An Analysis of Potential Legal Liability Incurred Through Audit Expert Systems

The introduction of expert systems technology into the audit environment has opened a new avenue of auditor legal liability. This paper examines the potential impact expert systems will have on auditor liability. The presentation of this new avenue of auditors' legal liability explores both the potential for litigation under failure of auditor/expert system collaboration to yield prudent decisions and the failure to use an available expert system. The risks evolving from failure to use an available expert system include the possibility that the system could be used against the auditor in the courtroom. While case law will ultimately determine the bounds of this liability, this paper acquaints the reader with the important legal issues involved and the varied outcomes that could emerge. It should also be noted that while the specific example presented in this paper relates to the audit profession, the legal concepts are of equivalent concern to other professions enduring broad implementation of expert systems.     

European Works Councils in Central and Eastern Europe: varieties of institution building among French service sector multinationals

European Works Councils (EWCs) were launched as important institutions capable of helping workers coordinate responses to multinational corporations (MNCs). Euro‐optimists hoped they might help the transfer of the European social model to Central and Eastern Europe (CEE). Euro‐pessimists believed they lacked the capacity to be effective and suggested EU enlargement might encourage ‘a race to the bottom’ in Western Europe. This article focuses on the behaviours of eight service sector French‐origin multinationals in Bulgaria, Hungary and Poland. It finds that they generally adapt to the host country social model. However, while most keep their subsidiaries in separate compartments, investing little in EWC institution building, some are more ready to invest in stronger EWC institutions and to use them as an integrating tool.     

Cost-effectiveness of telaprevir in combination with pegylated interferon alpha and ribavirin in previously untreated chronic hepatitis C genotype 1 patients

Background:

Telaprevir (T, TVR) is a direct-acting antiviral (DAA) used for the treatment of genotype 1 chronic hepatitis C virus (HCV) infection. The sustained virological response (SVR) rates, i.e., undetectable HCV RNA levels 24 weeks after the end of treatment, is what differentiate treatments. This analysis evaluated the cost-effectiveness of TVR combined with pegylated interferon (Peg-IFN) alfa-2a plus ribavirin (RBV), with Peg-IFN and RBV (PR) alone or with boceprevir (B, BOC) plus Peg-IFN alfa-2b and RBV, in naïve patients.

Methods:

A Markov cohort model of chronic HCV disease progression reflected the pathway of naïve patients initiating anti-HCV therapy. SVR rates were derived from a mixed-treatment comparison including results from Phase II and III trials of TVR and BOC, and trials comparing both PR regimens. SVR has significant impact on survival, quality-of-life, and costs. Incremental cost per life year (LY) gained and quality-adjusted-life-year (QALY) gained were computed at lifetime, adopting the (National Health Service) NHS perspective. Cost and health outcomes were discounted at 3.5%. Uncertainty was assessed using deterministic and probabilistic sensitivity analyses. Sub-group analyses were also performed by interleukin (IL)-28B genotype and fibrosis stage.

Results:

Higher costs and improved outcomes were associated with T/PR relative to PR alone, resulting in an ICER of £12,733 per QALY gained. T/PR retained a significant SVR advantage over PR alone and was cost-effective regardless of IL-28B genotype and fibrosis stages. T/PR regimen ‘dominated’ B/PR, generating 0.2 additional QALYs and reducing lifetime cost by £2758. Sensitivity analyses consistently resulted in ICERs less than £30,000/QALY for the T/PR regimen over PR alone.

Limitations:

No head-to-head trial provides direct evidence of better efficacy of T/PR vs B/PR.

Conclusion:

The introduction of TVR-based therapy for genotype 1 HCV patients is cost-effective for naïve patients at the £30,000 willingness-to-pay threshold, regardless of IL-28B genotype or fibrosis stage.     

MEASUREMENT AND DETERMINANTS OF EFFICIENCY AND PRODUCTIVITY IN THE FURTHER EDUCATION SECTOR IN ENGLAND

This study uses data for nearly 200 further education providers in England to investigate the level of efficiency and change in productivity over the period 1999–2003. Using data envelopment analysis we find that the mean provider efficiency varies between 83 and 90 percent over the period. Productivity change over the period was around 12 percent, and this comprised 8 percent technology change and 4 percent technical efficiency change. A multivariate analysis is therefore performed, which shows that, in general, student-related variables such as gender, ethnic and age mix are more important than staff-related variables in determining efficiency levels. The local unemployment rate also has an effect on provider efficiency. The policy implications of the results are that further education providers should implement strategies to improve the completion and achievement rates of white males, and should also offer increased administrative support to teachers.     

A CONTINGENT VALUATION STUDY OF UNCERTAIN ENVIRONMENTAL GAINS

Acid deposition in a present and future cause of biodiversity losses in vulnerable upland areas of Scotland important for nature conservation. However, the exact nature of damages under the status quo, and both the timing and extent of recovery of upland ecosystems if deposition is reduced, are subject to uncertainty. this uncertainty complicates damages cost estimation. In this paper, we have explored the use of CVM to measure the willingness to pay (WTP) of the Scottish population for uncertain recovery/damage scenarios from reduced acid rain deposition. An optimally-designed referendum format was used utilising the distribution of open-ended bids from a pilot study to determine bid amounts and sampling size for each bid amount. Eight explanatory variables, including future damage level were selected in a non-linear step-wise regression analysis. Average household WTP for abatement of acid rain was £247 and £351 per year when faced with low and high future damage levels respectively. Recovery level and recovery time did not significantly influence WTP. When faced with risky outcomes regarding future damage and recovery level, respondent were found to be risk averse to both environmental gains and losses.     

Reputation and Corporate Social Responsibility Aberrations,Trends, and Hypocrisy: Reactions to Firm Choices in the Stock Option Backdating Scandal

Drawing on strategic corporate social responsibility (CSR) and reputation theory, this paper examines the market reaction to firm disclosures of involvement in the US stock option backdating scandal. We examine how a firm's prior signals regarding ethical behaviour and values, as demonstrated through CSR initiatives, may both ameliorate and exacerbate market reactions. CSR initiatives may buffer a firm against general wrong‐doing but expose it to greater scrutiny and sanction for related wrong‐doing. Our results show that firms with enhanced overall reputations for CSR are partially buffered from scandal revelations. However, we find that when firms possess an enhanced reputation for CSR associated with corporate governance, violations pertaining specifically to governance are viewed as hypocritical and more harshly sanctioned. We also find lower and negative market reactions for firms that delay but self‐disclose their involvement in the scandal. The study extends the emergent, related literatures on strategic CSR and reputation management, and documents dynamics in the relationship between corporate social and financial performance.     

Tracking Progress Towards Statistical Capacity Building Efforts: The African Statistical Development Index

This paper presents the development of the African Statistical Development Index, a composite index that aims at supporting the monitoring and evaluation of the implementation of the Reference Regional Strategic Framework for Statistical Capacity Building in Africa. It also helps to identify, for each African country, weaknesses and strengths of the National Statistical Systems so that support interventions can be developed. The paper first gives the rationale behind the development of the index as well as the context. It then elaborates on the methodology used to develop the index, including the selection of components and variables, the scaling of the variables, the weighting and aggregation schemes, and the validation process. The methodology is applied to a sample of African countries. Finally, the paper compares the proposed index to existing statistical capacity building indicators and highlights the related limitations.     

A Transdisciplinary Exploratory Model of Corporate Responses to the Challenges of Environmental Sustainability

Global surveys of business leaders identify the environment as a major issue of concern, but uncertainties about how to address the challenges of environmental sustainability are cited as a significant inhibitor to business responses. Persistent levels of corporate uncertainty in this domain may be due to the complexity of issues and difficulties in meaningfully capturing this complexity. Calls have been made for new ways to produce knowledge about complex societal challenges, including environmental sustainability. This paper aims to reduce business uncertainties and to stimulate business and research initiatives. The paper describes a field study of a global corporation's pioneering responses to environmental sustainability. The study highlights academic and practitioner collaboration to generate, transfer and implement new knowledge through an innovative research approach. The outcome is a transdisciplinary, exploratory model, presenting a progression of integrated activities and processes within eight categories of corporate responses. Implications for research and practice are considered. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.