefer a deferential and perfunctory audit. If so, auditors will realize that they are marketing a ‘commodity’ service and cannot successfully compete based on their quality of services. Rationally, they would respond to such a market by seeking to adopt a cost-minimization strategy, competing by reducing the cost of their services and not investing in new technology or higher-priced personnel.

What could change this pattern? Gatekeepers, including auditors, serve investors, but are hired by corporate management. To induce gatekeepers to better serve investors, one needs to reduce the ‘agency costs’ surrounding this relationship by making gatekeepers more accountable to investors. This might be accomplished through litigation (as happens to some degree in the U.S.), but the U.K. and Europe have rules that discourage collective litigation. Thus, a more feasible approach would be to give investors greater ability to select and remove the auditor. This paper proposes a two part strategy to this end: (1) public ‘grading’ of the auditor by the audit regulator in an easily comparable fashion (and with a mandatory grading curve), and (2) enabling a minority of the shareholders (hypothetically, 10%) to propose a replacement auditor for a shareholder vote. It further argues that both activist shareholders and diversified shareholders might support such a strategy and undertake it under different circumstances. Absent such a focus on agency costs, however, reformers are likely only re-arranging the deck chairs on the Titanic.     

Auditors' Responses to Workload Imbalance and the Impact on Audit Quality*

Using detailed data for fieldwork hours and audit hours by rank from audit engagements in Korea, we examine whether audits conducted under workload imbalance, proxied by busy‐season audits, impair audit quality, and how auditors adjust staff assignments for busy‐season audits. We generally find that busy‐season audits are associated with lower audit quality, and that audit firms reduce the involvement of senior auditors during busy‐season audits. In addition, the greater the involvement of senior auditors and junior auditors, the lesser the deterioration in audit quality. Finally, although there is no increase in interim audits in response to workload imbalance during busy seasons, increasing interim audits can mitigate the negative impact of busy‐season audits on audit quality. Our results are relevant to auditors and regulators, who have expressed concerns about the adverse effects of workload imbalance on audit quality.     

利用Cisco Packet Tracer6.0模拟软件实现交换机VLAN的配置

本文简要介绍了职业院校对非计算机相关专业学生对《计算机网络及应用》实训课程的要求,以交换机VLAN的配置为例,介绍了VLAN的概念和交换机,同时阐述了操作平台Cisco Packet Tracer6.0。     

Low-fare flights across the Atlantic: Impact of low-cost,long-haul trans-Atlantic flights on passenger choice of Carrier

The purpose of this paper is to gain insights into low-cost, long-haul (LCLH) and full-service carrier (FSC) passenger preferences in the trans-Atlantic market. A total of 1412 economy and premium economy passengers were surveyed at Los Angeles and Seattle-Tacoma International Airports. The underlying factors comprised of passenger travel attributes were: Operations, Comfort, Onboarding, Service, and Flight Schedule, along with a variable, Airfare. Satisfaction with Airfare (#1 priority) and Comfort (#2 priority) impacted choice of LCLH carrier, whereas satisfaction with Service (#3 priority) and Flight Schedule (#4 priority) impacted choice of FSC. Both carrier types have a place in the trans-Atlantic market, although passenger loyalty was stronger for an all-inclusive FSC offering (76%) than a no frills LCLH offering (55%).     

审计师行业专长对审计重要性水平的影响——基于股权性质的调节作用研究

审计师行业专长意味着在特定领域较强的专业胜任能力,对于防范审计风险和提高审计质量都有显著影响。围绕审计师行业专长影响审计重要性水平这一主题，结合股权性质的调节作用，选取2016—2018年沪深两市A股上市公司作为研究对象，进行实证检验。结果表明，审计师行业专长对重要性水平有正向影响，如果被审计单位是国有控股上市公司，审计师行业专长与重要性水平的正相关关系更显著。这对审计机构人力资源配置、监管部门完善相关制度及监督工作具有参考价值。     

财务重述与审计师变更——来自中国上市公司的经验证据

本文以2003--2011年我国主板上市公司为样本，从市场声誉和信号传递的角度，对上市公司财务重述与审计师变更问题予以分析和解答。本文研究结果显示，相比于非财务重述公司而言，财务重述公司更可能变更审计师，且变更概率与重述的严重程度显著正相关，此外，就变更审计师的公司而言，财务重述公司比非重述公司更可能从小所变更为大所或在平级所之间进行变更。在此研究基础上，本文提出相应的政策建议。     

浅谈冶金起重机超速保护装置的检验

近几年来冶金起重机事故频发,特种设备监督检验机构对冶金起重机的检验显得尤为重要,本文针对其中的重要项——超速保护装置的检验方法进行了新的开拓。     

Firms’ performance following the initial resignation of independent directors: evidence from Taiwan

This study investigates the operating performance of firms listed on the Taiwan stock exchange following the initial resignation of independent directors. The results show that the firms’ operating performance following the resignation of these directors has not only deteriorated, but is also significantly below the industry average. In addition, firms with a relatively severe agency problem, including firms that have lower insider or institutional shareholdings, receive audit opinions other than unqualified opinions or change their auditors prior to the resignation of the independent directors, tend to perform more poorly following the resignation.     

浅谈家庭用开关、插头插座质量问题

我国很多的火灾事故都是由于开关与插头插座质量不过关引起,导致家庭用开关与插头插座出现质量问题的因素包括两个方面,第一是由于生产开关与插头插座的科技含量不高,第二是用户的因素。本文主要分析家庭用开关、插头插座的常见质量问题。