What Questions Do Board Members in Public Service Organizations Ask about Executive Compensation?

The purpose of this study is to investigate the governance questions that board members in public service organizations ask as they go about fulfilling their responsibilities for the oversight of executive compensation. We investigate the usage and perceived importance by board members of the 24 questions proposed by the Canadian Institute of Chartered Accountants that directors should ask about executive compensation. The study is based on a usable sample of 47 board members from public service organizations who attended a Canadian director training program. Our results suggest that the recommended executive compensation governance questions are not being asked with the same frequency or considered equally important by board members of public service organizations. Furthermore, the correlation between a question’s usage frequency and its perceived importance was not perfect. However, there appears to be a significantly positive relationship among the number of executive compensation governance questions asked and selected elements of a board’s governance structure.     

Do PCAOB Inspections Improve the Accuracy of Accounting Estimates?

Despite issuing extensive guidance related to the evaluation of accounting estimates, the PCAOB continues to identify deficiencies related to the audit of estimates through their inspections process. We examine whether PCAOB inspections lead to more accurate audited accounting estimates, defined as those that more closely match economic reality, by examining a significant estimate within the banking industry. We find that in contrast with the PCAOB's goal of more accurate and unbiased estimates, allowance for loan losses (ALL) estimates become less accurate and more conservative with higher levels of ALL‐related inspection findings for public company audits. We find no evidence of auditor response to PCAOB inspection findings for private‐company audits, which are not subject to PCAOB inspection. Overall, our findings cast doubt on the efficacy of PCAOB inspections in improving estimate accuracy and suggest that firms are managing inspection risk to the potential detriment of audit quality.     

When Does One Bad Apple Spoil the Barrel? An Evolutionary Analysis of Collective Action

This paper studies collective-action games in which the production of a public good requires teamwork. A leading example is a threshold game in which provision requires the voluntary participation of m out of n players. Quantal-response strategy revisions allow play to move between equilibria in which a team successfully provides, and an equilibrium in which the collective action fails. A full characterization of long-run play reveals the determinants of success; these include the correlation between players' costs of provision and their valuations for the good. The addition of an extra "bad apple" player can "spoil the barrel" by destabilizing successful teams and so offers a rationale for limiting the pool of possible contributors.     

Working‐class consumer credit in the UK, 1925–60: the role of the check trader1

This article provides fresh insights into working‐class credit by examining the history of check trading. It explains the system's origins, and its dependence on a series of relationships involving check traders and their agents, retailers, and customers. Data from the market leader— Provident Clothing and Supply Co. Ltd—is analysed to explore the scale and scope of the sector, and to examine its history from the early 1920s to the 1960s. Check trading was both an important and controversial supplier of credit to working‐class families, and the article explores criticisms of the system, and the reason for its popularity.     

Efficient Allocation of Radio Spectrum

Legislative reforms in Anglo‐American countries require governments to account for efficient spectrum usage subject to interference control. New spectrum governance regimes promote flexible and competitive usage but the broadcasting industry remains exempt from reforms, at a significant cost to society. The need to liberalize broadcast spectrum cannot be overstated, but how should we select among alternative deregulatory regimes? In a simple stylized model we formalize the welfare effects of allocating licenses for using bandwidth on broadcast spectrum. We provide optimality conditions for entry, spectrum usage, and congestion levels under different market conditions, which allows us to justify the selection of specific governance arrangements.