The effects of environmental risk information on auditors' decisions about prospective financial statements

This study tests a model of how auditors make decisions when presented with environmental risk information in the context of a task that requires their professional opinion on a company's forecasted information. Auditing provided a small-world context where declarative and procedural knowledge have been well documented in terms of the rules for analysing financial information. This research uses a conceptual modelling approach to determine auditors' perceptions of environmental risk information and the effects on their judgement and decision choices when issuing an examination report supporting forecasted financial statements. Auditors were provided with environmental risk information that they had to process and integrate in their decision-making. The results demonstrated that auditors act on unfamiliar declarative knowledge using their standard procedural knowledge. The results from eighty-four senior auditors displayed evidence that auditors' perception of environmental risk information is downplayed compare to the traditional accounting information during their judgement and decision choice phases. When confronted with conflicting information, auditors tend to place more reliance on financial rather than environmental risk information. One of the implications of this study is that auditors should be trained to handle non-traditional information, such as environmental risk.     

How are internally oriented HRM policies related to high-performance work practices? Evidence from Singapore

This examination of policies relating to the internal cultivation of human resources and high-performance work systems among a sample of Singapore-based organizations shows that the HRM practices under consideration reflect three distinct dimensions: internal staffing, employee development, and employment stability. Of the three dimensions, only employee development was significantly and positively related to high-performance work systems. Contrary to the arguments in the literature relating to internal labour markets, mutual commitment HRM, and high-performance work systems, policies involving internal staffing and employment stability were not found to be necessary components of the internally oriented HRM package.     

Poverty Intensity in Australia

Even though poverty indices with axiomatically sound properties have been advocated for several decades, most empirical studies of poverty in Australia and elsewhere continue to use the crude, but easily understood, head-count ratio. The difficulty of interpreting the axiomatically more desirable indices is a major reason why their use has been resisted in applied poverty measurement. This paper demonstrates how the more sophisticated poverty indices can be converted into a form that is readily interpreted as a measure of poverty intensity of a group, relative to the population to which the group belongs. The resulting poverty-intensity index is easy to understand and it retains the axiomatic properties of the poverty index on which it is based. We apply the method to Australian data. Poverty measures reported previously in the literature are converted into measures of poverty intensity and interpreted accordingly. We also calculate and interpret some new measures of poverty and poverty intensity using the 1996–97 Income and Housing Costs Survey, Australia (Australian Bureau of Statistics 1997). It is hoped our procedure will lead to wider use of poverty indices that are theoretically superior to the head-count ratio.     

Eagles and Turkeys: Human Capital Externalities,Departmental Co‐authorship and Research Productivity

Lucas (1988) hypothesised that human capital externalities explain persistent productivity growth and become manifest via interactions between workplace colleagues. Consistent with the first part of this hypothesis, Fox and Milbourne (2006) concluded that an increase in the average level of human capital in Australian economics departments raised the research productivity of departmental members. This paper tests the robustness of this finding by using a direct, rather than a proxy, measure of human capital and confirms the existence of human capital externalities within Australian economics departments. But we extend the analysis in two important dimensions. Firstly, we investigate the second part of Lucas' hypothesis by testing whether the externality becomes manifest via co‐authoring. We find no evidence that this type of interaction is associated with higher research productivity, especially for higher quality outputs. Secondly, we control for the likely endogeneity of one's peer group via instrumental variables estimation. In this case, we find that the peer group effect disappears completely for the highest quality outputs but remains for research output more broadly defined.     

False self‐employment: the case of Ukrainian migrants in London's construction sector

This article, presenting qualitative accounts of Ukrainian business owners, highlights how migrants engage in false self‐employment in the UK. Their experiences problematise notions of legality and binary depictions of migrant workers as ‘victims or villains’, demonstrating that migrants see their illegal status as a transient stage before gaining legal status.     

Bicyclist risks and helmet usage patterns: An analysis of compensatory behavior in a risky recreational activity

This article evaluates the risk- and safety-related behavior of adult bicyclists. Probit regression models are applied to national survey data to determine the relationship between accident risks and helmet use. Compensatory behavior, measured in the form of chanes in the likelihood of helmet use, is quantified for discrete changes in risk factors. The results are supportive of the risk compensation hypothesis: changes in the risk of head injury tend to be offset by changes in helmet use. However, the analysis provides no evidence that the magnitude of the compensatory response overwhelms the direct impacts of changes in the risk environment.     

Demographic determinants of the distribution of income

This paper explores both theoretically and empirically the effects of fertility, mortality, migration, household structure and other demographic factors on income distribution. A conceptual framework for income distribution analysis is developed and the direct and indirect effects of demographic factors on this framework assessed. Both partial and systems approaches to empirical analysis are explored. The conclusion is that relationship are complex and the net outcome of demographic changes on distribution cannot be fully understood outside a systems framework.     

Different Pathways that Suggest Whether Auditors’ Going Concern Opinions are Ethically Based

Several critics have reopened the continuing debate regarding the credibility of the auditing profession in part because of auditors’ reluctance to issue warning signals to investors. At the root of auditors’ lack of independence issues are conflicts of interest resulting from the structural features of auditor–client relationship. The Throughput Model (TP) is advanced to illustrate how ethical issues may be influenced by conflicts of interest. In the first stage, the TP provides an isolation of auditors’ ethical positions from six ethical different perspectives. In the second stage, previous TP theory is built upon by arguing a simultaneous analysis of how conflicts of interests may induce auditors’ behavior. We conclude that in the current low litigation risk environment, auditors’ ethical behavior (both conscious and unconscious) is clearly ‹unbalanced’ favoring the reluctance to issue warning signals. Finally, we offer a discussion of potential solutions to improve ethical issues.