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Section 404 of the Sarbanes–Oxley Act (SOX) altered the relationship between auditors and their clients by requiring an external audit of companies’ internal controls. Regulatory guidance is interpreted and applied by external auditors to comply with SOX. The purpose of this paper is to apply service operations management theories and techniques to the internal control audit process to better understand the role regulatory guidance plays in audit services. We discuss service operations management theories that apply to the production of audit services and employ the operations management technique of simulation to examine the effects of a historical relationship between the client and the auditor, information sharing between the client and the auditor, and the auditor’s perceived risk of the client on the internal control audit process. The application of service operations management theories and the simulation results illustrate that risk and information sharing are key factors for the audit process. The results suggest the updated Public Company Accounting Oversight Board guidance from Auditing Standard 2 to Auditing Standard 5 appropriately increased audit effectiveness by encouraging risk-based judgments and information sharing. This paper merges accounting and service operations management research to examine the effects of regulatory guidance on the internal control audit process. The paper uses simulation to illustrate the importance of interpreting regulatory guidance and the specific effects of risk and information sharing on the internal control audit process.

The use of violence risk assessment measures within intellectual disabilities (ID) services is now the norm and a growing target for research. The purpose of this paper is to examine the clinical utility of the historical and clinical factors of the HCR-20 in predicting violence.

The study took place within a national low secure service for adults with ID examining all completed admissions over a six-year period, (N=22). Clinical records covering the first three months of admission were examined along with historical reports and incident data recorded at three, six, nine and 12 months admission using the Modified Overt Aggression Scale (MOAS).

Significant positive relationship between Historical score and total number of incidents was established. Patients with challenging behaviour less likely to have a previous history of violence, and more likely to be older at first violent incident than patients without challenging behaviour. Incidents involving patients with autism were less severe and those with no additional psychiatric diagnosis were significantly more likely to have substance misuse problems than those with a diagnosis.

The study found the Historical section was predictive of violent incidents and whilst the study is too small to draw any firm conclusions, the significant positive relationship between the Historical Score and number of incidents for those without additional diagnosis needs to be investigated further as well as the potential positive clinical impact of using the HCR-20 in routine clinical practice.

The purpose of this paper is to explore how raters combine constituent components of Historical Clinical Risk-20 (HCR-20) risk assessment, and how relevant they rate the tool to different diagnostic and demographic groups.

A cross-sectional survey design of n=45 mental health clinicians (psychiatrists, psychologists, and others) working in a secure hospital responded to an online survey about their risk assessment practice.

HCR-20 Historical and Clinical subscales were rated the most relevant to violence prediction but four of the five items rated most relevant were Historical items. A recent history of violence was rated more important for risk formulation than Historical and Risk management items, but not more important than Clinical items. While almost all respondents believed predictive accuracy would differ by gender, the tool was rated similarly in terms of its relevance for their client group by people working with men and women, respectively.

This was an exploratory survey and results should be verified using larger samples.

Clinicians judge recent violence and Clinical items most important in inpatient violence risk assessment but may overvalue historical factors. They believe that recent violent behaviour is important in risk formulation; however, while recent violence is an important predictor of future violence, the role it should play in SPJ schemes is poorly codified.

It is important that risk assessment is accurate in order to both protect the public and to protect patients from overly lengthy and restrictive detention.

Despite the vast number of studies examining the predictive validity of tools like HCR-20 very little research has examined the actual processes and decision-making behind formulation in clinical practice.

The purpose of this paper is to present and validate a large-scale methodology for risk assessment and management in cultural heritage sites, taking into account their specific tangible or intangible values. Emphasis is given to historic centres that are key resources in building resilience to disasters but are also highly vulnerable due to several factors, such as the characteristics of the built environment, the community and social life, the lack of risk awareness and maintenance and finally the poor regulatory framework for their management and valorisation.

The multi-step procedure starts from the assessment of the attributes of cultural heritage in order to identify priorities and address the analysis. Then, it evaluates the primary and secondary hazards in the area, the vulnerabilities and threats of the site and the impacts of the chain of events. Finally, it allows for calibrating a site-specific set of mitigation, preparedness, response and recovery measures.

The application to two case studies in the Italian peninsula, the historic centres of San Gimignano and Reggio Calabria, allows for identifying research gaps and practical opportunities towards the adoption of common guidelines for the selection of safety measures.

By providing a qualitative assessment of risks, the research points out the potentialities of the methodology in the disaster risk management of cultural heritage due to its capacity to be comprehensive and inclusive towards disciplines and professionals.

Worldwide, natural hazards are affecting urban cultural heritage and World Heritage Sites, exacerbating other environmental and human-induced threats deriving from deterioration, uncontrolled urbanization and unsustainable tourism. This paper aims to develop a disaster risk analysis in Italian historic centers because they are complex large-scale systems that are cultural and economic resources for the country, as well as fragile areas.

A heritage-oriented qualitative methodology for risk assessment is proposed based upon the formalization of risk as a function of hazard, vulnerability and exposure, taking into account the values of cultural heritage assets.

This work provides a contribution to the body of knowledge in the Italian context of disaster risk mitigation on World Heritage Sites, opening for further research on the monitoring and maintenance of the tangible heritage assets. The application to the site of San Gimignano proves the effectiveness of the methodology for proposing preventive measures and actions that ensure the preservation of cultural values and a safer built environment.

The application of a value-based simplified approach to risk analysis is a novelty for historic centers that are listed as World Heritage Sites.

Given the complex association between substance use disorders (SUD), comorbid mental health problems and criminal recidivism in forensic patients, homogenous patient classes can contribute to a refined treatment. This paper aims to construct those classes in forensic patients (N = 286) diagnosed with SUD, unconditionally released between 2004 and 2013 of one of ten Dutch forensic psychiatric centers.

Retrospective data were derived from electronic patient files. Classes were based on the Dutch risk assessment tool, the Historisch Klinisch Toekomst-Revisie (Historical Clinical Future–Revised [HKT-R]) and identified by means of explorative Latent Class Analysis in Latent Gold version 5.1. In a three-step approach, posterior class memberships were related to external variables (i.e. diagnoses, type of drug and type of offence).

Four classes were identified that differ in the risk of recidivism, as well as Axis I and II diagnoses and type of drug consumption.

This study informed on the heterogeneity of forensic patients with SUD and identified four homogenous classes that differ in important variables for the treatment approach. Based on these classes, a more refined treatment approach can be developed. Possible treatment approaches are discussed, but future research is needed to provide evidence.

This study is the first to identify classes within forensic patients with SUD and, therefore, sets the first step to develop a tailored treatment approach based on characteristics informative for treatment.

This study aims to investigate the benefits of commodity hedging in the global stock index, bond and foreign currency (FX) portfolios.

The authors compare various hedging strategies and factor transaction costs. The authors analyze equally weighted, dynamic hedging ratio, risk parity and reward to risk timing strategies. Volatilities are estimated using historical, GARCH(1,1), and APARCH(1,1) methods. In addition, the authors evaluate the portfolio's hedging performance (HP) based on four different dimensions: volatility (annualized standard deviation), Sharpe ratio (SR), HP, and high-low ratio (HL).

The authors observe different benefits of the commodity hedging strategy among financial assets (stocks, bonds or FX).The authors find that commodity hedging in the stock markets is the best option, if the authors optimize the hedging ratio using dynamic hedging from historical data. The authors also document that for stock portfolio managers, adding commodities will generate a more conservative strategy, whereas for bond and/or FX portfolio managers, adding commodities will generate a more aggressive strategy.

This study contributes to the literature by investigating commodity hedging in the global stock index, bond and FX portfolios. First, the authors provide details on the diversification benefits in the commodities. Second, the authors document the hedging strategy that is the best as a part of the diversification strategy by adding commodities. Third, the authors provide a practical analysis by reporting the financial assets portfolio that is appropriate for commodity hedging following the portfolio managers' objectives (e.g. reducing risks or improving the risk-reward ratio).

This study aims to examine whether the methodology proposed by the European Supervisory Authorities (ESAs) within Delegated Regulation (European Union) 2017/653 for the calculation of market risk of certain packaged retail and insurance-based investment products (PRIIPs) is the most appropriate.

Risk models are put into effect to validate the appropriateness of the methodology announced by ESAs. ESAs have announced that the unit-linked (UL) products, labeled as Category II PRIIPs, will be subject to the Cornish–Fisher value-at-risk (CFVaR) methodology for their market risk assessment. We test CFVaR at 97.5% confidence level on 70 UL products, and we test Cornish–Fisher expected shortfall (CFES) at the same confidence level, which acts as a counter methodology for CFVaR.

The paper provides empirical insights about the Cornish-Fisher (CF) expansion being a method that incorporates the possibility of financial instability. When CFVaR by ESAs is calculated, it is shown that CF is in general a more robust risk model than the simpler historical ones. However, when CFES is applied, important points are derived. First, only in half of the occasions the CF expansion can be considered as a reliable method. Second, the CFES is a more coherent risk measure than CFVaR. We conclude that the CF expansion is unable to accurately estimate the market risk of UL products when excessive fat-tailed or non-symmetrical distributions are present. Hence, we suggest that a different methodology could also be considered by the regulatory bodies which will capture the excessive values of products in financial distress.

Literature, both theoretical and applied, regarding PRIIPs, is not extended. Although business and regulators research has begun to intensify in the last two years, to our knowledge this is one of the first studies that uses the CFES methodology for market risk assessment of Category II PRIIPs. In addition, we use a unique data set from a country in the headwinds of the recent financial crisis. This research contributes both to the academic and business community by enriching the existing literature and aiding risk managers in assessing the market risk of certain Category II PRIIPs. Considering the recent efforts of the regulatory authorities at the beginning of 2020 to implement certain amendments to the PRIIPs, we indicate relative risks related with the calculation of the market risk of the aforementioned products. Our findings could contribute to regulatory authorities’ persistent efforts in wrapping up this ongoing project.

The optimization of investment portfolios is a topic of major importance in financial decision making, with many relevant models available in the relevant literature. The purpose of this paper is to perform a thorough comparative assessment of different bi-objective models as well as multi-objective one, in terms of the performance and robustness of the whole set of Pareto optimal portfolios.

In this study, three bi-objective models are considered (mean-variance (MV), mean absolute deviation, conditional value-at-risk (CVaR)), as well as a multi-objective model. An extensive comparison is performed using data from the Standard and Poor’s 500 index, over the period 2005–2016, through a rolling-window testing scheme. The results are analyzed using novel performance indicators representing the deviations between historical (estimated) efficient frontiers, actual out-of-sample efficient frontiers and realized out-of-sample portfolio results.

The obtained results indicate that the well-known MV model provides quite robust results compared to other bi-objective optimization models. On the other hand, the CVaR model appears to be the least robust model. The multi-objective approach offers results which are well balanced and quite competitive against simpler bi-objective models, in terms of out-of-sample performance.

This is the first comparative study of portfolio optimization models that examines the performance of the whole set of efficient portfolios, proposing analytical ways to assess their stability and robustness over time. Moreover, an extensive out-of-sample testing of a multi-objective portfolio optimization model is performed, through a rolling-window scheme, in contrast static results in prior works. The insights derived from the obtained results could be used to design improved and more robust portfolio optimization models, focusing on a multi-objective setting.

Adverse childhood experiences (ACEs) are highly prevalent in people with developmental disorders who engage in offending behaviour. Many violence-based risk assessment tools include items pertaining to ACEs, and may inflate risk scores in trauma-exposed groups. This paper aims to explore the relationships between ACEs, risk assessment scores, incidents of risk and restrictive practices, in adolescents with developmental disorders in a forensic inpatient setting.

Secondary analysis was conducted on clinical data for 34 adolescents detained to a developmental disorder service. Data were extracted for Structured Assessment of Violence Risk in Youth (SAVRY) risk scores and risk behaviours and restrictive practices, as measures of observed risk.

Participants exposed to more ACEs had higher SAVRY risk scores (p < 0.001, two-tailed), with elevations specifically on the historical subscale (p < 0.001, two-tailed). Neither ACEs nor risk scores were associated with the frequency of risk behaviours. Nevertheless, participants exposed to four or more ACEs were secluded more frequently (p = 0.015, two-tailed), indicating a potential association between trauma and risk severity. Those with more complex developmental disorders experienced fewer ACEs (p = 0.02, two-tailed) and engaged in self-harm behaviours less frequently (p = 0.04, two-tailed).

The inclusion of ACEs in risk assessment tools may lead to the inadvertent stigmatization of trauma-exposed individuals. Further investigation is necessary to offer clarity on the impact of early adversity on risk assessment accuracy and levels of institutional risk, and the role of developmental disorders in this relationship.

To the best of the authors’ knowledge, this study is the first to explore the relative associations between ACEs, risk assessment scores and observed institutional risk and does so in a highly marginalized population.