The Determinants of External Audit Costs in the New Zealand Life Insurance Industry

The contracting theory literature suggests that auditors' pricing decisions reflect the efficacy of contracting arrangements in firms. Drawing a framework from this literature, we test empirically the simultaneous effect of six firm-specific variables on external audit costs using 1988–1993 data drawn from New Zealand's (NZ) life insurance industry. These variables are: assets-in-place, reinsurance, internal governance, firm size, product-mix and organizational form. Consistent with expectations, our results indicate that audit fees are influenced by product-mix and firm size. However, the other variables are found not to be statistically significant. The empirical results thus provide mixed support for contracting theory.     

Product attributes and consumer acceptance of nutritionally enhanced genetically modified foods

Using data from a national survey, this study analyses US consumers’ acceptance of genetically modified foods that provide additional nutritional benefits. Using an ordered probit model, this study examines the relation between the willingness to consume genetically modified foods and consumers’ economic, demographic and value attributes. Empirical results suggest that despite having some reservations, especially about the use of biotechnology in animals, American consumers are not decidedly opposed to food biotechnology. Consumers’ economic and demographic variables are only weakly related to their acceptance of food biotechnology, especially when technology involves plant‐to‐plant DNA transfer. However, public trust and confidence in various private and public institutions are significantly related to their acceptance of food biotechnology. Overall, consumer acceptance of bioengineered foods is driven primarily by public perceptions of risks, benefits and safety of these food products.     

Does late 10K filing impact companies’ financial reporting strategy? Evidence from discretionary accruals and real transaction management

The study investigates how late 10K filers adapt their financial reporting strategy in the post‐late filing period in their response to bad publicity, negative market sentiment, and higher stakeholders’ scrutiny resulting from reporting delays. Both the level and change regressions show that late 10K filers significantly reduce the use of discretionary accruals from pre‐ to post‐late filing year. However, they simultaneously increase real transaction management over the same time period. The trade‐offs between the two earnings management techniques are more prominent when the late filers have a strong incentive to meet or beat earnings benchmarks. Our primary results are robust when late filings are caused by accounting, auditing, and internal control issues, and when the late filers cited no meaningful reason for late 10K filings. It is further evident that late filers with material internal control weaknesses and late filers that subsequently restate their financial statements make relatively higher trade‐offs than the matched non‐late filers. Finally, the trade‐offs between reduced accruals and increased real transaction management are stronger for the accelerated filers, and for the late filers audited by Big 4 auditors.     

Did the regulatory changes of 1999 and 2001 affect income smoothing behavior of US banks?

This study examines the impact of the regulatory changes introduced by the Federal Financial Institutions Examination Council (FFIEC) in 1999 and by the Securities and Exchange Commission and FFIEC in 2001 on the income smoothing approaches and mechanisms employed by the United States (US) banking industry. We find that the relationship between previous quarter charge-offs and current quarter recoveries that was prevalent in the 1990’s to be insignificant for homogeneous loans but for heterogeneous loans the relationship became significant in the years following the regulatory changes. Recoveries are positively and significantly associated with the surprise net interest margin or return on assets which implies recoveries are primarily determined by the economic realities of the charged-off loans. The regulatory changes have strengthened the relationship between current quarter recoveries from heterogeneous loans and current quarter charge-offs but for homogeneous loans this relationship weakened insignificantly. The new regulations reduced the surprise gross loan charge-offs suggesting that the enforcement improved the accuracy of the provision as a predictor of next quarter’s gross loan charge-offs.

     

Factors influencing individual in adopting eWallet

This research examines individuals’ feasibility of adopting digital wallet also known as ‘eWallet.’ It aims at assessing the technological readiness among customers especially youth by measuring the acceptance level of digital wallet adoption in a massive implementation of the digital economy. Adoption of eWallet can potentially enhance the efficiency of financial institutions and the provision of new services for the convenience of the customers. The nature of this study was developed in the context of South East Asia focusing on Brunei Darussalam. The study using a framework for assessment based on the unified theory of acceptance and use of technology model revealed that the main construct of the model to be predictors of behavioral intention, was attitude towards using technology and anxiety. These results might be as a result of the millennial generation being in constant interaction with various types of technology, paired with the rising Internet connectivity leading to the minimal impact of the digital wallet adoption.

     

Measuring consumer understanding and perception of eco‐labelling: Item selection and scale validation

The use of “eco‐labels” by businesses, both as communication and positioning strategies, is increasing. For these eco‐labels to be effective, however, it requires consumers to understand and value what eco‐labels are communicating. Research suggests that there are many factors impeding consumers’ understanding of eco‐labels . Most of these studies have focused on single dimensions of a complex phenomenon and in doing so they have ignored the multifaceted aspects of the construct, suggesting that a more integrated representation is warranted. The work herein undertakes four studies to empirically test and validate a multidimensional measure that can be used to assess how consumers psychometrically understand and perceive eco‐labelling. The four‐study process involves qualitative interviews to extend the issues identified within the literature, followed by two studies using principal component analysis, confirmatory factor analysis and structural equation modelling analysis, each using separate samples, to test the reliability and validity of the proposed eight‐dimensional 27‐item ECOLSCALE. Another study is then undertaken to assess the nomological validity of the scale regarding to consumers’ environmental orientation. The ECOLSCALE developed in this work can be used to assist marketers, policy makers and researchers to evaluate the impact of eco‐labelling schemes on consumers’ understanding of eco‐labels, thereby enabling consumers to make more environmentally informed decisions.     

Data mining in road crash analysis: the context of developing countries

The recent advancements in the field of data mining have made vast progress in extracting new information and hidden patterns from large datasets which are often overlooked by the traditional statistical approaches. These methods focus on searching for new and interesting hypothesis which were previously unobserved. Road safety researchers working with the crash data from developed world have seen encouraging success in obtaining new insight into crash mechanism through data mining. An attempt was made in this study to apply these advance methods and evaluate their performance in manifesting crash causes for Bangladesh. The study applies hierarchical clustering to identify hazardous clusters, random forest to find important variables explaining each of these clusters, and classification and regression trees to unveil their respective crash mechanisms for the road crash data of Bangladesh. The results identified several new interesting relationships and acknowledged issues related to quality of data.     

Should Bangladesh Export to Countries with Better Institutional or Comparatively Similar Institutional Form?

Using panel data for the years 2006–2015, this study empirically investigates the effect of rule of law as an institution on Bangladesh's exports to 28 European Union countries (EU28) based on gravity model analysis. Two-step econometric results suggest that institutional rule of law is strongly associated with Bangladesh's exports, and institutional quality provides evidence of this significant effect. Furthermore, exports of Bangladesh are driven by economic size, market size, and the real exchange rate as well as rule of law. These results are suggestive of an important joint role for both trade and institutions in the long run.