Do goodwill impairments affect audit opinions? Evidence from China

There has been a steady growth of goodwill impairments in the Chinese stock market since the adoption of the impairment approach in accounting. The influence of goodwill impairments on a firm’s financial position and profitability give reason to doubt its current and future performance. We examine whether auditors, as a crucial external monitor, identify the information risks of goodwill impairments and express their concerns about financial reporting quality in their audit opinions. Using a sample of firms listed on China’s A-share market from 2007 to 2017, we test the association between goodwill impairments and the type of audit opinion received in the same financial period. Our findings are as follows. First, the probability of receiving a modified opinion increases with the amount of goodwill impairments. Second, the positive association between goodwill impairments and modified audit opinions is driven primarily by earnings management risks. Third, this positive association is more salient when auditors are industry experts and there is no auditor–client mismatch. Fourth, auditors are more sensitive to the amount of goodwill impairments than to their mere existence. Overall, we document that auditors perceive goodwill impairments as a signal of information risks and communicate their concerns to investors to avoid litigation.     

Monitoring the foreign exchange rate benchmark fix

ABSTRACT

We develop a Manipulation Index (ManIx) that captures the potential manipulation intention of dealers during the World Markets/Reuters (WMR) benchmark (London Close) period at 4 pm London time through a unique algorithm and simulation. The application of this model (using a dataset with dealers’ identities) can identify banks that are prone to potential manipulative behavior. The results concerning the identified banks are validated by the regulatory investigations. Implementation of this algorithm allows regulators better direct their limited resources towards more targeted in-depth investigation.     

跨越竞争丛林与范式重构：全球治理改革进程中的疫苗产业创新治理

疫苗作为新冠疫情防控的最关键手段之一，已在各国抗疫中发挥积极影响。疫苗研发、生产、注射意愿以及全球分配的公平性与可及性等一系列问题日益受到世界关注。分析全球治理改革中，疫苗作为一种全球公共产品的创新治理问题，讨论疫苗产业发展特征与创新规律演化，剖析西方国家疫苗产业创新治理困境以及“竞争丛林”逻辑，阐释中国行动方案及对全球治理改革的贡献。最终提出疫苗产业创新治理机制对推动全球治理改革的政策含义。     

When Do Qualitative Risk Disclosures Backfire? The Effects of a Mismatch in Hedge Disclosure Formats on Investors' Judgments

Disclosure standards mandate the quantitative disclosure of hedging‐instrument‐related risks but not the disclosure of hedged‐item‐related risks. We examine how a match (mismatch) in formats, caused by making quantitative (qualitative) hedged item disclosures alongside quantitative hedging instrument disclosures, affects investors' integration of information from these two related disclosures. Our first experiment varies the hedged item disclosure format (quantitative or qualitative) and the portion of risk hedged (small or large). We find that when disclosure formats are mismatched, the less comparable nature of the two disclosures caused investors to neglect the offsetting relationship when assessing net risks. As a result, risk and investment judgments were influenced by the more prominent quantitative hedging instrument disclosures. Our second experiment finds that the use of a qualitative debiaser that clarifies the relationship between the two disclosures led to the integration of information and mitigated this effect.     

Enhancing urban infrastructure investment planning practices for a changing climate.

Climate change raises many concerns for urban water management because of the effects on all aspects of the hydrological cycle. Urban water infrastructure has traditionally been designed using historical observations and assuming stationary climatic conditions. The capability of this infrastructure, whether for storm-water drainage, or water supply, may be over- or under-designed for future climatic conditions. In particular, changes in the frequency and intensity of extreme rainfall events will have the most acute effect on storm-water drainage systems. Therefore, it is necessary to take future climatic conditions into consideration in engineering designs in order to enhance water infrastructure investment planning practices in a long time horizon. This paper provides the initial results of a study that is examining ways to enhance urban infrastructure investment planning practices against changes in hydrologic regimes for a changing climate. Design storms and intensity-duration-frequency curves that are used in the engineering design of storm-water drainage systems are developed under future climatic conditions by empirically adjusting the general circulation model output, and using the Gumbel distribution and the Chicago method. Simulations are then performed on an existing storm-water drainage system from NE Calgary to investigate the resiliency of the system under climate change.     

Dewatered alum sludge: a potential adsorbent for phosphorus removal.

Alum sludge refers to the by-product from the processing of drinking water in water treatment works. In this study, groups of batch experiments were designed to identify the characteristics of dewatered alum sludge for phosphorus adsorption. Air-dried alum sludge (moisture content 10.2%), which was collected from a water treatment works in Dublin, was subjected to artificial P-rich wastewater adsorption tests using KH2PO4 as a model P source. Adsorption behaviours were investigated as a function of amount and particle size of alum sludge, pH of solution and adsorption time. The results have shown that pH plays a major role not only in the adsorption process but also in the adsorption capacity. With regard to adsorption capacity, this study reveals the Langmuir adsorption isotherm being the best fit with experimental data (R2 = 0.98-0.99). The maximum adsorption capacities range from 0.7 to 3.5 mg-P/g when the pH of the synthetic P solution was varied from 9.0 to 4.3, accordingly. The outcome of this study indicated that alum sludge is suitable for use as an adsorbent for removal of phosphate from wastewater.     

Self‐help in housing and chengzhongcun in China's urbanization

This article focuses on the housing issues of rural migrants arising from urbanization, with particular reference to chengzhongcun, a topic with considerable impact on policymaking. An attempt is made to understand the underlying rationale of self‐help in housing and the important role of chengzhongcun in sheltering rural migrants in the context of China's rural‐urban dichotomy. As demonstrated in this study, chengzhongcun accommodate, with little in the way of government resources and assistance, millions of rural migrants because of their social accessibility and affordability. While not denying their social problems, we argue that chengzhongcun in fact act as an innovative and positive agent to promote urbanization in present day China by housing massive numbers of rural migrants and assimilating them into cities. Current government policies towards chengzhongcun have generated a wide range of interest conflicts and confrontations. The consequences of such conflicts show that the government policies were problematic and unworkable, as they violated basic market principles as well as citizen rights. Policy strategy towards the redevelopment of chengzhongcun must acknowledge their credibility in the Chinese road to urbanization and requires more thoughtful and prudent consideration of migrants' demands for affordable housing.     

Corporate governance and firm performance in Russia: an empirical study

Using the agency and institutional perspectives, this study advances several hypotheses about the board structure–firm performance relationship within Russia. We tested these hypotheses using survey data. Despite a relatively small sample size, predictions from both theoretical perspectives were supported. Specifically, we found a negative relationship between “informal” CEO duality and firm performance. This finding is noteworthy given the 1996 Russian Federal law which prohibits the CEO from also serving as board chair. Also, we found that the more vigorously the firm pursues a retrenchment strategy, the more negative the relationship between proportion of inside directors and firm performance. Overall, these findings suggest that effective corporate governance may be essential to firm performance in Russia.     

THE STATISTICAL DISTRIBUTION OF EXTREME VALUES OF WAVE-CURRENT FORCES ACTING ON SLENDER CIRCULAR CYLINDER IN IRREGULAR WAVES

Based on model test,the statistical distribution of extreme values of wave-current in-line forces acting on vertical circular cylinder is analyzed in this paper.It is shownthat the results calculated by the simplified method,proposed by authors,agree well with the testdata;Weibull distribution is also adoptable in the region of high KC number, and the shapeparameter a and scale parameter β are related well with KC number respectively.     

Contrarian Investment in the Dutch Stock Market

The efficient markets hypothesis states that at any times security prices fully reflect all available information. Contrarian investment strategies do not recognize the efficiency of capital markets. They call for buying undervalued stocks, i.e. stocks with a low price relative to their fundamentals. The idea behind such a strategy is to take advantage of the extrapolation behaviour of naive investors. Using a fresh and extensive data set from the Dutch stock market, we found that these strategies yield an outperformance without a higher risk. Our results make it hard to maintain the efficient market hypothesis.