Discussion of “Are Related Party Transactions Red Flags?”

Kohlbeck and Mayhew ( 2017 ) create a new data set featuring two types of related party transactions. They use empirical‐archival methods to investigate the effect of such transactions on the likelihood of restatements and on audit fees. Their findings suggest that related party transactions related to directors, officers and major shareholders are associated with poor “tone at the top” and that this leads management to negotiate for lower‐quality audits to minimize monitoring costs. To offer avenues for future research, we focus our discussion on three aspects of their paper related to causality, definitions of variables, and generalizability to non‐U.S. jurisdictions.     

“Sent to Coventry?”

This paper reports on an employment training project undertaken in Coventry with partial funding from the European Social Fund. It involved community organisations, the community education section of the local authority and the university. The approach to training was developed in tandem with community capacity building aims. The partnership achieved a measure of trust, mutual accountability and open decision-making. The two-year project employed a part-time researcher whose role embraced active participation in project processes. There are lessons to be drawn for urban regeneration, whether strengthening local economies, attacking social exclusion or capacity building for people and their communities.     

Discussion of “Communicated Values as Informal Controls: Promoting Quality While Undermining Productivity?”

Kachelmeier, Thornock, and Williamson ( 2016 ) investigate experimentally whether an employer's value statement can affect the way employees cognitively represent how they should approach a multi‐attribute task, and therefore performance. Counter‐intuitively, but consistent with their theory, they find that the value statement negatively affects performance for piece‐rate incentivized participants. In my discussion, I elaborate on my comments from the 2013 CAR Conference. Specifically, I discuss contexts where a firm's value statement may have positive effects on performance, and the importance of conducting research investigating how the decisions made by management accountants affect learning.     

Discussion of “Were Information Intermediaries Sensitive to the Financial Statement‐Based Leading Indicators of Bank Distress Prior to the Financial Crisis?”

I discuss Desai, Rajgopal, and Yu ( 2016 ) with the goal of helping readers think carefully about which implications of the study are likely to generalize to future economic downturns and which are likely to be specific to the facts and circumstances of the recent financial crisis, given that the crisis was driven by the expectation and then the realization of a single market variable, national house price depreciation.     

Earnings Management: Do Firms Play “Follow the Leader”?

In this study we examine whether the reported performance of one firm affects the discretionary reporting behavior of another firm. We do this by identifying the leader within each industry, defined as the first large announcing firm. We find that the discretionary performance of followers (those firms announcing after the leader) relates positively to the leader's reported performance. Specifically, when the leader misses analysts’ expectations, followers report lower discretionary accruals, have fewer income‐decreasing special items, and are less likely to meet analysts’ expectations. In contrast, when leaders report good news, followers report higher discretionary accruals and are more likely to meet expectations (although we do not find evidence of a positive association between leaders’ good news and followers’ income‐decreasing special items). Overall, the results are consistent with managers of followers perceiving that earnings news of the leader will affect investors’ and others’ performance expectations for their firms.     

HOW REVOLUTIONARY IS THE “NERICA REVOLUTION”? EVIDENCE FROM UGANDA

A new high‐yielding upland rice variety known as New Rice for Africa (NERICA) has been widely recognized as a promising technology for addressing the food shortage in sub‐Saharan Africa. However, there has been no on‐farm yield data to support this optimism. The present study attempts to assess the actual and potential yield of NERICA in Uganda where it has been introduced recently. We found that NERICA's yield is higher (2.5 tons) for farmers who had rice‐growing experience than those who had no previous experience (1.7 tons). These findings strongly indicate that strengthening training, extension, and other supporting systems is the key to the success of the “NERICA revolution” in this country.     

The Political Economy of Middle‐Income Traps: Is South Africa in a Long‐Run Growth Trap? The Path to “Bounded Populism”

The current literature on middle‐income traps has been dominated by economists who have relied on economic explanations mainly around stages of development and the structural transformation of economies. But there is an equally vigorous literature from political science which speaks to the political economy of transitions. We look at the dynamics of how economic modernisation triggers structural changes with winners and losers and how this is reflected in the polarisation of the political sphere amongst middle‐income countries. This paper asks the question of whether South Africa is an archetypical example of a country stuck in a trap and how this has affected the policy choices that it has made. South Africa needs to move up the value chain with a viable value proposition, and this requires a very different policy set and human capital plan.     

EXPLORING THE IMPACT OF FOREIGN AID ON CORRUPTION: HAS THE “ANTI‐CORRUPTION MOVEMENT” BEEN EFFECTIVE?

Though many studies have referred to an “anti‐corruption movement” beginning in the 1990s by major international organizations, none has empirically tested its effectiveness on corruption. The data show that from 1997 onward, the impact of multilateral aid is strongly and robustly associated with lower corruption levels, while bilateral aid is shown to be an insignificant determinant. An increase in any official development assistance (ODA) pre‐1997 is associated with higher levels of corruption or has no impact at all. Using panel data from 1986 to 2006, this study reveals a more nuanced relationship between ODA and corruption than previous studies and demonstrates that when disaggregating the time periods, there are sensitive temporal effects of ODA's effect on corruption overlooked by earlier studies, and provides initial evidence of the effectiveness of the international organization anti‐corruption movement in the developing world.     

Does the Identity of Engagement Partners Matter? An Analysis of Audit Partner Reporting Decisions

This study examines the persistence and economic consequences of variations in reporting style across audit partners in individual engagements. Our results show that both aggressive and conservative audit reporting, measured by the pattern of prior Type 2 and Type 1 audit reporting error rates in auditor‐specific clienteles, persist over time and extend to other clients of the same partner. Analyses of abnormal accruals and persistence of client firms’ accrual estimates corroborate this finding, and hold both for private and publicly listed companies. Further, our results also show that the market penalizes client firms susceptible to aggressive audit partner reporting decisions. In particular, we find that our proxies for aggressive audit reporting are related to higher interest rates, worse credit ratings and less favorable forecasts of insolvency for private client companies, and a lower Tobin's Q for publicly listed client companies. Collectively, these results imply that audit partner aggressive or conservative reporting is a systematic audit partner attribute and not randomly distributed across engagements.     

何谓201条款

按照美国1974年201法,如果国内行业受到由于进口增多而造成的实质性损害或威胁就可以要求国际贸易委员会(ITC)实施补救性措施。ITC负责确认进口增多是否造成了损害。如果委员会得出了肯定性的结论,就会向总统推荐实施紧急性的补救措施。美国总统决定是否实施补救性措施。     

Revenge of the Black Cat--Interpretation of Allan Poe＆#39;s＆quot;Black Cat＆quot;

埃德加？爱伦？坡（1809～1849）,十九世纪美国诗人、小说家和文学评论家,同时爱伦坡也是一位恐怖小说大师。《黑猫》便是坡的代表作品之一。猫是整篇文章的线索,为什么一系列事件的发生与猫有关,到底是什么力量使男主人公最后走向毁灭。整个事件因猫而起,因猫而灭,由此作者发现故事中人物病态心理的产生,自我心灵的恐怖过程和最终走向毁灭的原因都是源于黑猫的复仇。本文通过对爱伦坡恐怖小说的背景的探索,及对原著仔细的分析,从黑猫的复仇的角度来解读《黑猫》。     

What is the Relationship Between Audit Partner Busyness and Audit Quality?

Contemporaneous studies generally find a negative relationship between audit partner busyness (APB), measured as the number of clients in an audit partner's portfolio, and audit quality. Their argument is that a busy partner does not devote sufficient time to properly audit his average client. Contrary to these studies, we argue that when busyness is optimally chosen by the partner, in equilibrium, there is no causal relationship between APB and audit quality. Using Australian data for the 1999–2010 period, we show that APB is not reliably linked to audit quality, consistent with this equilibrium theory. We argue that causality can be ascribed to the APB‐audit quality relationship when accounting scandals exogenously shocked the Australian audit market during the 2002–04 period and APB likely deviated from optimum levels. Supporting this disequilibrium view, we find that higher APB reduces a partner's propensity to issue first‐time going‐concern opinions during this period. Our evidence highlights the importance of the equilibrium condition in testing empirical associations between audit outcomes and endogenous auditor attributes, and shows that the detrimental effect of APB on audit quality is not as pervasive as contemporaneous studies suggest.     

“Un-American” or unnecessary? America’s rejection of compulsory government health insurance in the Progressive Era

Between 1915 and 1920, 18 U.S. states considered the introduction of compulsory health insurance. Progressive reformers expected state health insurance to be welfare enhancing for American wage-workers since it would result in lower cost insurance and an extension of coverage to more of the population. The evidence presented in this paper indicates that the absence of broad political support for health insurance legislation in this early period reflects that compulsory insurance would not have improved on what was available and affordable through voluntary arrangements and had the potential to reduce the welfare of wage-earners.     

我国钢铁业如何应对美国201条款

美国总统布什迫于国内钢铁工业的压力和政治需要,3月6日宣布了在今后二年对进口钢铁加征关税的计划,即从3月20日起对大部分进口钢材加征8-30%的惩罚性关税,对板坯实行进口限额,以限制钢材进口、保护国内的钢铁工业,亦即所谓的201条款的启动。这是迄今为上美国对进口钢材实施的最为严厉的限制措施,和以往出台的钢铁工业保护对策相比,这次具有被制裁国家面广、所涉产品众多、实施时间长的特点,这将对全球的钢铁产业造成严重影响.我国钢铁工业也将不可避免受到波及。