bluuebunny/crossref_metadata_2025 huggingface dataset:
How Biotechnology Regulation Separates Ethics from Risk
Authors: Carr Susan , Levidow Les
Published: July 2017

In the public debate about agricultural biotechnology, an important source of dispute has been the industry's stated aim of further industrializing agriculture. Critics and proponents have argued their case using the language of risk, which entails an implicit ethics, in response, regulators have tended to separate ‘risk ’ from ‘ethics ’, and assign judgements about each to specialists. This administrative separation encourages public deference to expert assessment. By treating implicit value judgements as merely technical matters, such regulation serves to legitimize the biotechnology R&D priorities and marginalize any broader public debate. Thus the official scope of ‘bioethics ’ is itself political.
Agriculture and Land Transformation. 2. Present Trends and Future Prospects
Authors: Mannion Antoinette M.
Published: July 2017

Today, agriculture remains a major agent of land transformation, the nature of which varies considerably between the developed and developing worlds. Of particular significance is the transformation of tropical forest lands into agricultural lands. This is causing extensive loss of biodiversity which means a loss of potential benefits in terms of ‘goods ’, and possibly the impairment of ecosystem services. The latter has implications for global climatic change. Such trends will continue beyond the millennium as world population is set to increase from 5.7 × 109 now to 8.3 × 109 in 2025. Part 1 of this series—Temporal and spatial dimensions — appeared in Volume 26 No. 2.
The Costs of Production in Systems Which Differ in Their Perceived Effects on Animal Welfare. 1. Eggs and Broilers
Authors: Hill John , Asby Carol , Sturgess Ian
Published: July 2017

This paper considers what animal welfare is and the importance of animal welfare to the consumer. It also considers how different production systems are perceived in terms of kindness to animals, and outlines a method of assessing the costs of animal welfare by analysing the costs of intensive egg and broiler production and comparing them with costs of free-range production by using data from the UK. The extra costs associated with free-range production are due to higher labour, feed, building and equipment costs.
Telemetric Data Collection for Monitoring, Control and Management of Animal Production. 2. The Applications of Electronic Monitoring
Authors: Geers Rony
Published: July 2017

Part. 1 of this contribution appeared in Outlook on Agriculture 26, No. 2. In this part the potential practical applications of the technology in integrated animal production and slaughter systems are considered together with some forecasts for the future.
An Overview of Breeding Research in Coconut — the Sri Lankan Experience
Authors: Fernando W.M.U. , Perera L. , Peries R. R. A.
Published: July 2017

Coconut is so important, not only economically but also socially, that it was described as ‘one of Nature's greatest gifts to man’ by Burkill (1966). Despite the inherent constraints to the breeding of palm species, important progress in coconut improvement has been obtained using standard breeding techniques. A continuous effort to search for new genetic material within Sri Lanka and to conserve valuable material threatened with erosion is in progress. Somatic embryogenesis, which is the only method of vegetative propagation, has been achieved on a limited scale but consistent plant regeneration is yet to be accomplished. Zygotic embryo rescue has been exploited to propagate an indigenous ‘Makapuno ’ type coconut. Development of DNA markers in order to exploit the existing variability in coconut germplasm to its maximum potential is being explored.
SIMULATION: A powerful tool for prototyping telecommunications networks
Authors: Overview Tutorial , Roth Paul F. , Ilyas Mohammad , Mouftah H.T.
Published: July 2017

Simulation models of telecomunication networks are valuable tools for evaluating network performance during the design, development, and operational phases of network life.

This paper relates the concepts of discrete event simulation to the context of application to the telecommunication field. A range of software, useful to this enterprise, is discussed, the range extending from general-purpose to very problem-oriented languages. Finally, a primitive network simulation model, using the GPSS simulation language, is presented to illustrate the technique.

A basic bibliography, categorized by simulation subject, is included.
A Block-Oriented Network Simulator (BONeS)™
Authors: Sam Shanmugan K. , Frost Victor S. , LaRue William
Published: July 2017

Simulation plays an important role in computer-aided modeling, analysis and design of communication networks and related systems. A number of approaches based on Queueing models, Petri nets and Finite State Machines have been developed in recent years for simulating communication networks. This paper reviews the traditional approaches to modeling and simulating communication systems and presents a new approach based on a hierarchical, block-oriented modeling paradigm. The implementation of the block-oriented modeling paradigm in a graphical framework called BONeS (Block Oriented Network Simulator) is described and two examples are presented to show how BONeS can be used to model and simulate a broad range of communication networks and distributed systems.
Fast Brisk Structured Lessons Motivation Learning Success Pride
Authors: Jitendra Asha K. , Torgerson-Tubiello Rachael
Published: July 2017

These words describe contraction lessons—and results—in a “contracted” sentence. Second-grade students who were reading at the first-grade level have experienced success with the fast-paced lessons described here. And they have gone on to enjoy the world of children's literature.

In this article, we describe how we planned and successfully implemented lessons to teach contractions to a group of 6 low-performing second graders, including Tamara, a girl with learning disabilities (see box).
Assessing the Impacts of the 1988 Olympic Winter Games: The Research Program and Initial Results
Authors: Brent Ritchie J. R. , Aitken Catherine E.
Published: July 2017

This article describes research related to the XV Olympic Winter Games to be held in Calgary. An overview of a comprehensive ideal research program is given, initial economic impacts of the games are summarized, and findings from a May 1983 survey of Calgary residents are presented.
Overview of Seasonal Thermal Energy Storage (STES) Technology
Authors: Meyer Charles F.
Published: July 2017

This paper presents an overview of what seasonal thermal energy storage (STES) is, how it can best be used, and its potential benefits and problems. ATES, the storage of thermal energy in underground aquifers in freshwater, considered to be the most viable form of the technology, is only economic on a large scale, but commercial operating experience demonstrates its technical feasibility, e.g. in China. The U.S. Department of Energy has spent several million dollars supporting research into ATES over the last decade, although field trials are currently curtailed. Despite lack of funding and unwillingness on the part of the private sector to take risks in commercial development, ATES can be shown to be a valuable source of energy, and money, saving, and could be effectively exploited to advantage.
Bioenergy Use in Canada
Authors: Ruggeri G. C.
Published: July 2017

This paper presents estimates of forest biomass use by province in Canada for 1984. It shows that forest biomass makes a significant contribution to the energy supply mix of Canada's residential and industrial sectors; it also shows that there are wide inter-provincial differences in the utilization of forest biomass.
Developing Comprehensive Energy Balances
Authors: Clarke Alan , Trinnaman Judy
Published: July 2017

Energy balances giving details of production, processing and use by sector have been available for the major economies for thirty years or more. Such balances are provided annually by governmental agencies and by the OECD. No such balances have been available for many non-OECD countries. The flow of information has improved in recent years although there will always be a relative lack of precision associated with the estimates made for traditional and non-commercial fuels (dung, fuel wood, vegetable wastes).

Tackling the problems of faulty or insufficient data is facilitated by an integrated approach, using a standardised matrix of energy supply and demand. A complete energy balance for any one country may take many man-hours to construct, with significant further effort required to update it as new information becomes available.

Examples of energy balances for Kenya and Pakistan have been included.
The Environmental Challenge: The Effect of Natural Gas Demand on Europe
Authors: Baudino Mario
Published: July 2017

Although aerial pollution from combustion of natural gas is small compared to that for other fossil fuels, the threat to global warming is less, and its energy conversion efficiency is higher, EEC authorities, in 1988, regulated in a manner that discriminated against it in preference to coal. However, growing concern for the environment will change these circumstances. Natural gas is increasingly a favoured fuel.

The EEC's discussion paper Energy in Europe analyses three scenarios for the energy market over the next 20 years taking into account the impacts of supply/demand, technology, environmental care, regulations and policies. That advocating strong economic growth with strict environmental standards, improved efficiency and better consumer behaviour, is favoured. The growth in gas demand will continue with a sharp increase by the year 2000. It should grow by about 45% by 2010. The price will be higher as more expensive sources are used.
The Role of the State Oil Company in Latin America
Authors: Teixeira A.A.
Published: July 2017

ARPEL is a private organization working for the benefit of its 20 member companies as well as promoting the economic integration of their respective countries. The Latin American State Oil Companies (LASOCs) are responsible for 80% of petroleum activities in the region, which in 1990 amounted to 7.4 mbd or 11.4% of the world's production. Mexico and Venezuela are responsible for 2/3 of the output. The LASOCs. besides filling domestic needs and seeking country self-sufficiency, look for opportunities for participation in international markets and to attract external investment.
The United States and World Energy Markets
Authors: Ramsay William C.
Published: July 2017

The United States, dominating the world's energy markets as a producer and consumer is sensitive to changes in this market and intends to influence the development of global energy policy. Supply will be increased by nations such as Venezuela, Indonesia and perhaps in the future a United Yemen and the Commonwealth of Independent States, moving to freer market economies which will allow investment opportunities previously inaccessible to foreign companies. Although world energy demand will grow little of this will be in the US where, under the National Energy Strategy, comprehensive measures are being introduced to improve energy efficiency. The US energy security will be further improved by such measures as diversification of supply, larger domestic production and increasing interdependence between suppliers, traders and consumers.
Natural Gas: Fuel of the Decade and Bridge to the Millennium
Authors: Tussing A.R.
Published: July 2017

Despite a secure supply, economic advantages and environmental benefit, North American energy use has not significantly shifted from the traditional use of petroleum, coal and nuclear fuels. Electrical generation is a case in point where combustion turbines and their combined cycle variants are superior to the coal and nuclear fuelled equivalents. The reasons for natural gas not having a greater market share include an absence of confidence in the adequacy of the supply and an affordable cost.
Natural Gas Markets in Asia: From Callow Youth to Maturity
Authors: Hertzmark Donald I.
Published: July 2017

In the 1980s, Asian energy markets expanded at a rapid rate to meet the surge in demand from Japan, Korea, and Taiwan. This demand boom coincided with an increase in non-OPEC oil production in the region. As oil production stabilizes, demand looks set to rise sharply, this time in the new Newly Industrialized Countries of Southeast Asia, Thailand, Malaysia, and Indonesia. Natural gas will play a key role in this expansion of energy use and could start to lead rather than follow oil markets. The leading role of natural gas will be especially strong if gas starts to make inroads in the high and middle ends of the barrel with oxygenated gasoline and compressed natural gas for trucks.

At the bottom of the barrel, natural gas could increasingly usurp the role of residual fuel oil for environmental reasons. At the same time, regional refiners could find that residual oil is their leading source of additional feed for the new process units currently under discussion or planning.

The supply outlook for natural gas is increasingly fraught with uncertainties as more of the region's supplies must come from distant areas. In particular, LNG supplies from Malaysia and Indonesia will need to be replaced by the early part of the next century as rising domestic demand eats into the exportable gas production. New sources include China, Siberia, Sakhalin Island, Papua New Guinea, and Canada. There will be intense competition to supply the Northeast Asian markets as the gas production in Southeast Asia is increasingly used within ASEAN.
Technology Utilisation at Oryx Energy
Authors: Fleming Robert S. , Janssen James C. , Woolley Thomas
Published: July 2017

The petroleum industry has achieved major improvements in recent years in finding, developing and producing oil and gas. These improvements have been through advances in all facets of technology including computer and workstation technologies as well as horizontal drilling. Oryx Energy has aggressively applied these new techniques to improve its competitive edge. The company uses the Unix workstation systems which allow simultaneous multiple processing and improved performance and graphics. The company's Amdahl mainframe is the hub of a worldwide network of business and scientific computers. These computers use advanced geoscience and engineering software. For example, geoscience software allows sophisticated analysis and interpretation of 2D and 3D seismic data.

Oryx Energy's worldwide network also allows different specialist teams of engineers, geologists and geophysicists in different locations to provide more effective, integrated evaluations of data resulting in increased success rates.
The Use of Horizontal Drilling in International Exploration
Authors: Bagnall A.C. , Blanche J.B.
Published: July 2017

Internationally (outside the USA) more than 300 horizontal wells were drilled in 1991. Horizontal well reservoir targets generally consist of a preponderance of clastic reservoirs over carbonates in the ratio of approximately 60% to 40%.

The concept of using horizontal wells as an exploration tool can be defined as a means not only of proving new reserves in undrilled plays, but as a means of re-exploring previously drilled and poorly productive terrains. The Austin Chalk play in South Texas is the prime example of this concept in action. Exploration in this case can be defined as the adding of multiple orders of additional reserves value.

International basin selection criteria are discussed which can optimise the chances of finding high value additional reserves in the initial stages of an exploration campaign by using horizontal drilling (with the important help of previous subsurface coverage or pilot drilling).

These criteria include the presence of self sourcing carbonate reservoirs, the presence and predictability of regional fracturing, the mechanical properties of the reservoir rocks, the presence of significant original oil or gas-in-place and the reservoir depth criteria in which horizontal drilling technology is practicable and cost-effective.
3-D Seismic Mapping and Amplitude Analysis: A Gulf of Mexico Case History
Authors: Kidney Robert L. , Silver Ronald S. , Hussein H.A.
Published: July 2017

Utilization of 3-D seismic data and Direct Hydrocarbon Indicators led to the successful drilling of appraisal and development wells in the Gulf of Mexico block South Timbalier 198 (ST 198). These seismic technologies, which are routinely used by Oryx Energy Company, significantly reduced the time and cost to appraise the ST 198 discovery. Based on 2-D seismic mapping, a Pliocene Lower Buliminella (L BUL) prospect was drilled in ST 198. Although the expected reservoir was not found, an Upper Buliminella (U BUL) gas sandstone was encountered. An appraisal well of the U BUL interval confirmed this discovery. Following the drilling of these two wells, it became apparent that the structural complexities and the seismic amplitude anomalies of the area could not be adequately resolved using the 2-D seismic grid. A 3-D seismic survey was shot to delineate the discovery and evaluate the remaining potential of the South Timbalier Block 198 (ST 198).

Direct Hydrocarbon Indicators (DHIs), which are seismic anomalies resulting from the hydrocarbon effect on rock properties, are generally expected from these age sands. While the 3-D survey shows a seismic amplitude anomaly associated with the U BUL reservoir, the areal extent of the seismic anomaly did not match the findings of the two wells. A DHI study was performed to determine if this inconsistency could be explained and if the amplitude anomaly could be used in the well planning. The two key steps which confirmed that this amplitude anomaly is a DHI were properly calibrating the seismic data to the well control and determining the theoretical seismic response of the gas sandstones. The DHI study along with the 3-D mapping led to the successful development of the ST 198 U BUL reservoir and to setting up a successful adjacent fault block play. Finally, 3-D mapping also identified a L BUL trap updip from the original L BUL prospect which resulted in a successful drilling effort.
Late Jurassic Structural Inversion in the North Viking Graben and East Shetland Basin, UK North Sea
Authors: Booth A. , Stockley F.J. , Robbins J.A.
Published: July 2017

Interpretation of regional seismic data and analysis of available well data from the North Viking Graben suggest that a significant phase of structural inversion took place in the Late Jurassic and also in the early Cretaceous. It is believed that this inversion may be a consequence either of compression of the basin as a whole or alternatively, transpressional uplift along offset NW-SE fault systems.

The north-south trending Penguin Ridge in UKCS quadrant 211 is interpreted as being such an inversion feature. The Penguin Ridge may well be an extreme example of apparent compression within the context of the Northern North Sea. However, it is clear that less well-developed structures of a similar type have previously been interpreted as simple extensional fault blocks. A compressional or transpressional mode of formation has implications for both reservoir diagenesis and faulting and thus important consequences for exploration play evaluation.

It is also proposed that the Penguin Ridge is the northerly limit of a north-south trend or fairway in which compressional features can be observed from regional and field specific seismic data. Certainly there are many anomalous structures within the complex crestal areas of the majority of the Brent Province fields.

The impact of such a model is the subject of continuing studies, but it is clear that as the search for more subtle plays intensifies in mature exploration areas such as the North Sea, it is important that the explorationist keeps an open mind, especially when confronted with apparently anomalous data.
Depositional Modelling of UK North Sea Alba Field Reservoir
Authors: Thomas Ian W. , Collinson John D. , Jones Colin M.
Published: July 2017

The Alba Field is contained within block 16/26 of the Central North Sea of the United Kingdom. This oil field was discovered in 1984 by Chevron UK Ltd with the 16/26–5 well and has been appraised by 16 wells and sidetracks. The field is currently being developed and is scheduled to achieve first production around the end of 1993.

A 3-D seismic survey, acquired in 1989, has greatly enhanced delineation of the field. It is a NW-SE trending linear feature approximately 5.25 miles (8.5 kms) in length with adjacent satellite structures. The reservoir sands comprise the Nauchlan Member of the Alba Formation (Horda Group) and are primarily of Middle Eocene age. Gross sand thicknesses in excess of 400 ft (120 m) are present within the field area with porosities ranging up to 38% and permeabilities of the order of 2800 mD.

The sands were deposited as a series of submarine channel fills whose mutual relationships present problems of detailed interpretation. Channel sandbodies appear to be discontinuous along their length for a variety of reasons including erosive relief on the base of the channel, and partial filling of channels otherwise filled by mud.
Predictive Seismic Reservoir Modelling in the UK Manx Basin
Authors: Ross C.P. , Flack S.D.
Published: July 2017

Within the Manx Basin, the primary reservoir is the early Triassic Helsby sandstone. The Helsby occurs in various facies, each with its own characteristic reservoir properties. Although seismic reflection data is insensitive to changes in the pore fluid fill, geophysical modelling has shown that it should be possible to map porosity variations on conventional seismic data.
The Next Oil Price Shock: The World's Remaining Oil and Its Depletion
Authors: Campbell C.J.
Published: July 2017

The Oil industry is in transition between growth and decline as the world approaches the Midpoint of the depletion of its conventional oil. Assessing the world's oil endowment is bedevilled by problems of definition to distinguish conventional from unconventional oil and to specify the precise nature of reserves. The database in the public domain is weak with important reported reserve numbers having a “political” content. New methods have been developed to estimate the ultimate recovery of conventional oil, and hence the undiscovered potential. That in turn gives the amount remaining, (here 932 Gb) which is unevenly distributed with about half in just five Middle East countries. Applying Depletion Rates (percentage of the remaining produced each year) to the Remaining allows construction of a depletion model under alternative scenarios of world demand, with a few well-endowed countries in a swing role. The model suggests that the scene is set for another oil price shock as these countries gain an increased share of the market, which will in turn herald a deepening long-term shortfall in supply due to resource constraints. It may be an historical turning point with colossal political and economic implications, imposing a more sustainable lifestyle on mankind.
Probabilistic Assessment of World Petroleum Resources and Reserves at Fourteenth World Petroleum Congress
Authors: Masters Charles D. , Attanasi Emil D. , Root David H.
Published: July 2017

The occurrence and quantity of world petroleum resources appears to be well understood. The numbers are so great, however, that even minor variants in the total picture can be responsible for enormous localized industrial activity. Specific knowledge of the widespread local occurrences of oil and gas, therefore, is important to economic development and to the free market distribution of energy. It is also clear, however, that a large proportion of the recoverable petroleum resources are found in only a few selected localities.

We believe that, worldwide, recoverable conventional oil and gas exist in ultimate quantities approximating 2300 billion barrels (370 Gm3) of oil and 12 000 trillion cubic feet (340 TM3) of gas. These values are limited by our concepts of world petroleum geology and our understanding of specific basins; nonetheless, continued expansion of exploration activity, around the world, has resulted in only minimal adjustments to our quantitative understanding of ultimate resources.

Reserves reporting has been one of the greatest hindrances to a thorough understanding of world resources because we are just now gaining an understanding of field growth and what is actually being calculated and reported from various localities.

Unconventional resources are present in large quantities, in particular in the Western Hemisphere, and are of a dimension to substantially contribute to world reserves should economic conditions permit.
Use and Implementation of SPE and WPC Petroleum Reserves and Definitions
Authors: Roger Juan V. , Antunez Simon
Published: July 2017

In February of 1987 the Society of Petroleum Engineers, SPE, approved its 'Definitions for Oil and Gas Reserves' and, during the same year, the 'Classification and Nomenclature Systems for Petroleum and Petroleum Reserves' of the World Petroleum Congress (WPC) was approved as the 12th WPC. Both, the SPE and WPC's Reserves Definitions were the result of extensive research throughout all sectors of the Oil Industry in most of the oil producing countries.

Even though there was no coordination or discussion between the two groups responsible for these efforts, the concepts and definitions in the two documents are very similar. Since then discussions have continued to be held throughout the world, with the participation of different sectors of the Oil Industry, on some of the concepts included in the SPE Definitions.

Venezuela has actively participated in both of these efforts and continues to contribute with permanent representatives in the working groups. Internally these concepts have been used extensively when estimating Venezuelan reserves and in the revisions that took place in 1987, it justified the addition of approximately 25 000 MMB to the country's proved oil reserves.

The paper discusses the concepts included in these documents and attempts to evaluate the relative merits of the arguments for and against the Definitions. Also discussed, as an example of the utility of these definitions, is the use that Venezuela has made of these concepts.
An Enhanced Resource Classification – A Tool for Decisive Exploration
Authors: Vollset Jan , Abrahamsen Kjell A. , Lindbo Kjell
Published: July 2017

The classification of resources, both undiscovered and discovered, is becoming increasingly important in the decision making process of major oil companies. Statoil has developed a new internal resource classification system to support investment decisions and the management of petroleum assets.

To achieve this goal, resource definitions have been related to the value chain from early exploration to production, and to economic assessments. Each resource class is associated with a typical business action. Both undiscovered and discovered resources are included, with the discovered, undeveloped petroleum assets given a major focus due to their importance in resource management.

The use of the classification system increases the awareness of the quality and consistency of the resource calculations and of the registration of discovered resources. A method of analysing prospects and discoveries according to their different geological segments (fault blocks etc.) has been chosen to achieve a consistent resource assessment. This reduces the possibility of unexpected results, causing significant reductions in the recorded discovered resources.

The estimates of resources are made using probability distributions. In this way the summation of resources by the use of Monte Carlo simulation, is a fast operation and the variance can be estimated. The proven reserves, which we define as a 'low' value with a high degree of certainty (90 percentile), are easy to calculate both within individual fields and for aggregated reserves of many fields.

Statoils new classification system has the following advantages:

– it gives a better description of fields and prospects with uncertain economy.

– it is based on the value chain from unmapped prospects to production

– the categories are linked to typical business actions

– the importance of economy in the system makes it useful for target setting and performance measurements

– the probabilistic distribution of resources within a segment, reservoir, prospect or field makes a statistically correct summation possible

– the use of segmentation of reservoir zones gives a better separation between areas with tested hydrocarbons and areas carrying a risk of being water-bearing, and is the basis for classifying reserves as proved.
Authorized Conflicts: The Bible in Church Conversations
Authors: Huwiler Elizabeth
Published: July 2017

Although Christians may think of the authority of the Bible as something that will resolve our arguments, we continue to argue. The authority of the Bible is primarily one of authorizing: giving us our identity. The Bible itself is full of arguments, and we who live in its heritage continue those arguments and also use the Bible as a model for arguing about in areas that were not contentious in biblical times. Christians can recognize one another as sisters and brothers in Christ while continuing to argue.
The Effects of the Level of Assurance, Accounting Firm, Capital Structure, and Bank Size on Bank Lending Decisions
Authors: Miller Jeffrey R. , Smith L. Murphy
Published: July 2017

This study examines the effect of the type of accounting service (audit, review, compilation, and no report), the accounting firm providing the service, the capital structure of the borrower, and the bank size on loan officers' lending decisions. The findings show the level of service had an impact on the amount of the loan, but not on the interest rate awarded nor on the decision whether or not to grant a line of credit. The accounting firm (large international with good reputation versus local with unknown reputation) providing the accounting service, however, did not significantly affect the bank loan decision. Capital structure of the borrower had a significant impact on the decision to grant a line of credit, the loan size, and the interest rate. In addition, the loan size and interest rate were significantly influenced by the size of the bank granting the loan.
Managerial Discretion and Accounting for Research and Development Costs
Authors: Chambers Dennis , Jennings Ross , Thompson Robert B.
Published: July 2017

This study investigates the extent to which potential financial reporting benefits from capitalizing and amortizing R&D costs depend on increasing the level of discretion permitted to financial statement preparers. To provide evidence on this issue, we examine the impact of alternative accounting schemes for R&D costs on the extent to which earnings and book values jointly explain the observed distribution of share prices. One alternative requires firms to capitalize and amortize R&D outlays, but provides them with no more discretion than that permitted under current rules. The other alternatives reflect increasing discretion over which R&D costs are recognized as assets and the periods over which these assets are amortized. We find that ability to explain the distribution of share prices increases with discretion, and conclude that substantial managerial discretion is likely to be a necessary (though not sufficient) ingredient of any alternative R&D accounting scheme that is capable of producing economically significant financial reporting benefits.
Reducing False Alarms in the Detection of Human Influence on Data
Authors: Rodriguez Ricardo J.
Published: July 2017

Benford's law states that the frequency of first significant digits (FSD) in a random sample decreases as those digits increase. While this curious law is increasingly used to test for human influence on data, including corporate fraud and psychological barriers in financial markets, it often produces frustratingly many false positives. I advance toward the goal of understanding and reducing the false alarm rate by showing that Benford's law is inadequate when data are drawn from various common distributions, including the ubiquitous normal distribution. I also prove that Benford's law is obeyed when the untainted data are lognormally distributed with a high variance parameter. In addition, I explain why data sets expressible as the product of two other sets often conform better to Benford's law than either multiplicand data set. The empirical analysis strongly supports these findings.
The Effect of Electronic Audit Environments on Performance
Authors: Bible Lynn , Graham Lynford , Rosman Andrew
Published: July 2017

This study reports the results of an experiment that examines the impact of electronic work environments on auditor performance. It builds on research that has found that electronic work environments are more cognitively demanding than traditional paper environments and, thus, negatively impact performance. Forty-eight auditors with an average of 78 months of audit experience from one Big Four accounting firm participated. Auditors in the electronic work environment were less able to identify seeded errors and to use them properly in evaluating loan covenants than auditors in the traditional paper environment. Given these findings, suggestions are made as to how to maximize auditor performance in an electronic work environment.
The Effect of Potential Environmental Liabilities on Earnings Response Coefficients
Authors: Bae Benjamin , Sami Heibatollah
Published: July 2017

In this study, we investigate the implication of potential environmental liabilities for the reliability (noisiness) of accounting information as it manifests itself in the magnitude of an earnings response coefficient (ERC). Multiple regression analyses of abnormal stock returns on earnings surprise and other control variables are carried out. The results provide support for the hypothesis that the ERCs for potentially responsible party (PRP) firms are lower than those of non-PRP firms. Robustness of the results, with regard to the sample selection procedures and inclusion/exclusion of different control variables, was checked as well. In addition, the results indicate that as firms are named as PRP for more sites, their ERCs decline, which is an indication that the market perceived increased noise in their earnings. These results are consistent with the notion that potential environmental liabilities create noise in a firm's accounting system in general and its earnings in particular.
A Comparison of Analysts' and Investors' Biases in Interpreting Accruals: A Valuation Approach
Authors: Kang Tony , Yoo Yong Keun
Published: July 2017

Elgers, Lo, and Pfeiffer (2003) argue that analysts' earnings forecasts are less biased than the market's earnings expectation in interpreting accruals. Their argument implies that analysts' earnings forecasts could potentially mitigate the market's mispricing of accruals by guiding investors to reduce their earnings prediction errors arising from the misinterpretation of accruals. Their results call for further investigation, however, owing to two questionable research design choices: (1) estimating the magnitude of the market's bias using the traditional earnings response coefficient (ERC) model, which is vulnerable to the well-known omitted-variable problem; and (2) examining only the bias in short-term (i.e., one-year-ahead) earnings expectations, ignoring possible bias in earnings expectations for longer future periods. To alleviate these concerns, we take an alternative approach in which we compare the bias of the market's equity value estimates (i.e., stock prices) against the bias of equity value estimates based on analysts' earnings forecasts in valuing accruals. By taking this alternative approach, we find that analysts' earnings forecasts are more biased than stock prices in interpreting accruals. Thus, contrary to Elgers, Lo, and Pfeiffer (2003), we conclude that analysts' earnings forecasts do not mitigate the market's mispricing of accruals.
Accounting Conservatism and Real Options
Authors: Smith Michael J.
Published: July 2017

I address the interaction between accounting conservatism and real options in both a staged investment and abandonment model. An accounting policy biased toward classifying a Good (Bad) project as Bad (Good) is conservative (aggressive). The accounting signal is optimally conservative when the ex ante unconditional expected terminal value is less than the second investment (staged investment) or value of the asset in its alternative use (abandonment). The relative size of the second investment is a proxy for the degree of sequentiality of the project. Because research and development projects typically require more sequential investment than fixed assets projects, the staged investment results are consistent with the differential treatment of these types of investment under U.S. Generally Accepted Accounting Principles.
Credit Rating Agencies in Capital Markets: A Review of Research Evidence on Selected Criticisms of the Agencies
Authors: Frost Carol Ann
Published: July 2017

This study assesses the validity of widespread criticisms of the large, “nationally recognized” credit rating agencies (CRAs). The accounting scandals of 2000-02, in particular the highly publicized failure of Enron in December 2001, led many to question their competence and the value of their ratings. This paper evaluates important criticisms of the CRAs discussed in a recent Securities and Exchange Commission (SEC) staff report by using evidence from empirical research studies, and suggests many promising subjects for future research. The analysis given in this paper, and the results of the suggested research (when available), should be of particular interest to lawmakers and regulators who are responsible for determining whether and to what extent the credit rating industry should be subject to statutory and regulatory oversight. Although little rigorously gathered empirical evidence supports the criticisms, many issues remain unresolved. Powerful tests related to potential conflicts of interest and alleged unfair practices are exceptionally difficult to design, and the alleged deficiencies of rating agencies' disclosure practices have yet to be analyzed. Finally, many criticisms are based on subjective benchmarks that are difficult to quantify and open to question. To date, however, accounting researchers have played only a minor role in the debate. Because they are well-versed in such areas as disclosure analysis, capital market tests, and the operation of financial intermediaries and external auditors, these researchers potentially have much to add in this regard.
The Public Auditor as an Explicit Insurer of Client Restatements: A Proposal to Promote Market Efficiency
Authors: Ronen Joshua , Sagat Kenneth A.
Published: July 2017

This paper presents a proposal for reform of the public auditor—client relationship. We suggest the creation of incentives to permit public auditors to form, as an optional matter, audit risk insurers (ARIs) to assume the risk of a deficient public audit. We discuss the following in turn: (1) the need for this radical structural change, (2) why the change will produce benefits justifying the cost and dislocation resulting from implementing it, (3) how it will work, (4) the incentives necessary to bring it about, including limitations on liability, (5) the need for a transition period, and (6) the resulting benefit to not only the audit process but also the promotion of efficiency in the securities markets. An increasingly complex financial world demands better and more transparent signaling to investors. In our view, the ARI, powered by its risk assumption attributes, will function as a more efficient intermediary for transmitting financial information to investors.
Audit Firm Tenure and the Equity Risk Premium
Authors: Boone Jeff P. , Khurana Inder K. , Raman K. K.
Published: July 2017

Although investor perceptions of audit quality play a critical role in maintaining systemic confidence in the integrity of financial accounting reports (Levitt [2000]), prior research on the effects of auditor tenure from an investor perspective is relatively sparse. In this study, we investigate whether investors price audit firm tenure for Big Five audits by examining the relation between tenure and the ex ante equity risk premium, that is, the excess of the company-specific ex ante cost of equity capital over the risk-free interest rate. Based on prior research, whereas the “auditor learning” argument predicts that audit quality will change in only one direction (i.e., improve) with tenure, the “auditor-client closeness” argument suggests that audit quality may decrease beyond some (albeit unspecified) length of tenure because of impaired auditor independence and objectivity. Consistent with prior theoretical arguments, we find some evidence of a nonlinear relation between audit firm tenure and the ex ante equity risk premium, that is, we find that the equity risk premium decreases in the early years of tenure but increases with additional years of tenure. These findings persist after we control for well-known risk factors and company characteristics that have been shown in prior research to be related to the cost of equity capital. The implications of our findings are discussed.
Quality versus Quantity: The Case of Forward-Looking Disclosure
Authors: Beretta Sergio , Bozzolan Saverio
Published: July 2017

Empirical studies do not make a clear distinction between the quantity and quality of disclosure. As it is generally assumed that the quantity of information has an implication in determining its quality, quantity measures are often used as proxy for disclosure quality. Nonetheless, the measurement of the quality of disclosure is recognized as a relevant question that is still open and the importance of developing measures of disclosure quality is emphasized in literature.

This paper disputes the idea that the quantity of disclosure is a sound proxy for the quality of disclosure. The adoption of multidimensional frameworks for the appreciation of disclosure is discussed and an index for quality disclosure is proposed. Moving from the assumption that high-quality information should usefully support external users in the judgment of past and future performance, we hypothesize that high-quality disclosure is positively associated with accuracy and negatively associated with the dispersion of analysts' earnings forecasts.

We show analytically that the proposed framework captures dimensions of annual report disclosure that are considered useful by financial analysts in forecasting earnings and that the proposed measure of disclosure quality has a stronger positive statistical association with accuracy and a stronger negative association with the dispersion of financial analysts' earnings forecasts than a simple index of disclosure quantity has.
Analysts' Heterogeneous Earnings Forecasts and Stock Recommendations
Authors: Lustgarten Steven , Tang Charles
Published: July 2017

We examine the relation between analysts' earnings forecasts and their stock recommendations. We hypothesize that if analysts base their recommendations on their earnings forecasts, recommendations will be more (less) favorable relative to consensus recommendations when analysts' earnings forecasts are more optimistic (pessimistic) relative to consensus earnings forecasts. The data support this hypothesis. We find the relation between recommendations and forecasts to be stronger when earnings are more value relevant. Factors such as lower earnings volatility, higher growth, lower market risk, healthier financial conditions, and larger analyst following make stock recommendations more responsive to earnings forecasts. Stock recommendations are also more responsive when the forecast horizon is longer.
Should Executive Options be Expensed?
Authors: Ronen Joshua
Published: July 2017

On December 16, 2004, the Financial Accounting Standards Board published FASB Statement No. 123 (revised 2004), which significantly changes the accounting for employee stock options. Under the new standard, equity-based compensation results in a cost to the issuing enterprise and should be measured at its fair value on the grant date, based on the estimated number of awards that are expected to vest. I contend that expensing stock or option grants is not responsive to either the needs of a corporation's creditors, or to the needs of equity investors since the cost of the share-based payments is borne only by the preexisting shareholders; the corporation itself suffers no sacrifice in assets or other resources1 (unless its own shares are considered an asset, which is not the case under the present Conceptual Framework and Generally Accepted Accounting Practices [GAAP]). Hence, I suggest the use of three separate statements instead of the single income statement now provided. Specifically, I propose that the first statement—the “Corporation Income Statement”—not include share-based payments as an expense. Rather, a “Statement of Costs and Benefits to Pre-existing Shareholders” would show the dilution cost to the pre-existing shareholders; this dilution cost would be determined as the amounts that, if accrued during each year throughout the vesting period and until exercise, would cumulatively sum to the intrinsic value at exercise (the price of the optioned share minus the exercise price). A combined “Statement of Enterprise Income” would then show the totals of the amounts reported in the other two statements. The combined statement would reflect the net income from operations with regard to both the corporation and its preexisting shareholders; that is, it would reflect the cost of manufacturing products or rendering services. This paper discusses the implications of this proposal for the debate on the distinctions between liabilities and equities and for the treatment of inseparable compound securities such as convertible bonds.
Investor Sentiment, Accruals Anomaly, and Accruals Management
Authors: Ali Ashiq , Gurun Umit G.
Published: July 2017

This study examines the effect of investor sentiment on the accruals anomaly. We find that for small stocks mispricing per unit of accruals is greater in high sentiment periods as compared with low sentiment periods. This result is consistent with the notion that in high sentiment periods individual investors pay less attention toward understanding the accruals and cash flow components of earnings. This effect is observed primarily for small stocks because these stocks are more likely to be followed by individual investors, who tend to have limited attention. We also find that for small stocks reported accruals are greater during high sentiment periods as compared with low sentiment periods, suggesting that managers exploit the greater overvaluation per unit of accruals during high sentiment periods.
Client, Industry, and Country Factors Affecting Choice of Big N Industry Expert Auditors
Authors: Ettredge Michael , Kwon Soo Young , Lim Chee Yeow
Published: July 2017

This study investigates client choice of industry specialist auditors from among the Big N (Big 4 or 5) in an international (non-U.S.) setting. We investigate client-specific, industry-level and country-level factors hypothesized to enhance or decrease Big N clients' demand for industry expertise. Using data for twenty-nine countries and fourteen broad industries from 1993-2005, we find that international client choice of industry specialist Big N auditors is positively associated with client size, client growth opportunities, and client capital intensity. The choice of industry specialists from among the Big N is more prevalent in countries where levels of investor protection, quality of financial reporting environment, and national economic development are higher. Clients belonging to regulated industries tend to select industry specialists.