Decomposition of Fraud‐Risk Assessments and Auditors' Sensitivity to Fraud Cues*

Practitioners and regulators are concerned that when auditors perceive management's attitude or character as indicative of low fraud risk, they are not sufficiently sensitive to high levels of incentive or opportunity risks in their overall fraud‐risk assessments. In this study, we examine whether a fraud‐triangle decomposition of fraud‐risk assessments (that is, separately assessing attitude, opportunity, and incentive risks prior to assessing overall fraud risk) increases auditors' sensitivity to opportunity and incentive cues when perceptions of management's attitude suggest low fraud risk. In an experiment with 52 practicing audit managers, we find that auditors who decompose fraud‐risk assessments are more sensitive to opportunity and incentive cues when making their overall assessments than auditors who simply make an overall fraud‐risk assessment. However, this increased sensitivity to opportunity and incentive cues appears to happen only when those cues suggest low fraud risk. When opportunity and incentive cues suggest high fraud risk, auditors are equally sensitive to those cues whether they use a decomposition or a holistic approach. We discuss and examine potential explanations for this finding.     

Effective sludge solubilization treatment by simultaneous use of ultrasonic and electrochemical processes.

Sludge disintegration treatment by using simultaneously ultrasonic irradiation and electrolysis was investigated experimentally. A lab-scale diaphragm cell irradiated with ultrasound at a constant oscillating frequency of 20 kHz was used as a reactor. The batch experiments were carried out under different conditions of electric outputs of the ultrasonic generator, electric current for the electrolysis and different initial SS concentrations. A simultaneous treatment in the cathodic compartment without any chemical doses considerably facilitated the sludge solubilization, compared to the sonication alone. An increase in the electric current up to 400 mA under a constant ultrasonic density decreased the specific energy by 55% within the experimental range. The specific energy consumption was also reduced when the initial SS concentration increased. In addition, before carrying out the simultaneous treatment, a brief electrolysis was effective for further reduction of the specific energy and the acceleration of soluble COD generation.     

Using a weight-of-evidence approach for management of watersheds.

This research used a weight-of-evidence approach to evaluate sources of contaminants in a drinking water watershed that serves as part of the City of Boston's water supply. The approach incorporated land use analysis using GIS, sanitary surveys, traditional water quality monitoring and microbial source tracking (MST) tools. Case-study tributaries were selected based on elevated faecal coliform counts. Land use analysis and sanitary surveys were used to identify suspected microbial sources, including residential septic systems, agricultural animal operations, commercial/industrial operations and wildlife activity. Sampling sites were selected to hydrologically isolate potential contamination sources. Samples were collected seasonally over 1 year and analysed for traditional and MST parameters. Results demonstrated that both septic systems and a horse stable were contributing microbial loads in the first tributary. In the second tributary, septic systems from the townhouses were contributing microbial loads while a plant nursery was contributing organic matter. This evidence was used to evaluate best management practices to mitigate the contamination.     

Endogenous Group Formation

While the rules governing the formation of groups engaging in collective action may have significant impact on group size and behavior of members, most experiments on public goods have been conducted with the subjects in exogenously fixed groups or of fixed sizes. We study endogenous formation of groups in a public‐goods provision game by allowing subjects to change groups under three sets of rules: free entry/exit, restricted entry with free exit, and free entry with restricted exit. We find that the rules governing entry and exit do have a significant impact on individual behavior and group‐level outcomes.     

中国投资者进军美国市场将获新途径

中国股市从不久前的辉煌之巅急转直下，而与此同时，这个全球第一人口大国的投资者们又将获得新的渠道进军包括美国在内的海外股市。     

Generalized piecewise linear histograms

We extend the concept of piecewise linear histogram introduced recently by Beirlant, Berlinet and Györfi. The disadvantage of that histogram is that in many models it takes on negative values with probability close to 1. We show that for a wide set of models, the extended class of estimates contains a bona fide density with probability tending to 1 as the sample size n increases to infinity. The mean integrated absolute error in the extended class of estimators decreases with the same rate n^–2/5 as in the original narrower class.     

THE EFFECT OF INVESTMENT IN INTERORGANIZATIONAL INFORMATION TECHNOLOGY IN A RETAIL SUPPLY CHAIN

The primary purpose of this research was to investigate the effect of investment in information technology in a supply chain. The results of that investigation are presented by focusing on an empirically tested supply chain relationship model containing both behavioral and operational constructs. The four behavioral constructs represented in the model are relationship trust, relationship commitment, relationship dependence, and long‐term relationship orientation. The four operational constructs represented in the model are retailer investment in interorganizational information technology, perceived supplier investment in interorganizational information technology, logistics efficiency, and logistics effectiveness. Among other findings, the results of the investigation found that perceived supplier investment in interorganizational information technology has a significant and positive effect on logistics efficiency.     

RELATIONSHIP MAGNITUDE AND ITS ROLE IN INTERORGANIZATIONAL RELATIONSHIP STRUCTURE

Close relationships between and among supply chain members are becoming more prevalent. However, there is lack of agreement in the literature and in practice concerning the characteristics of different interorganizational relationships. The resultant confusion is an obstacle to the progression of research and could cause problems among firms in a supply chain. Based on previous research and an exploratory study conducted with company executives responsible for supply chain management activities, this article seeks to introduce the concept of relationship magnitude (i.e., the extent or degree of closeness or strength of the relationship) and differentiate it from relationship type (i.e., classes of relationships that share common traits). Implications for managers and opportunities for future research are provided.