Search results

The purpose of this paper is to describe, illustrate and provide a deeper understanding of team composition and labor allocation in audit teams by quantifying the exact value of resources at different levels of the audit production. Audit teams have been considered as a black box in audit research. Therefore, this paper reports descriptive statistics on (levels and proportions of) hours and costs allocated to auditor ranks (and the number and value, i.e. billing rates, of auditors for different ranks and the entire team) to shed new light on audit teams.

This study uses a proprietary data set containing disaggregated information on hours, costs and billing rates for each team member in each of 908 audit engagements. The data are provided by a Swedish Big 4 audit firm. The study uses a purely descriptive approach and categorizes auditors into seven ranks. As size and the publicly listed status are crucial determinants of audit production, the paper splits engagements in public and private companies and reports statistics for size quartiles of both public and private clients.

The paper provides descriptive statistics for (1) client size, (2) audit team members, (3) audit hours, (4) audit costs, (5) proportion of audit hours, (6) proportion of audit costs, (7) billing rates and (8) variation of billing rates. Results show that compared to private clients, the audit firm allocates higher effort from auditors in higher ranks and lower effort from auditors in lower ranks to public clients. Another finding is that allocation varies with client size for private clients, but less so for public clients.

In an area with sparse literature, this descriptive study serves as a first step to improve our understanding and guide future research. It provides concrete support for previously known theory.

Notes that, in the UK, there has been little empirical research undertaken to consider the effect of the commercial property tax (more commonly known as non‐domestic rates) on the level of openly negotiated market rents. Seeks, through the analysis of a large set of panel data obtained from the Investment Property Databank and the Valuation Office Agency, to develop econometric models which can measure the effect that an increase in non‐domestic rates has on commercial rents and ultimately the effective incidence of non‐domestic rates. Draws a number of conclusions, the most significant being that changes in rates bills prompt changes in commercial property rents in the opposite direction. Notes that this conclusion may, in the longer term, have an effect on the type and indeed the timing of government assistance to business occupiers through transitional relief schemes.

Small businesses file taxes in accordance with the personal income tax code because they are considered flow-through entities. Thus, personal income tax reforms directly affect the incentives small business owners face regarding employment and operations. The paper aims to discuss these issues.

The authors use the changes in personal income tax rates during the 1993 and 2001-2003 reforms and micro-level data to estimate the effect of statutory tax rate changes on small business employment decisions.

The authors add two contributions to the current literature: first, the author allow for intertemporal tax planning and second, the author allow the firm’s decision to employ labor to be correlated with the firm’s wage bill decision. Estimation of a Heckman selection model for wage bills shows that the probability that a business will employ labor is 1.18 percent higher when current tax rates increase by one percentage point and 0.70 percent lower when future rates are expected to increase by one percentage point. Among firms that already employ labor, the median wage bill elasticity with respect to current tax rates is −0.64. These estimates are larger than those reported in previous research because my model includes future taxes and allows for correlation between the firm’s employment and wage bill decisions. Omitting the intertemporal tax responses biases the estimates of previous researchers upwards, whereas assuming the two firm decisions are independent biases estimates towards zero.

This paper has been cited in publications published in Journal of Entrepreneurship and Public Policy.

The purpose of this paper is to empirically analyze the transmission mechanism between benchmark interest rate of financial market, money market interest rate and capital market yields in order to reveal the dynamic evolution characters and core influential structure between different market interest rates.

Using Dirichlet-VAR (DVAR) model, this study analyze the relationship between markets rates according to the equilibrium model in money market and capital market.

Empirical results show that the interest rate transmission mechanism functions smoothly between interest rates of different levels. Interest rate of bills issued by the central bank can effectively reflect changes in monetary policy and guide the fluidity of market, playing the anchor role in interest rate pricing. There exists a closed loop feedback between interest rate of bills issued by the central bank, and money market interest rate, as well as between money market interest rate and bond market interest rate. The former is a loop by administrative means while the latter is the one mainly affected by market-oriented means. The response by money market and bond market toward the change of benchmark interest rate is unsymmetrical as money market is more sensitive to a loose monetary policy while bond market is more sensitive to a tight monetary policy. Stock market is strongly affected by uncertainty of benchmark interest rate.

DVAR model is the extension of research on instable data and multiple variable causality test, which expands the causality analysis between two variables to multiple variables causality impact analysis which contains non-stable and structurally instable economic data.

No issue concerning the Bank Rate could effectively be discussed without constant reference to the complex institutional framework within which it operates. How complex it is can be gauged by the fact that its detailed description in the Report of the Royal Commission on the Working of the Monetary System covers over three hundred closely printed pages. In this paper I will concentrate on the essentials and bring in the background only to the extent to which it is absolutely necessary for presenting the problems in proper perspective.

The purpose of the study is to test how land owners respond to the appreciation of land values in the presence of speculation. This paper introduces the concept of “land hoarding,” which is land owners' response to higher land prices by selling more land up to a point beyond which accelerated land price appreciation would lead to land hoarding. Specifically, this paper examines the effect of land value appreciation higher than the opportunity cost of selling the land (measured by treasury‐bill (T‐bill) rate) on land sale and land hoarding.

A theoretical framework is developed to understand the demand for agricultural land retention with and without speculation, the former informing land hoarding behavior. A linear regression model was introduced and estimated using ordinary least square (OLS) method. A panel data model and analysis is also introduced, and following appropriate model selection tests, a fixed effect panel data estimation method is implemented. Data from 48 states, spanning from 1950 to 2004, are utilized.

An inverse relationship is found between the rate of land value appreciation and the demand for land by farmers, suggesting that the standard direct relationship between appreciation and land supplied to development holds. However, the additional finding of an inverse relationship between the rate of land value appreciation in excess of the risk‐free rate of return and agricultural land development confirms the existence of an identifiable speculative demand component that involves land hoarding.

To the extent to which the findings are broadly applicable, one policy implication is that enhanced land retention can be achieved through market mechanisms. For example, the notion that reduced T‐bill rates can actually result in market triggered land preservation is an interesting policy related finding. Equally interesting is the notion that policies that can trigger increases in the rate of appreciation of farmland may also potentially result in the agricultural hoarding of land. Obviously, enhanced profitability in agriculture due to programs targeting viability, commodity price support, reduction of regulation or market expansion programs can potentially affect land retention.

This paper introduces the “land hoarding hypothesis.” High rates of land appreciation can be expected to signal that holding the land may yield better returns than selling it, suggesting that if rates of land appreciation become significantly high enough, farmers may begin to hoard land, not sell it, to maximize long‐term returns. This concept can be valuable to market‐based agricultural land retention programs at the urban fringe. By linking speculative behavior, land demand and existence of a hoarding behavior under some conditions, this paper adds value and originality to the literature.

This paper examines the sluggish adjustment of deposit interest rate categories with response to policy rate changes in a developing economy.

Symmetric and asymmetric error correction models (ECMs) are employed to test the pass-through effect and adjustment speed of deposit rates when above or below their equilibrium levels.

The findings reveal an incomplete pass-through effect in both the short run and long run while mixed results of symmetric and asymmetric adjustment speed across the different deposit rate categories are observed. Collusive pricing arrangement behavior is supported by deposit rate categories that adjust more rigidly upwards than downwards, while negative customer reaction behavior is supported by deposit rate categories that adjust more rigidly downwards than upwards.

Even though the findings indicate an aspect of increased responsiveness over the period, the sluggish adjustment of deposit rates imply that monetary policy is still ineffective and not uniform across the different deposit rate categories.

To the best of the authors' knowledge, this is the first study to empirically examine both symmetric and asymmetric adjustment behavior of deposit interest rate categories in Kenya. The findings are key to policy makers as they provide insights on how long it takes to adjust different deposit rate categories to monetary policy decisions. In addition, the behavior of deposit rates partly explains why interest rates capping was imposed in Kenya in 2016.

Health‐care associated infections (HAIs) kill about 100,000 people annually; many are preventable. In response, 18 states currently require hospitals to publicly report their infection rates and national reporting is planned. Yet there is limited evidence on the effects of public reporting on HAI rates, and none on what elements of a reporting plan affect its impact on HAI rates. The author aims to review here what little we know, emphasizing his own case study of Pennsylvania.

The paper contains a narrative description of empirical challenges in attributing changes in infection rates to the introduction of public reporting, and the author's own research findings from a case study of Pennsylvania using both infection rates estimated from administrative (billing) data (“inpatient rates”) and public reported rates.

Hospitals, faced with public HAI reporting, may respond both by reducing infection rates and through time‐inconsistent reporting (“gaming”). Both effects are likely to be stronger at hospitals with high reported rates, relative to peers. From 2003‐2008, Pennsylvania inpatient CLABSI rates dropped by 14 per cent, versus a 9 per cent increase in control states. The overall drop comes primarily from hospitals in the highest third of reported rates. Reported CLABSI rates fell much faster, by 40 per cent, from 2005 to 2007. This difference suggests time‐inconsistent reporting.

Much more research is needed before we can have confidence that public reporting affects HAI rates (and for which HAIs), or know how to design an effective reporting scheme. HAI reporting cannot yet be considered to be “evidence based.” National reporting mandates will foreclose the state experiments needed to address these questions.

What little we know about impact of public reporting on HAI rates comes in significant part from the case study of Pennsylvania described in this article.

The purpose of this paper is to investigate the use of the effective rate as a useful metric. Facilities management operations who function as re‐charge organizations (public or private, non‐profit or profit) are able to track performance and do comparisons for expense recovery while taking into account the organization's unique environment.

After providing a definition of the effective rate, some of the influences and the importance of measuring performance for facilities management operations are discussed. The remainder of the paper focuses on the findings based on a qualitative single case study that not only clarifies the use of the metric, but also confirms the usefulness for a service‐oriented organization to measure and track performance.

Taking into account the unique environment of each organization along with the differences for time not billed back to the customer (un‐billable), the effective rate is offered as a quantitative means to measure performance as it influences the organization's billing labor rates.

The single case study raises the issue of generalizability, but points out that much can be gained from the research. In the spirit of true qualitative research, the intent is to provide the findings allowing the reader to determine possible transferability where logic and reality is justifiable.

The effective rate, once normalized for the particular environment, can be used as a benchmark for both internal and external evaluations of performance for facilities management organizations.

The effective rate, whether actually calculated or not, influences the organization's finances through the billing labor rate in its attempt to recover costs and can serve as a performance tracking metric.

The purpose of this paper is to investigate the influence of the real interest rates, inflation and risk premium on the time deposit rates of banks in the dual banking system in Malaysia.

The data consists of 1-, 6- and 12-month average time deposit rates of conventional and Islamic banks over the period of January 2000 to June 2017. The cointegration methodologies are used to explore links between the time deposit rates, real rates, inflation and risk premium. The causality tests to test causality linkages between pairs of variables are also applied. The generalised forecast error variance decomposition based on the error correction model is conducted to analyse the impact of variables variation on the deposit rates.

The results show the presence of two cointegration vectors in the deposit rates, real rates, inflation and risk premium, for both conventional and Islamic bank rates. Causality tests reveal that deposit rates are caused by inflation and risk premium in a one-way causality. The results of variance decomposition highlight the importance of inflation and risk premium in explaining the variations in the bank deposit rates. For the conventional bank, inflation shocks play the most important role in explaining the movements of the deposit rates. In Islamic banks, the major determinant’s largest influence is the risk premium. Between the two bank rates, Islamic bank rates receive more influence from the explanatory variables in the long-run compared to conventional bank rates. The real rates have no noticeable effect on the variance of time deposit rates for both banks.

This study presents new evidence on the relationship between time deposit rates and the three explanatory variables, which are the real interest rates, inflation and risk premium, for both conventional and Islamic banks in Malaysia. The dual banking system allows exploring the similarities and differences between conventional and Islamic banks in Malaysia in terms of the linkages between the variables.