The Temporal Price Relationship between S&P 500 Futures and the S&P 500 Index

This paper empirically examines the intraday price relationship between S&P 500 futures and the S&P 500 index using minute-to-minute data. Three-stage least-squares regression is used to estimate lead and lag relationships with estimates for expiration days of the S&P 500 futures compared with estimates for days prior to expiration. The results suggest that futures price movements consistently lead index movements by twenty to forty-five minutes while movements in the index rarely affect futures beyond one minute.     

A Community Survey of Purchase Experiences of Older Consumers

A telephone survey was conducted which examined recent purchase experiences for 282 older consumers residing in a midwestern academic community. The types of purchases studied were eyeglasses, funeral services, hearing aids, home appliance repair services, home repair services, and nursing home care. Generally high satisfaction levels were reported for these purchases. A tendency on the part of the respondents to draw upon past knowledge and experience in making their purchase decisions was found. A procedural caution is noted in the interpretation of social survey data on local consumer services.     

Audit Labor Usage and Fees under Business Risk Auditing

The adoption of business risk audit (BRA) approaches during the 1990s by several leading audit firms has been the subject of considerable scrutiny and commentary. Under BRA, the auditor responds to the increasing complexity of auditee financial reports by acquiring a deep and comprehensive understanding of the auditee's industry, strategy, business models, and processes—tasks best accomplished by higher-ranked labor—and by employing this understanding to make audit labor allocations. Using proprietary data for 165 audits conducted in 2002, we investigate three propositions about audit labor use under BRA. First, relative to pre-BRA benchmarks for the same auditor, we expect BRA audits to use a greater proportion of higher-ranked labor. Second, we expect engagements with high assessed auditor business risk (ABR), a summary risk assessment that reflects the BRA auditor's rich understanding of the auditee, to be allocated more labor and more higher-ranked labor than pre-BRA benchmarks. Third, at all ranks of labor, we expect a positive association between assessed ABR and levels of labor use. We find empirical evidence consistent with these propositions. We also find that total labor use in our sample is only modestly lower than pre-BRA norms. Analysis of fee data from these engagements suggests that audit fees in 2002 are substantially less than would be expected under pre-BRA benchmarks. After controlling for audit labor use, both total fees and fees per hour increase with assessed ABR for first-year auditees but not for continuing auditees. Overall, our results provide evidence on the impact of the BRA audit regime and speak to the likely impact of BRA on audit effectiveness and efficiency.