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The purpose of this paper is to examine whether auditors interpret the risk of material misstatement (RMM) in accordance with current standards' definition of inherent risk (IR). It is argued that controls should not be presumed when assessing inherent risk and that inherent risk should be considered separate from and prior to control risk when it is practical to do so. Because auditing standards explicitly require auditors to assess IR without consideration of internal controls (i.e. control risk (CR)), RMM should not be adjusted upward for control deficiencies.

The authors survey and interview practicing auditors to gain an understanding of current risk assessment practice. They then evaluate whether their understanding of risk assessment is in line with current standards.

Contrary to auditing standards' definition of inherent risk, it appears that auditors presume some level of expected control effectiveness when assessing IR and they may increase RMM in response to internal control deficiencies. Such a presumption is inconsistent with the definition of inherent risk from the Auditing Standards Board (SAS No. 107), Public Company Accounting Oversight Board (AS 8), and International Auditing and Assurance Standards Board (ISA 200). Such misinterpretation may be an inadvertent result of guidance provided by standard setters in the form of SAS No. 109 from the ASB, AS 12 from the PCAOB and ISA 315 from the IAASB, which suggest combining IR and CR into RMM.

The research is limited both by the small sample size and the small number of risk factors investigated.

If auditors presume a level of controls in assessing inherent risk, they may reduce audit effectiveness by estimating a lower RMM than is appropriate.

This study presents insights on the interpretation and assessment of audit risk in audit environments where inherent risk is no longer automatically set to be at the maximum. Namely that due to the definition of inherent risk, control information should have a unidirectional downward effect on the risk of material misstatement.

This paper aims to adapt Simons’ (1995b) theory of the role of information technology (IT) in shaping and facilitating the levers of control (i.e. the Levers of Control Applied to Information Technology – LOCaIT) as a framework for investigating how eBay’s business strategy was realized through its management control system (MCS) in the first 10 years of the online auction market.

The qualitative method uses data from public record interviews, teaching cases, books, Securities and Exchange Commission filings and other archival sources to longitudinally trace the realization of eBay’s strategy through its MCS and IT.

Realizing its strategy through the eBay MCS necessitated a diagnostic control system unlike any previously seen. This system created a close-knit online community and enabled buyers and sellers to monitor one another’s performance and trustworthiness.

The LOCaIT theory facilitated understanding the core aspects of the realization of eBay’s strategy through its MCS and IT. However, LOCaIT largely omits the strong linkages evident among elements of the MCS, the importance and necessity of building a core IT infrastructure to support eBay’s strategy and the central role of building consumer trust in the realization of this strategy.

eBay’s MCS is now, perhaps, the world’s most widely imitated model for creating online trust and user interactions (e.g. Yelp, TripAdvisor, Amazon). In addition, eBay’s MCS was “sold” as a consumer product that was instrumental in facilitating consumer trust in the online auction market.

Contributions include: tracing the creation, growth and evolution of, perhaps, the world’s largest and most widely imitated MCS, which redefined the boundaries of accounting systems monitoring; and testing the range, usefulness and limitations of Simons’ LOCaIT theory as a lens for understanding eBay’s use of IT in their MCS.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

This project presents an opportunity for high school social studies teachers to infuse content on the federal budget, national debt, and budget deficit into civics-courses. The federal budget influences countries’ decisions about domestic and foreign policy, making the study of the topic a necessity for understanding economic interdependence, as well as active and engaged citizenship. The national debt plays an important role in efforts to balance competing interests concerning taxes, entitlement programs, and government spending. Social studies teachers have the opportunity to create connections between economic and public policies about the federal budget, national debt, budget deficit, and the content commonly taught in high school civics classes across the United States. Our two-day lesson, Examining the role of citizens in the U.S. budgetary process: A case study, can be infused into the civics curriculum to help high school students begin to understand the federal budget, national debt, and budget deficit. We model an inquiry-oriented approach for citizen participation about these topics in high school civics classes.

Health care delivery is experiencing a multi-faceted epidemic of suffering among patients and care providers. Compassion is defined as noticing, feeling and responding to suffering. However, compassion is typically seen as an individual rather than a more systemic response to suffering and cannot match the scale of the problem as a result. The authors develop a model of a compassion system and details its antecedents (leader behaviors and a compassionate human resource (HR) bundle), its climate or the extent that the organization values, supports and rewards expression of compassion and the behaviors and practices through which it is enacted (standardization and customization) and its effects on efficiently reducing suffering and delivering high quality care.

This paper uses a conceptual approach that synthesizes the literature in health services, HR management, organizational behavior and service operations to develop a new conceptual model.

The paper makes three key contributions. First, the authors theorize the central importance of compassion and a collective commitment to compassion (compassion system) to reducing pervasive patient and care provider suffering in health care. Second, the authors develop a model of an organizational compassion system that details its antecedents of leader behaviors and values as well as a compassionate HR bundle. Third, the authors theorize how compassion climate enhances collective employee well-being and increases standardization and customization behaviors that reduce suffering through more efficient and higher quality care, respectively.

This paper develops a novel model of how health care organizations can simultaneously achieve efficiency and quality through a compassion system. Specific leader behaviors and practices that enable compassion climate and the processes through which it achieves efficiency and quality are detailed. Future directions for how other service organizations can replicate a compassion system are discussed.

This qualitative narrative review aims to identify and evaluate the potential, challenges and pitfalls of pay-for-performance (P4P) schemes for the home care of adults with a disability. Due to a limited experimentation with P4P schemes in the context of the home and disability care sectors, the authors conducted a narrative review focusing on related areas of care, primarily nursing home care, to better understand the effectiveness of P4P schemes as a care intervention and evaluate the challenges associated with the introduction of these schemes.

The authors employed a narrative review approach to examine the effectiveness of P4P schemes as a care intervention. The approach included a manual content analysis of the relevant academic and grey literature, focusing on the potential, challenges and pitfalls of P4P for care funders and providers.

There is some, albeit limited, evidence from other related areas of care to support the effectiveness of P4P to improve the quality of care or the efficiency of its delivery for the home care sector. The results of prior studies are, however, often mixed and inconclusive, due to flaws with the design of schemes, including the nature of the incentives. Limited duration and poor-quality evaluations have further hampered the ability of studies to demonstrate the effectiveness of P4P schemes, which diminishes the credibility of these care interventions. When undertaken systematically, there seems to be some evidence that P4P can work; however, it requires careful design, implementation, measurement and evaluation.

Based on the challenges associated with the successful implementation of P4P schemes, the authors identified lessons for the design, implementation, measurement and evaluation of P4P schemes for care funders and policymakers.

This study critically evaluates the potential of P4P as a care intervention for the home care and disability sectors. By evaluating the potential, challenges and pitfalls associated with P4P in related areas of care, the study provides guidance to home care funders, providers and policymakers in care settings.

Policy makers and practitioners argue that electronic exchange of clinical data across the healthcare system is a key component of improving health service delivery in the United States. Provider administrators, however, question the strategic value of participation in health information exchanges (HIEs) and remain reluctant to participate. Existing research fails to adequately illuminate the potential value derived from HIEs by participating organizations. This paper addresses this gap by developing a conceptual model informed by the complementary theoretical perspectives of the relational view and systems theory to specify both a provider organizationʼs internal conditions and the HIE structure necessary for both financial accrual and quality improvement. This two-sided model can assist policymakers as they attempt to encourage HIE development, as well as provider and HIE leadership that seek to benefit from HIEs. The propositions developed from this model can also help guide researchers as they evaluate the impact of HIEs.

Government reforms have seen shifts from rules-based to principles-based risk regulatory governance. This paper examines the effects of principles-based risk regulatory reforms on public sector risk management (RM) and management control practices in public sector organizations (PSOs).

The principles-based regulation focuses on providing autonomy to PSOs while maintaining control over their actions without direct intervention. This resonates with Foucault's notion of how modern forms of governments operate. The research is informed by Foucault's concept of governmentality. The authors conducted a qualitative field study of an Australian PSO, gathering and analysing data from interviews, focus groups, and archival documents.

The findings show the capillary modes by which principles-based risk regulatory regime penetrates and works with management control practices in pursuit of regulatory goals within the PSO the authors studied. In addition, the authors find that the principles-based approach (focusing on autonomy) and rules-based approach (focusing on control) are not opposites in kind and effect but rather, autonomy should be understood as a central pillar of control. Furthermore, the findings show how cultural controls and formal controls are not in conflict but are interconnected in RM practices, with cultural controls providing control architecture for RM and formal control translating the control architecture into routines. Finally, the study provides insights into how enterprise risk management (ERM) provides capabilities for and routinizes RM practices in a PSO and the management control systems (MCS) that enabled this to occur.

The paper provides novel insights into how MCS are infiltrated, mobilized and deployed to enact principles-based risk regulatory reforms. These insights are useful for regulators, practitioners and researchers.

Promoted for its inclusivity, agricultural value chain (AVC) financing leverages social capital and mechanisms such as off-take agreements and forward contracts to reduce borrowing and lending costs and risks for both farmers and lending institutions. AVC financing has been defined as the flow of financial products and services to and among the various actors within the AVC to address constraints of production and distribution and fulfill the needs of those involved in the chain by reducing risk and improving efficiency. This paper investigates how farmers' involvement in AVC affects their access to credit.

The authors collected primary data from 400 crop farmers in northern Ghana through a semi-structured questionnaire and analyzed the data, using the multinomial endogenous switching regression model.

Joint participation in AVC increased the amount of formal and informal credit received by 64 and 78%, respectively, compared to nonparticipation. Similarly, participation in AVC horizontal linkage and AVC vertical linkage increased the amount of formal and informal credit received by 40 and 47% and 46 and 74%, respectively, compared to nonparticipation. Irrigation farming, extension visits, knowledge of AVC in the community, access to a storage facility and trust in contract farming significantly influenced farmers' participation in AVC.

The authors’ work offers valuable insights into how different dimensions of value chain participation can impact smallholder farmers' access to credit. This work also underscores the importance of considering both formal and informal credit sources when analyzing the outcomes of value chain participation. The findings could enable formal financial providers to identify, liaise and/or resource informal financial players such as value chain actors to supply both formal and informal credit to farmers in AVCs.

The fear of receiving a bid protest is said to affect acquisition strategies, yet it has not been empirically explored. Based on the Public Value Framework and interviews with contracting personnel, this research tests a model of antecedents to and consequences of the fear of a protest. Survey data was obtained from a sample of 350 contracting personnel. The fear of protest is mitigated by having sufficient procurement lead time and by source selection experience, and increased by protest risk. Fear of protest increases compromised technical evaluations, added procurement lead time, and transaction costs, while it decreases contracting officer authority and is associated with source selection method inappropriateness. Compromised technical evaluations, in turn, decrease contractor performance while contracting officer authority increases contractor performance. Thus, findings suggest that, indeed, the tail is wagging the dog. The research concludes with several managerial implications, study limitations and future research directions.