Monitoring Legal Compliance: The Growth of Compliance Committees*

The Committee of Sponsoring Organizations’ (COSO) framework outlines three objectives of internal control. This paper addresses the third and least emphasized component, compliance with laws and regulations. We address the growing importance of board‐level oversight of legal compliance and the emerging role of a separate board committee dedicated to the compliance function. A recent COSO project emphasizes the importance of the monitoring function; COSO observes that many companies are not conducting this function effectively. We examine the use of a board‐level compliance committee to monitor legal compliance. We also discuss the roles of corporate counsel and internal auditors in assisting with monitoring. Our results show that over the last 15 years a growing percentage of S&P 500 firms have adopted a board‐level compliance committee. Internal auditors’ specialized training and expertise in the areas of monitoring and prevention would complement the company’s legal expertise and be of significant value to boards of directors in helping them fulfill their compliance oversight responsibilities.     

Macro‐Fiscal Volatility and the Composition of Public Spending*

Earlier empirical literature has examined some long‐ and medium‐term aspects of macro‐fiscal volatility while leaving its short‐term fiscal impact unexplored. To help fill that gap, we examine the impact of macro‐fiscal volatility on the composition of public spending. To that end, we analyse a panel of 10 EU countries during 1991–2007. Our results suggest that increases in the volatility of regularly‐collected and cyclical revenues such as the VAT and income taxes tend to tilt the expenditure composition in favour of public investment. In contrast, increases in the volatility of ad hoc taxes such as capital taxes tend to favour public consumption spending, albeit only a little. We interpret such volatility innovations as conveying news to the fiscal policymaker about the underlying economic conditions, with especially regularly‐collected and cyclical taxes prompting short‐term cyclical fine‐tuning.     

Afterlife incentives in charitable giving

There is an expanding literature that examines the influence of religion on economic behaviour. Researchers typically do not distinguish among religions, masking important variation across doctrines. Our article adopts a typology of religions based on the construct of salvific merit. Major religious doctrines are ordered based on their linkage between charitable behaviour in this life and condition in the afterlife. Using the Center on Philanthropy Panel Study (COPPS), we exploit variation in household marginal tax rates (a subsidy to charitable giving) to test the influence of major religious doctrines on charitable giving. We find that charitable giving by adherents to high-salvific-merit religions are less sensitive to changes in charitable subsidies. Adherents to low-salvific-merit religions behave more like nonreligious households. Our results suggest that religious households optimize according to specific doctrines rather than a broad notion of religion.     

Barriers to outsourcing household services to small business

It is popularly assumed that the main barrier that prevents household services from being outsourced to the small business sector is household disposable income. This paper evaluates critically whether this is the case. Reporting survey results from 418 households in the UK city of Sheffield, the finding is that cost is the main barrier in just 38% of instances. Nearly two‐thirds of household services are undertaken in other ways either out of choice or due to the poor availability, quality and reliability of provision by small businesses. How these barriers to outsourcing household services might be tackled is then addressed.     

Dynamic,Interactive Survey Questions Can Increase Survey Data Quality

Survey research is critical to the development of knowledge and market insight in hospitality and tourism. Survey research quality depends on the willingness of respondents to participate, and this is decreasing. The recent development of dynamic, interactive online survey question formats may contribute to solving this problem by making surveys more engaging for respondents. To the best of the authors' knowledge, this is the first study which compares traditional and dynamic interactive answer formats using objective and subjective assessment criteria. Results indicate that using a simple dynamic, interactive question in a study on tourism and quality of life improved the objective quality of the data and made the survey experience easier and more fun for respondents, thus leading to higher quality data for users of market research on this topic. Given the wide variety of dynamic question formats, users of market research data need to, however, assess on a case-by-case basis if survey questions are merely more entertaining or whether they indeed increase the validity of data.     

The effect of the Internet on front-line employee skills: exploring banking in Sweden and France

This paper aims to explore (1) the Internet effects on the nature of the face-to-face service encounter and (2) what demands this introduces on front-line service employee skills in a banking context. The paper draws on empirical data generated from two banks in Sweden and France, where in-depth interviews with 21 managers have been carried out. The paper argues that in light of the Internet, the face-to-face service encounter is becoming increasingly interactive and customized, where much attention is paid towards building and maintaining relationships with customers, providing advice and support in customer's decision making, and also, learning from and acquiring qualitative information about the customer. This up-scaling of the face-to-face service encounter entails an increase in job complexity and task discretion, involving demands for high-level skills such as information provisioning and evaluation, and emotional skills such as empathy, interpretive skills, conversational skills, and management of body language.     

An Empirical Analysis of International Accounting Standards, Equity Markets, and Economic Growth in Developing Countries

The International Accounting Standards Committee receives widespread support for its efforts to 'harmonize' international accounting. International Accounting Standards (IASs) are, however, controversial, particularly in the context of developing countries. The authors report the results of an exploratory study empirically examining the relationships between the adoption of IASs, equity market development, and economic growth in developing countries with equity markets. They analyzed 27 developing countries by means of a cross-national sociological research design and partial least squares. The results indicate no major association between developing countries' equity market development and economic growth due to adoption of IASs. Questions for future research are proposed.     

A note on stopping rules for rolling production scheduling

Instead of solving fixed horizon production scheduling problems with specified terminal inventory conditions, we use forecasting to extend the problem horizon until stopping rule conditions are met. Major questions for this procedure relate to how to provide data for the extended problem and when to stop the process. We provide extensive computational results indicating that relatively simple methods perform quite well.