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The financial reporting requirements for publicly traded companies have undergone a significant transformation due to the passage of the Sarbanes‐Oxley Act (SOX). Companies are now required to report on the operating effectiveness of their internal controls over financial reporting. Additionally, the independent auditor is required to assess and report on the effectiveness of their client's internal controls, and they must attest to management's internal control assessment. The purpose of this paper is to examine the costs and benefits associated with Section 404 of the SOX of 2002.

Qualitative analysis and deductive reasoning are used to evaluate the net benefits of Section 404 to the securities markets.

Qualitative analysis demonstrates that the new internal control reporting requirements have negative net benefits to the securities markets because of excessive cost and ambiguous interpretation. Elimination of formal internal control reporting is recommended.

This paper demonstrates that major revisions of Section 404 of the SOX are desirable for optimal allocation of resources related to financial reporting.

The highly publicized accounting scandals of the recent past seriously damaged the credibility of the accounting profession. In an effort to restore public confidence in the capital markets, the US Congress passed the Sarbanes‐Oxley Act of 2002. A central theme of this new law is the attempted reduction of major audit failure by stricter governmental regulation of the accounting profession and the creation of the Public Company Accounting Oversight Board. This paper discusses the likely effectiveness of the Sarbanes‐Oxley Act in the reduction of major audit failures. Four root causes of audit failure are identified, and issues not addressed by the Sarbanes‐Oxley Act that may have audit failure implications are discussed. Recommendations for improvements that potentially further reduce the likelihood of audit failure are presented.

The gap between what the public expects from the auditor and what the auditor perceives his or her role to be has exacerbated crises within the accounting profession. Perceived audit failures, followed by historically large law suits, have resulted in the alteration of accounting firms’ behavior. Ironically, the response has done little to alleviate the crisis in public confidence and has led to other concerns related to the auditor‐client relationship. Discusses issues associated with the expectation gap and posits that the profession’s efforts to educate users as to the nature of the audit process is a necessary, but insufficient, response. A two‐part strategy is proposed to effect structural change of the auditor‐client environment. Part one of the strategy calls for greater involvement of regulators in selecting the external auditor and requiring auditor rotation. Part two of the strategy proposes market‐based instruments, audit failure permits and audit disaster futures, to deal with remaining audit risk.

This chapter explores the impact of equality, diversity, and inclusivity (EDI) on internal change agents’ (ICAs) personal and professional development. We have surveyed 117 ICAs that undergo a four-year digital development programme at Edinburgh Business School (EBS). Our survey design draws from expectancy, surprise, sensemaking, and attribution theories to test four hypotheses using Spearman’s rank. We found that diversity features such as gender, age, sector affiliation, work experience, management responsibility, and programme stage do not strongly impact ICAs’ experience of personal and professional development. Surprisingly, some diversity features had a modest or moderate impact on ICAs’ experience of personal and professional development. This disconfirmed our basic assumption about the effectiveness of inclusivity practices in the digital development programme at EBS. We conclude that future research should further investigate the impact of evaluation on ICAs’ personal and professional development and how we can secure it in a digital Business School context.

The purpose of this paper is to consider the significance of the sources of cost of construction plant theft identified in previous studies and derive rates which can enhance proper estimation of the cost of plant theft to the construction industry. The direct and indirect costs of plant theft include replacement cost (new‐for‐old/depreciated), emergency cost, hire replacement cost, productivity loss, increased labour cost, loss of goodwill, administration cost, increased insurance premium and social cost.

The cost‐contribution of these various sources was studied, using a structured questionnaire which was administered to building contractors in the UK construction industry, to measure their opinions of the frequency and severity of the contribution of the sources to the cost of construction plant theft. The questionnaires were administered to 220 companies and 51 of them were fully completed, representing 23.1 per cent of the original sample. The responses were analysed using descriptive and inferential statistics to derive the probabilities of sources contributing to the cost of plant theft.

The results of the analysis show that the rates of contribution to the cost of plant theft varies significantly between the sources, with “loss of output” and “increased insurance premium” ranking as the top‐two costs of plant theft in the UK construction industry. The rates derived in this study can be used by contractors to reasonably estimate the cost of plant theft, especially when there is need to justify the adoption of measures that can mitigate plant theft.

This study generated rates of contribution by factors which contribute to the overall cost of theft of construction plant in the UK. These rates can provide a more reliable estimate of the cost of plant theft than current estimations which vary significantly.

While some may perceive technology as disruptive in higher education, this chapter makes a case that video technology can be used to increase collaboration and engagement in learning and teaching. It is argued that digital storytelling can be integrated as part of the assessment in graduate-level courses without compromising expectations related to academic rigor. Rather, digital storytelling advances multimedia literacy for the individual and supports the generation of bounded learning communities, specifically in online and blended programmes. Covering social presence, teaching presence and cognitive presence, the chapter draws on two examples of digital storytelling used in the MA in Conflict Analysis and Management and the MA in Global Leadership at Royal Roads University, Canada. Overall, the chapter makes a contribution to the conversation of how assessment formats can be updated to match the shift from traditional, lecture formats and brick-and-mortar institutions to applied, collaborative programmes that are often delivered in blended and online formats. Thus, as the field of higher education continues to evolve and adapt alongside technological innovations, the chapter suggests that digital storytelling can be one way to complement and update assessment formats to match the evolution of the twenty-first century.

The quality of strategic decisions made at the helm of corporations matters a great deal. Predominantly, research on strategic decision-making has focused on CEOs as if they decide alone. Yet in reality, even the most powerful CEO makes strategic decisions together with an executive board. This chapter offers a theoretical explanation of strategic board decision-making through the emotional contagion between the CEO and board members.

We used both previous research and qualitative material – two case studies and interviews with several dozen CEOs of large corporations as well as the board members of one of them – to build our theoretical model.

Our inBoard Emotional Contagion Model (inBECM) specifies the following individual–collective emotional dynamics: After a strategic affective event has triggered an affective discussion within the boardroom, the emotionally intelligent CEO communicates verbally in order to – through an emotional contagion – homogenize board members’ emotional states leading to shared sense-making of the event and – potentially – to improved decision-making.

Suggestions are made for the inBECM contribution to emotion theory. Implications are stated for the key role of emotion in improving board decision-making and strategizing.

THE publication last month of the long‐anticipated Report of the Departmental Public Libraries Committee is, of course, the principal recent event. It is too long to allow us to give a full account of its arguments and conclusions, and in common with all who work for libraries we must return to it again and again in the future. It may be said, however, that it will allay the fears of those who thought that one result of the Committee's deliberations would be to support and to suggest the implementing of the Report of the Adult Education Committee of the lamented Ministry of Reconstruction, which would have handed over the public libraries of the country as a gift to the directors of education. This report does nothing of the kind; it even suggests that as public opinion is clearly opposed to such a course, the libraries should remain in the hands of those who made them an admitted success even under the adverse conditions of the limited rate. Thus the way is open to real progress, and the very confined conditions which would be a necessary result of the absorption of libraries in the official education machinery are not immediately to be dreaded.