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This paper aims to investigate whether the Sarbanes-Oxley Act: Section 404(b) exemption caused an increase in auditor changes due to changes in expectations for both auditors and their clients.

This paper predicts that this exemption caused a significant amount of auditor changes post-exemption, due to a change in expected future economic rents (audit scope demands) for auditors (clients). Logistic regression analysis is used to examine whether auditor changes increased for non-accelerated filers (public companies with less than $75 million in public float), who were affected by this exemption, compared to auditor changes for accelerated filers (public companies with greater than $75 million in public float), who were not affected by this exemption.

The results show a significant positive association between the exemption and auditor dismissals for non-accelerated filers compared to that of accelerated filers. This finding is robust when sensitivity tests are used.

Prior literature finds that an increase in auditor changes can have various positive and negative effects on the affected companies. Thus, investors will be interested in the results of this paper when making their investment decisions with regard to non-accelerated filers.

The results of this paper will aid policymakers as they consider the pros and cons of this exemption, as it pertains to the affected companies.

This paper is the first to study the effects of this exemption on auditor turnover for the affected companies.

This paper aims to investigate the effect that ownership structure (public vs private) has on the demand for high-quality auditors, specifically in the US banking industry.

The authors predict that public banks are more likely to hire a high-quality auditor than private banks and pay a higher audit fee premium for that high-quality auditor (due to higher agency costs, more demand for financial information and higher litigation risk). The authors analyze 2008–2014 banking data from the Federal Reserve using probit and OLS regression analysis to examine if there is a higher probability that public banks choose higher quality auditors and pay higher audit fees when they do so.

The results show that private banks are less likely to hire Big 4 auditors and industry-expert auditors than public banks. The authors also find that both private and public banks pay higher audit fees for Big 4 and industry-expert auditors, and that public banks pay a higher premium for Big 4 auditors and industry experts than private banks.

The findings may not be fully generalizable to other types of firms, as banking is a heavily regulated and complex industry. However, inferences from this study may be generalizable to other similar industries such as insurance or health care.

The results of this paper imply that public and private banks have differing priorities when hiring their financial statement auditor. This may be of interest to investors and auditing regulators.

The findings of this paper underscore the value of hiring an industry-expert auditor in an industry that is highly complex and regulated. This may be of interest to managers and policymakers.

Due to data restrictions, the emphasis of prior literature on the banking industry has been on public banks. This study is the first to analyze the differences between public and private banks’ demand for audit services.

This paper aims to investigate whether the expected implementation of Section 404(b) of the Sarbanes-Oxley Act (SOX 404(b)) (the integrated audit requirement) caused auditors to discount their audit fees for non-accelerated filers in anticipation of expected increased future economic rents (DeAngelo, 1981) from those clients.

This paper predicts that auditors charged their non-accelerated filer clients lower audit fees during the years 2005-2007 (in anticipation of increased expected future economic rents from the implementation of the SOX 404(b) requirement) compared with the years 2010-2012 (when it had been determined that non-accelerated filers were permanently exempt from complying with SOX 404(b)). The authors use ordinary least squares regression analysis to examine whether audit fees increased significantly for non-accelerated filers after the permanent exemption announcement.

The results show a significant positive association between the exemption announcement and audit fees, supporting the theory that auditors discounted their audit fees for non-accelerated filers in the pre-exemption announcement period. This finding is robust when sensitivity tests are used.

The findings of audit fee discounting literature related to the post-SOX period are mixed. This study adds to this stream of literature by supporting the notion that audit fee discounting is being practiced post-SOX and is a potential unintended consequence of SOX 404 and the exemption. Thus, investors will be interested in the results of this paper when making their investment decisions with regard to non-accelerated filers.

The results of this paper show that, even in the post-SOX environment, auditors will employ the use of audit fee discounting if a change in regulation incentivizes it. This commentary on the present state of the audit pricing market should be of interest to audit pricing policymakers.

This paper is one of the first to study audit fee discounting outside the realm of initial audit engagements.

In the 1967 film, The Graduate, Mr. Robinson gave Dust in Hoffman's character, Benjamin, the scene‐stealing career suggestion, “plastics!” Although Benjamin appeared indifferent to the oracle‐like advice, thousands of other graduates have since helped to make plastics, or polymers, a popular career choice. Today, the U.S. polymer‐based industries (plastics, rubber, fibers, paints, films, membranes, coatings, and adhesives) employ more than a million workers and need 10,000 new graduates yearly to support their growth. Yet, despite the emphasis industry and government place on formal training in polymer science and engineering (hereafter called PSE), academia has given the rapidly developing field a cool reception. Science writer Joseph Alper notes:

The goal of this study is to provide guidance to managers who must make decisions regarding the adoption of technological innovations. The study was conducted within the context of the hospital industry. Results indicate that while adoption of technological innovations may lead to increased performance for certain hospitals, for large hospitals, and those located in rich environments, medical technology may be a ‘no‐win’ situation. Failure to adopt technology may result in the loss of patients, but adoption may result in increased costs that cannot be recovered due to underutilization.

Purpose – To provide classroom teachers with an understanding of how children’s errors in reading provide evidence of sources of information that children draw upon to solve problems and monitor their reading.Design/methodology/approach – This chapter provides a theoretical discussion of sources of information found in text and their use during reading followed by examples from two case study children.Findings – One of the case study children primarily relies on meaning and syntax and ignores visual/print information. The other case study child relies primarily on visual/print information and ignores meaning and syntax.Research limitations/implications – Only two case study children are examined and only at the very beginning stages of reading in first grade.Practical implications – The decisions made by the teacher used in the examples provide valuable suggestions for classroom teachers who have a range of different readers in their classrooms.Originality/value of chapter – Teachers need information about how to shape children’s reading behaviors as they read text, solve problems during reading, and monitor their attempts.

It has been generally assumed that, although there may be material costs to the entire world which result from any attempt to eliminate global poverty through development, the only costs associated with the continued existence of poverty are human ones, costs which are borne primarily by the poor themselves. This article is a review of the literature on development and resource use; its primary purpose is to investigate the extent to which analysts have tested this assumption—that is, the extent to which they have addressed the issue of the material costs engendered by the perpetuation of global poverty. Its conclusion is that no systematic analysis of this assumption has been conducted. However, there is a recognition of the resource costs of global poverty implicit in much of the literature on development and on resource use, and there is sufficient evidence to indicate that more detailed study of the relationship is warranted, since it is clear that the continued acceptance of global poverty entails significant costs for every member of the global community.

Many scholars have noted that, since at least 1790, U.K. economic fluctuations have seemed to reach major peaks every 7–10 years. Keynes (1936, ch.18) used the elements of his theory to explain non‐periodic economic fluctuations. His explanation of periodic fluctuations, i.e. cycles, appears in Chapter 22 of the General Theory. As is well known, he believed that fluctuations in “animal spirits” (that were often only loosely connected with the cost and the real rate of return on capital) led to oscillations in investment which, combined with the durability of capital goods, caused the duration of modern major cycles; fluctuations in liquidity preference and the propensity to consume played lesser roles. Bowing to Jevons (1964), Keynes also noted that unstable agricultural inventories could have been a source of waves in the early 19th Century when agriculture was relatively more important in the U.K. But Keynes did not demonstrate just how his investment theory implied a definite cycle period, because he did not merge his multiplier with the accelerator principle to provide an endogenous explanation of periodic turning points in output. Consequently, as Hicks (1950, p. l) notes, Keynes did not demonstrate how investment and income could peak every 7–10 years; his was really a theory of nonperiodic waves.

Artists operating under a studio model, such as Andy Warhol, have frequently been described as reducing their work to statements of authorship, indicated by the signature finally affixed to the work. By contrast, luxury goods manufacturers decry as inauthentic and counterfeit the handbags produced during off-shift hours using the same materials and craftsmanship as the authorized goods produced hours earlier. The distinction between authentic and inauthentic often turns on nothing more than a statement of authorship. Intellectual property law purports to value such statements of authenticity, but no statement has value unless it is accepted as valid by its audience, a determination that depends on shared notions of what authenticity means as well as a common understanding of what authenticity designates.