The audit expectation gap： A review of the contributing factors

The audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectations from the public, the lower is the credibility, earning potential and prestige associated with the work of auditors. The aim of this paper is to uncover the causes of an audit expectation gap. It is revealed that the existence of an audit expectation gap is due to complicated nature of an audit function; conflicting role of auditors; retrospective evaluation of auditors＇ performance; time lag in responding to changing expectation; and self-regulation process of the auditing profession.     

WHY ARE AMERICANS ADDICTED TO BASEBALL? AN EMPIRICAL ANALYSIS OF FANDOM IN KOREA AND THE UNITED STATES

Theories of rational addiction posit that certain habit-forming goods—characterized by an increasing marginal utility of consumption—generate predictable dynamic patterns of consumer behavior. It has been suggested that attendance at sporting events represents an example of such a good, as evidenced by the pricing strategies of commercial sports interests. In this essay, we provide new evidence in support of rational addiction for the case of Major League Baseball but fail to find such support in data from the Korean Professional Baseball League. We then review the scientific literature on sports fans from the perspective of human behavioral ecology and propose a theory of endogenous habit formation among sports fans that could explain our findings . ( JEL C32, D83, D87, D91, L83)     

A Model of Monetary Policy Shocks for Financial Crises and Normal Conditions

Deteriorating economic conditions in late 2008 led the Federal Reserve to lower the target federal funds rate to near zero, inject liquidity through novel facilities, and engage in large‐scale asset purchases. The combination of conventional and unconventional policy measures prevents using the effective federal funds rate to assess the effects of monetary policy beyond 2008. We employ a broad monetary aggregate to elicit the effects of monetary policy shocks both before and after 2008. Our estimates align well with major changes in the Fed's asset purchase programs and yield responses that are free from price, output, and liquidity puzzles that plague other approaches.     

Development of a conceptual model to understand international social entrepreneurship and its application in the Ugandan context

While the concept of social entrepreneurship is relatively new, initiatives that employ entrepreneurial capacities to solve social problems have existed throughout history. In this paper, the factors explaining international social entrepreneurial behavior are investigated. The key argument is that behavioral potential, which is at the cognitive level, is influenced by an individual's perceptions toward social enterprise venturing. These perceptions could be related to feasibility, desirability, or propensity to act, among others. Personal, sociological, and environmental variables are linked to decision making through these perceptions. This research is based on literature review and case studies. The analysis indicates that individuals' perceptions or attitudes can explain aspects of their international social entrepreneurial potential. Areas for future research are discussed.     

The Ties Made in the Harvest: Nicaraguan Farm‐worker Networks in Costa Rica's Agricultural Exports

Traditional and nontraditional export agriculture expansion dramatically changed the social and economic landscapes in the global south. An examination of one aspect of south–south international migration, Nicaraguan migrant economic integration into Costa Rica's export agriculture sector, reveals how production systems in the traditional and nontraditional agricultural sectors shape migrant social networks in distinct ways in the global south and its significance for both migrant workers and the agricultural sectors they work in. The rapid expansion of nontraditional export agriculture – the essence of agricultural development in Costa Rica – depends on the traditional crop production structure of coffee farms. The experiences of Nicaraguan migrant workers and their social ties to each other in nontraditional export agriculture and the coffee farms in Costa Rica demonstrate how different production structures call for distinct fragile and conflicted social networks ties between migrants. The economic integration of migrant workers relies on opportunistic and weak ties that are both gendered and contradictory.     

Heterogeneous Popularity and Exporting Uncertainty

Empirical work shows that a considerable fraction of firms quit the export market soon after entrance. A natural interpretation to this quick exit from the export market is that firms did not predict the profitability of their variety correctly before entry. In this paper a firm heterogeneity model is put forward to account for this type of exporting uncertainty due to lack of information. Firms are heterogeneous with respect to the popularity of their good, technically the CES weight, and the popularity of a good varies across markets. Therefore, firms are uncertain about the profitability of their good in the export market. Upon payment of sunk export costs the popularity of the good is revealed and some firms stay in the export market while others leave. Comparative statics show that lower sunk export costs lead to higher probability that firms start to export, but to lower probability of export success. Lower fixed export costs instead lead to both a higher probability to start exporting and to be successful in exporting.     

卫生技术评估与循证医学：我们研究的是什么？

本期《健康价值》（《Value in Health》特刊刊载了五个国家技术评估（Technology Assessment，TA）方面的文章，主要介绍了这些国家技术评估的范围，如何制定相关决策以及技术评估手段如何支持这些决策。每篇文章的着眼点各不相同。这些文章将有助于读者更好地了解这些国家的决策制定过程和技术评估方法。若将这些文章综合参考的话，则可以获得更大的启示。     

The Difference between Earnings and Operating Cash Flow as an Indicator of Financial Reporting Fraud*

This paper examines the relation between earnings and operating cash flow to derive and test an indicator of financial statement fraud. Accrual measurement concepts indicate that financial statement fraud should be associated with high levels of earnings relative to operating cash flow. We demonstrate that the excess of earnings over operating cash flow is extreme in most fraud cases in years immediately prior to the fraud discovery based on a sample of 56 fraud cases from 1978 to 1991. We compare the distribution of the earnings minus operating cash flow variable for fraud firms with that for a sample of 60,453 firm-years for firms listed on COMPUSTAT. We test a logistic regression model in which the discovery/nondiscovery of fraud is the dependent variable, and earnings minus operating cash flow is the explanatory variable. Other control variables are included in the model based on prior studies. Results are consistent with expectations derived from accrual measurement theory. We then examine the predictive ability of the model using our sample of fraud firms and a sample of nonfraud firms in the same four-digit SIC code industries. Observations for the fraud firms are for the fiscal year prior to the discovery of fraud. Observations for the nonfraud firms are for the same fiscal years as the fraud firms in the same industries. The predictive ability of the model, including the excess of earnings over operating cash flow, is substantially higher than the predictive ability of the model omitting this variable. We conclude that the earnings-operating cash flow relation provides important information for those interested in identifying financial statement fraud, especially when considered in conjunction with other factors associated with fraud risk.     

The Impetus for (and Limited Power of) Business Self‐Regulation: The Example of Advergames

When people complain, government agencies often respond. When regulations are threatened, businesses often offer reassurances that the problems can be handled with a self‐regulation code. However, past analyses of the power of self‐regulation find that while companies' voluntary adherence to self‐defined guidelines may effect some change in the activities of some companies, the inherent limitations of self‐regulation in the United States may restrict its ability to actually halt or control the undesired practices of others. The recent response by major food manufacturers and marketers to criticism of online games is an example of this mix.