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The objective of this paper is to offer a validated framework for the analysis of (future) risks and uncertainties involved in the decision‐making process concerning the upgrade and roll‐out of large infrastructural projects, e.g. broadband networks. The framework classifies risks and uncertainties based on the nature of the risks, levels and sources.

The approach takes the form of conceptual as well as qualitative and quantitative empirical analyses.

Telecommunications operators are faced with various types of risks and uncertainties in their decision‐making process concerning the upgrade and roll‐out of their broadband networks. In one respect, these risks and uncertainties have to do with the characteristics of large infrastructural projects, while, on the other hand, being caused by (unknown) competitor behaviour, (unknown) end‐user demand, rapid technological development and different development paths available to operators. Framing risks and uncertainties into a typology provides greater insight into the categories, characteristics and sources of the risks and uncertainties, as well as being a first step in finding ways to deal with them.

The paper presents and validates a framework for the analysis of risks and uncertainty. It also offers empirical data on how operators manage risk and uncertainties.

This study aims to explore whether an auditee’s audit quality influences its payout policies (i.e. each form of dividend payouts and stock repurchase payouts).

Based on a panel data of US public firms, from 2004 to 2018, and Tobit estimators, this study aims to examine whether auditees’ audit quality is related to their payouts and under which circumstances (from the standpoints of auditees’ information asymmetry, refinancing risk, corporate governance and financial constraints) the aforesaid associations are more pronounced.

The findings of this study imply that auditees’ audit quality is positively related to auditees’ payouts. Further examination suggests that this positive relationship is stronger for auditees with higher information asymmetry, lower financial constraints and refinancing risk and for those with weaker governance. Finally, this study documents that dividend payouts are more stable for auditees with high-quality audits than those with low-quality audits. The results support the view that auditees’ transparency (reflected in high-quality audits) could be a crucial driver and rationale for their payout policies and, ultimately, overall policies.

By combining two different research lines of audit quality and corporate payout policies, this paper adds to both literature, as it is a novel one to document the contributing function and impact of audit quality on auditee’s payout policies (tangible financial decisions and policies). The findings are significant considering that it documents high-quality audits affecting the auditees besides their financial reporting quality. This study also shows the moderating roles of the auditee’s information asymmetry, rollover risk, financial constraints and corporate governance in the relation between audit quality and an auditee’s payout decisions. Furthermore, the findings can help shareholders (aiding them in determining companies with high payout policies), regulators and policymakers who emphasize audit quality. The results indicate that policymakers’ and standard setters’ efforts fostering high-quality audits should be in conjunction with firm payout standards.

Public procurement in many countries is one of the most important factors in governance and is a priority target of reform. In many humanitarian situations however, service delivery cannot wait for procurement reform. The needs of many of the Millennium Development Goals are immediate, while procurement reform may take years to institutionalize. Under these circumstances, international organisations such as the United Nations have both implementation and capacity-building roles, often placing them in high-risk situations. This has led to the development of procurement risk assessment and management tools, designed to provide objectivity in country procurement risk monitoring and review, as well as assist capacity building. The procurement risk assessment methodology that follows uses established risk modeling to provide procurement risk ratings in 60 HIV/AIDS, Tuberculosis and Malaria programs in 26 countries, and is successfully promoting procurement strengthening within high-risk country offices.

The case is about an Indian company hedging soya oil price risk in the US futures market instead of in the Indian market to take advantage of better liquidity and wider choice of hedging instruments there. A stable long run relationship (cointegration) between the two markets appeared to make the cross border hedge viable, but hedge accounting considerations appeared to stand in the way.

The importance of sovereign bond as a source of financing revenue deficit, benchmarking for corporate bonds and debt management in Africa, calls for continual monitoring of its volatility dynamics. This study evaluates the nature of sovereign bond volatility interaction between African countries using bivariate BEKK-GARCH (1, 1) model. Based on a sample of eight African countries, the results show evidence of unidirectional volatility spillover from Morocco sovereign bond to Egypt sovereign bond. Next, the results show absence of volatility interaction between Ghana and Nigeria sovereign bonds. The results further show the existence of bidirectional volatility transmission between Uganda and Kenya. Finally, the results indicate evidence of bidirectional volatility interaction between Botswana and South Africa. Overall, the results show existence of full interaction between Uganda–Kenya and Botswana–South Africa sovereign bond returns, partial interaction between Egypt and Morocco sovereign bond returns and no interaction between Ghana and Nigeria sovereign bonds markets. Thus, these results provide valuable implications for sovereign and corporate credit risk management, as well as strategy for monitoring and minimising negative effect of sovereign bond volatility spillover in Africa.

We reviewed the fiscal 2003 financial statement footnote disclosures of the fifty states and the 100 largest cities in the United States (US) to ascertain the nature and extent of derivative activities among US state and municipal governments. There were 23 state governments and 23 municipal governments that have engaged in such transactions with an aggregate notional value approaching $32 billion. These governments enter into these transactions primarily to hedge the interest rate and cash flow risks associated with their long term variable rate demand obligations and auction rate debt. Our findings also indicate that the widespread implementation of GASB TB 2003 - 1 has improved the quality of state and municipal disclosures with respect to their derivative activities. In June 2008, the GASB issued its Statement 53 which mandates the accounting measurement of these derivative financial instruments at their fair value on the statement of net assets and promises to further improve their footnote disclosure.

Railway transport maintenance plays an important role in delivering safe, reliable and competitive transport services. An appropriate maintenance strategy not only reduces the assets’ lifecycle cost, but also will ensure high standards of safety and comfort for rail passengers and workers. In recent years, the majority of studies have been focused on the application of risk-based tools and techniques to maintenance decision making of railway infrastructure assets (such as tracks, bridges, etc.). The purpose of this paper is to present a risk-based modeling approach for the inspection and maintenance optimization of railway rolling stock components.

All the “potential failure modes and root causes” related to rolling stock systems are identified from an extensive literature review followed by an expert’s panel assessment. The failure causes are categorized into six groups of electrical faults, structural damages, functional failures, degradation, human errors and natural (external) hazards. Stochastic models are then proposed to estimate the likelihood (probability) of occurrence of a failure in the rolling stock system. The consequences of failures are also modeled by an “inflated cost function” that involves safety-related costs, corrective maintenance and renewal (M&R) costs, the penalty charges due to train delays or service interruptions as well as the costs associated with loss of reputation (or loss of fares) in the case of trip cancellation. Lastly, a time-varying risk-cost function is formulated to determine the optimal frequency of preventive inspection and maintenance actions for rolling stock components.

For the purpose of clearly illustrating the proposed risk-based inspection and maintenance modeling methodology, a case study of the Class 380 train’s pantograph system from a Scottish train operating company is provided. The results indicate that the proposed model has a substantial potential to reduce the M&R costs while ensuring a higher level of safety and service quality compared to the currently used inspection methodologies.

The railway rolling stocks should be regularly inspected and maintained so as to ensure network availability and reliability, passenger safety and comfort, and operations efficiency. Despite the best efforts of the maintenance staff, it is reported that a considerable amount of maintenance resources (e.g. budget, time, manpower) is wasted due to insufficiency or inefficiency of current periodic M&R interventions. The model presented in this paper helps the maintenance engineers to assess the current maintenance practices and propose or initiate improvement actions when needed.

There are few studies investigating the application of risk-based tools and techniques to inspection and maintenance decision making of railway rolling stock components. This paper presents a modeling approach aimed at planning the preventive repair and maintenance interventions for rolling stock components based on risk measures. The author’s model is also capable of incorporating real measurement information gathered at each inspection epoch to update future inspection plans.

AFTER cutting oils, rolling oils probably constitute the next largest overall offtake of metalworking oils although the proportions for any individual supplier may be very different, since much of the business is in the hands of specialists and some of the largest companies may do little.

This paper aims to investigate the use of the bias ratio as a possible early indicator of financial fraud – specifically in the reporting of hedge fund returns. In the wake of the 2008-2009 financial crisis, numerous hedge funds were liquidated and several cases of financial fraud exposed.

Risk-adjusted return metrics such as the Sharpe ratio and Value at Risk were used to raise suspicion for fraud. These metrics, however, assume distributional normality and thus have had limited success with hedge fund returns (a characteristic of which is highly skewed, non-normal return distributions).

Results indicate that potential fraud would have been detected in the early stages of the scheme’s life. Having demonstrated the credibility of the bias ratio, it was then applied to several indices and (anonymous) South African hedge funds. The results were used to demonstrate the ratio’s scope and robustness and draw attention to other metrics which could be used in conjunction with it. Results from these multiple sources could be used to justify further investigation.

The traditional metrics for performance evaluation (such as the Sharpe ratio), assume distributional normality and thus have had limited success with hedge fund returns (a characteristic of which is highly skewed, non-normal return distributions). The bias ratio, which does not rely on normally distributed returns, was applied to a known fraud case (Madoff’s Ponzi scheme).

The effectiveness of the bias ratio in demonstrating potential suspicious financial activity has been demonstrated.

The financial market has come under heightened scrutiny in the past decade (2005 – 2015) as a result of the fragile and uncertain economic milieu that still (2015) persists. Numerous risk and return measures have been used to evaluate hedge funds’ risk-adjusted performance, but many fail to account for non-normal return distributions exhibited by hedge funds. The bias ratio, however, has been demonstrated to effectively flag potentially fraudulent funds.