bluuebunny/crossref_metadata_2025 huggingface dataset:
Important role of fungal intracellular laccase for melanin synthesis: purification and characterization of an intracellular laccase from Lentinula edodes fruit bodies
Authors: Nagai Masaru , Kawata Maki , Watanabe Hisayuki , Ogawa Machiko , Saito Kumiko , Takesawa Toshikazu , Kanda Katsuhiro , Sato Toshitsugu
Published: August 2003

A laccase (EC 1.10.3.2) was isolated from the fully browned gills of Lentinula edodes fruit bodies. The enzyme was purified to a homogeneous preparation using hydrophobic, cation-exchange and size-exclusion chromatography. SDS-PAGE analysis showed the purified laccase, Lcc 2, to be a monomeric protein of 58·0 kDa. The enzyme had an isoelectric point of around pH 6·9. The optimum pH for enzyme activity was around 3·0 against 2,2′-azino-bis(3-ethylbenzothiazoline-6-sulfonic acid)diammonium salt (ABTS), and it was most active at 40 °C and stable up to 50 °C. The enzyme contained 8·6 % carbohydrate and some copper atoms. The enzyme oxidized ABTS, p-phenylenediamine, pyrogallol, guaiacol, 2,6-dimethoxyphenol, catechol and ferulic acid, but not veratryl alcohol and tyrosine. β-(3,4-Dihydroxyphenyl)alanine (l-DOPA), which was not oxidized by a laccase previously reported from the culture filtrate of L. edodes, was also oxidized by Lcc 2, and the oxidative product of l-dopa was identified as l-DOPA quinone by HPLC analysis. Lcc 2 was able to oxidize phenolic compounds extracted from fresh gills to brown-coloured products, suggesting a role for laccase in melanin synthesis in this strain.
A novel, fast-growing Borrelia sp. isolated from the hard tick Hyalomma aegyptium in Turkey
Authors: Güner Ece S. , Hashimoto Naoya , Kadosaka Teruki , Imai Yasuyuki , Masuzawa Toshiyuki
Published: August 2003

A novel, fast-growing spirochaete was isolated from the hard tick Hyalomma aegyptium (family Ixodidae, subfamily Metastriata) using Barbour–Stoenner–Kelly (BSK) II medium. Tick samples were taken during the summer of 2000 from the Istanbul area in northwestern Turkey. Sixty-seven of 153 adults (44 %) and 72 of 185 nymphs (39 %) were infected with the novel spirochaete, whereas none of the 20 larvae examined were infected. The optimal growth temperature of the spirochaete in BSK II medium was 34–37 °C, and it could grow at 39 °C. Doubling times at 34 and 37 °C were 5·3 and 5·1 h, respectively. Six pure cultures of the spirochaete were obtained and characterized by microscopic observation, sequence analysis of the flagellin gene (flaB), SDS-PAGE and Western blotting. The spirochaete was morphologically similar to those of the genus Borrelia and contained a 41 kDa protein reactive with mAb H9724 specific to the flagellin of a Borrelia species. Polyclonal antibody raised to this spirochaete reacted with several antigen bands, whereas no bands were detected with Borrelia burgdorferi, Borrelia hermsii, Borrelia turicatae and Borrelia parkeri. The flaB sequences of the six isolates showed high similarity, with sequence similarity values ranging from 99·2 to 100 %; however, the similarity of the isolates' flaB sequences to those of the Lyme-disease-related Borrelia and relapsing-fever-associated Borrelia species was less than 90 %. These findings suggest that the unique spirochaete is a member of the genus Borrelia, and differs from previously described Borrelia species.
A synthetic analysis of the Saccharomyces cerevisiae stress sensor Mid2p, and identification of a Mid2p-interacting protein, Zeo1p, that modulates the PKC1–MPK1 cell integrity pathway
Authors: Green Robin , Lesage Guillaume , Sdicu Anne-Marie , Ménard Patrice , Bussey Howard
Published: August 2003

Mid2p is a plasma membrane protein that functions inSaccharomyces cerevisiaeas a sensor of cell wall stress, activating thePKC1–MPK1cell integrity pathway via the small GTPase Rho1p during exposure to mating pheromone, calcofluor white, and heat. To examine Mid2p signalling, a global synthetic interaction analysis of amid2mutant was performed; this identified 11 interacting genes. These includeWSC1andROM2, upstream elements in cell integrity pathway signalling, andFKS1andSMI1, required for 1,3-β-glucan synthesis. These synthetic interactions indicate that the Wsc1p sensor acts through Rom2p to activate the Fks1p glucan synthase in a Mid2p-independent way. To further explore Mid2p signalling a two-hybrid screen was done using the cytoplasmic tail of Mid2p; this identifiedZEO1(YOL109w), encoding a 12 kDa peripheral membrane protein that localizes to the plasma membrane. Disruption ofZEO1leads to resistance to calcofluor white and to a Mid2p-dependent constitutive phosphorylation of Mpk1p, supporting a role for Zeo1p in the cell integrity pathway. Consistent with this,zeo1-deficient cells suppress the growth defect of mutants in the Rho1p GDP–GTP exchange factor Rom2p, while exacerbating the growth defect ofsac7Δ mutants at 37 °C. In contrast,mid2Δ mutants have opposing effects tozeo1Δ mutants, being synthetically lethal withrom2Δ, and suppressing an 18 °C growth defect ofsac7Δ, while overexpression ofMID2rescues arom2Δ 37 °C growth defect. Thus,MID2andZEO1appear to play reciprocal roles in the modulation of the yeastPKC1–MPK1cell integrity pathway.
A major catalase (KatB) that is required for resistance to H2O2 and phagocyte-mediated killing in Edwardsiella tarda
Authors: Srinivasa Rao P. S. , Yamada Yoshiyuki , Leung Ka Yin
Published: August 2003

Edwardsiella tardacauses haemorrhagic septicaemia in fish and gastro- and extra-intestinal infections in animals including humans. Resistance to phagocyte-mediated killing is one of the virulence factors ofEd. tarda. The authors' previous studies using TnphoAtransposon mutagenesis indicated thatkatBmutants derived from the strain PPD130/91 are at least 1·6 log higher in LD50values than the wild-type strain. These findings suggest the involvement of catalase (KatB) inEd. tardapathogenesis. In this study, experiments were conducted to characterize the contribution of KatB toEd. tardainfection. Zymographic analyses indicated that the 22Ed. tardastrains examined expressed three different types of catalase-peroxidases (Kat1–3) based on their mobility in non-denaturing polyacrylamide gels. KatB (Kat1), the major catalase enzyme, was expressed in eight out of 22Ed. tardastrains, and was commonly found in virulent strains except AL9379. AL9379 has a mutatedkatB, which has a base substitution and a deletion that translate into stop codons in the catalase gene. KatB produced by PPD130/91 was located in both periplasmic and cytoplasmic fractions and was constitutively expressed in various growth phases. Kinetics studies indicated that the catalase provided resistance to H2O2- and phagocyte-mediated killing. Infection kinetics studies ofkatBmutant 34 in gourami fish demonstrated its inability to survive and replicate in phagocyte-rich organs and this prevented the dissemination of infections when compared to the wild-type. Complementation of catalase mutants restored the production of catalase, and led to an increase in the resistance to H2O2- and phagocyte-mediated killing, and a decrease in LD50values. This study has identified and characterized a major catalase gene (katB) that is required for resistance to H2O2- and phagocyte-mediated killing inEd. tarda. The results also suggest that catalase may play a role as a virulence factor inEd. tardapathogenesis.
Marinomonas mediterranea is a lysogenic bacterium that synthesizes R-bodies
Authors: Hernández-Romero Diana , Lucas-Elío Patricia , López-Serrano Daniel , Solano Francisco , Sanchez-Amat Antonio
Published: August 2003

The melanogenic marine bacterium Marinomonas mediterranea synthesizes R-bodies as revealed by transmission electron microscopy. These structures were previously described in some obligate symbionts of paramecia and some free-living bacteria, none of which was isolated from sea water. In other micro-organisms, the synthesis of R-bodies has been related to extrachromosomal elements. Accordingly, M. mediterranea induction by mitomycin C or UV radiation resulted in the production of defective phages resembling bacteriocins, indicating that it is a lysogenic bacterium. Two mitomycin-C-resistant strains defective in prophage replication have been isolated. These mutants, and the previously obtained strains ngC1, T102 and T103, the latter mutated in the ppoS gene encoding a sensor histidine kinase, are affected not only in phage replication but also in polyphenol oxidase activities and melanin synthesis, suggesting a relationship between the control of all these processes.
Human DNA polymerase κ uses template–primer misalignment as a novel means for extending mispaired termini and for generating single-base deletions
Authors: Wolfle William T. , Washington M. Todd , Prakash Louise , Prakash Satya
Published: September 2003

Human DNA polymerase κ (hPolκ) is a proficient extender of mispaired primer termini on undamaged DNA, wherein it extends directly by incorporating the next correct nucleotide, generating single-base substitutions in the process. Biochemical and genetic studies, however, have indicated that, in addition to single-base substitutions, Polκ generates single-base deletions. Here we show that hPolκ is very adept at using template–primer misalignment as a novel means for extending mispaired termini and for generating single-base deletions. The proficient ability of hPolκ to extend mispaired primer termini either directly or by misalignment could be important for the continued and efficient progression of the replication fork when mismatches introduced by the replicative polymerase are not proofread. In extending from nucleotides opposite DNA lesions, hPolκ uses the direct and misalignment modes of mispair extension to different extents, depending on whether the template base is present or not at the primer terminus; thus, although hPolκ can extend directly from nucleotides opposite damaged bases, it can use only the misalignment mechanism to extend from nucleotides opposite an abasic site. A particularly unconstrained active site at the template–primer junction could afford hPolκ the ability to tolerate the geometric distortions of mismatched base pairs or those resulting from template–primer misalignment, thereby enabling it to use both of these modes of mispair extension.
A transcriptional regulatory cascade that controls left/right asymmetry in chemosensory neurons ofC. elegans
Authors: Chang Sarah , Johnston Robert J. , Hobert Oliver
Published: September 2003

The molecular mechanisms of differential pattern formation along the left/right (L/R) axis in the nervous system are poorly understood. The nervous system of the nematodeCaenorhabditis elegansdisplays several examples of L/R asymmetry, including the directional asymmetry displayed by the two ASE taste receptor neurons, ASE left (ASEL) and ASE right (ASER). Although bilaterally symmetric in regard to all known morphological criteria, these two neurons display distinct chemosensory capacities that correlate with the L/R asymmetric expression of three putative sensory receptor genes,gcy-5, expressed only in ASER, andgcy-6andgcy-7, expressed only in ASEL. In order to understand the genetic basis of L/R asymmetry establishment, we screened for mutants in which patterns of asymmetricgcygene expression are disrupted, and we identified a cascade of several symmetrically and asymmetrically expressed transcription factors that are sequentially required to restrictgcygene expression to either the left or right ASE cell. These factors include the zinc finger transcription factorche-1; the homeobox genescog-1,ceh-36, andlim-6; and the transcriptional cofactorsunc-37/Grouchoandlin-49. Specific features of this regulatory hierarchy are sequentially acting repressive interactions and the finely balanced activity of antagonizing positive and negative regulatory factors. A key trigger for asymmetry is the L/R differential expression of the Nkx6-type COG-1 homeodomain protein. Our studies have thus identified transcriptional mediators of a putative L/R-asymmetric signaling event and suggest that vertebrate homologs of these proteins may have similar functions in regulating vertebrate brain asymmetries.
A novel and essential mechanism determining specificity and activity of protein phosphatase 2A (PP2A) in vivo
Authors: Fellner Thomas , Lackner Daniel H. , Hombauer Hans , Piribauer Patrick , Mudrak Ingrid , Zaragoza Katrin , Juno Claudia , Ogris Egon
Published: September 2003

Protein phosphatase 2A (PP2A) is an essential intracellular serine/threonine phosphatase containing a catalytic subunit that possesses the potential to dephosphorylate promiscuously tyrosine-phosphorylated substrates in vitro. How PP2A acquires its intracellular specificity and activity for serine/threonine-phosphorylated substrates is unknown. Here we report a novel and phylogenetically conserved mechanism to generate active phospho-serine/threonine-specific PP2A in vivo. Phosphotyrosyl phosphatase activator (PTPA), a protein of so far unknown intracellular function, is required for the biogenesis of active and specific PP2A. Deletion of the yeast PTPA homologs generated a PP2A catalytic subunit with a conformation different from the wild-type enzyme, as indicated by its altered substrate specificity, reduced protein stability, and metal dependence. Complementation and RNA-interference experiments showed that PTPA fulfills an essential function conserved from yeast to man.
Skewing X chromosome choice by modulating sense transcription across theXistlocus
Authors: Nesterova Tatyana B. , Johnston Colette M. , Appanah Ruth , Newall Alistair E.T. , Godwin Jonathan , Alexiou Maria , Brockdorff Neil
Published: September 2003

The X-inactive-specific transcript (Xist) locus is acis-acting switch that regulates X chromosome inactivation in mammals. Over recent years an important goal has been to understand howXistis regulated at the initiation of X inactivation. Here we report the analysis of a series of targeted mutations at the 5′ end of theXistlocus. A number of these mutations were found to cause preferential inactivation, to varying degrees, of the X chromosome bearing the targeted allele in XX heterozygotes. This phenotype is similar to that seen with mutations that ablateTsix, an antisense RNA initiated 3′ ofXist. Interestingly, each of the 5′ mutations causing nonrandom X inactivation was found to exhibit ectopic sense transcription in embryonic stem (ES) cells. The level of ectopic transcription was seen to correlate with the degree of X inactivation skewing. Conversely, targeted mutations which did not affect randomness of X inactivation also did not exhibit ectopic sense transcription. These results indicate that X chromosome choice is determined by the balance ofXistsense and antisense transcription prior to the onset of random X inactivation.
Disruption of theAtREV3Gene Causes Hypersensitivity to Ultraviolet B Light and γ-Rays in Arabidopsis: Implication of the Presence of a Translesion Synthesis Mechanism in Plants [W]
Authors: Sakamoto Ayako , Lan Vo Thi Thuong , Hase Yoshihiro , Shikazono Naoya , Matsunaga Tsukasa , Tanaka Atsushi
Published: September 2003

To investigate UV light response mechanisms in higher plants, we isolated a UV light–sensitive mutant, rev3-1, in Arabidopsis. The root growth of rev3-1 was inhibited after UV-B irradiation under both light and dark conditions. We found that chromosome 1 of rev3-1 was broken at a minimum of three points, causing chromosome inversion and translocation. A gene disrupted by this rearrangement encoded the catalytic subunit of DNA polymerase ζ (AtREV3), which is thought to be involved in translesion synthesis. The rev3-1 seedlings also were sensitive to γ-rays and mitomycin C, which are known to inhibit DNA replication. Incorporation of bromodeoxyuridine after UV-B irradiation was less in rev3-1 than in the wild type. These results indicate that UV light–damaged DNA interrupted DNA replication in the rev3-1 mutant, leading to the inhibition of cell division and root elongation.
Phosphorylation of the Potyvirus Capsid Protein by Protein Kinase CK2 and Its Relevance for Virus Infection [W]
Authors: Ivanov Konstantin I. , Puustinen Pietri , Gabrenaite Rasa , Vihinen Helena , Rönnstrand Lars , Valmu Leena , Kalkkinen Nisse , Mäkinen Kristiina
Published: September 2003

We reported previously that the capsid protein (CP) of Potato virus A (PVA) is phosphorylated both in virus-infected plants and in vitro. In this study, an enzyme that phosphorylates PVA CP was identified as the protein kinase CK2. The α-catalytic subunit of CK2 (CK2α) was purified from tobacco and characterized using in-gel kinase assays and liquid chromatography–tandem mass spectrometry. The tobacco CK2α gene was cloned and expressed in bacterial cells. Specific antibodies were raised against the recombinant enzyme and used to demonstrate the colocalization of PVA CP and CK2α in infected tobacco protoplasts. A major site of CK2 phosphorylation in PVA CP was identified by a combination of mass spectrometric analysis, radioactive phosphopeptide sequencing, and mutagenesis as Thr-242 within a CK2 consensus sequence. Amino acid substitutions that affect the CK2 consensus sequence in CP were introduced into a full-length infectious cDNA clone of PVA tagged with green fluorescent protein. Analysis of the mutant viruses showed that they were defective in cell-to-cell and long-distance movement. Using in vitro assays, we demonstrated that CK2 phosphorylation inhibited the binding of PVA CP to RNA, suggesting a molecular mechanism of CK2 action. These results suggest that the phosphorylation of PVA CP by CK2 plays an important regulatory role in virus infection.
FtsH Is Involved in the Early Stages of Repair of Photosystem II inSynechocystissp PCC 6803 [W]
Authors: Silva Paulo , Thompson Elinor , Bailey Shaun , Kruse Olaf , Mullineaux Conrad W. , Robinson Colin , Mann Nicholas H. , Nixon Peter J.
Published: September 2003

When plants, algae, and cyanobacteria are exposed to excessive light, especially in combination with other environmental stress conditions such as extreme temperatures, their photosynthetic performance declines. A major cause of this photoinhibition is the light-induced irreversible photodamage to the photosystem II (PSII) complex responsible for photosynthetic oxygen evolution. A repair cycle operates to selectively replace a damaged D1 subunit within PSII with a newly synthesized copy followed by the light-driven reactivation of the complex. Net loss of PSII activity occurs (photoinhibition) when the rate of damage exceeds the rate of repair. The identities of the chaperones and proteases involved in the replacement of D1 in vivo remain uncertain. Here, we show that one of the four members of the FtsH family of proteases (cyanobase designation slr0228) found in the cyanobacterium Synechocystis sp PCC 6803 is important for the repair of PSII and is vital for preventing chronic photoinhibition. Therefore, the ftsH gene family is not functionally redundant with respect to the repair of PSII in this organism. Our data also indicate that FtsH binds directly to PSII, is involved in the early steps of D1 degradation, and is not restricted to the removal of D1 fragments. These results, together with the recent analysis of ftsH mutants of Arabidopsis, highlight the critical role played by FtsH proteases in the removal of damaged D1 from the membrane and the maintenance of PSII activity in vivo.
Transcript Profiling Coupled with Spatial Expression Analyses Reveals Genes Involved in Distinct Developmental Stages of an Arbuscular Mycorrhizal Symbiosis [W]
Authors: Liu Jinyuan , Blaylock Laura A. , Endre Gabriella , Cho Jennifer , Town Christopher D. , VandenBosch Kathryn A. , Harrison Maria J.
Published: September 2003

The formation of symbiotic associations with arbuscular mycorrhizal (AM) fungi is a phenomenon common to the majority of vascular flowering plants. Here, we used cDNA arrays to examine transcript profiles in Medicago truncatula roots during the development of an AM symbiosis with Glomus versiforme and during growth under differing phosphorus nutrient regimes. Three percent of the genes examined showed significant changes in transcript levels during the development of the symbiosis. Most genes showing increased transcript levels in mycorrhizal roots showed no changes in response to high phosphorus, suggesting that alterations in transcript levels during symbiosis were a consequence of the AM fungus rather than a secondary effect of improved phosphorus nutrition. Among the mycorrhiza-induced genes, two distinct temporal expression patterns were evident. Members of one group showed an increase in transcripts during the initial period of contact between the symbionts and a subsequent decrease as the symbiosis developed. Defense- and stress-response genes were a significant component of this group. Genes in the second group showed a sustained increase in transcript levels that correlated with the colonization of the root system. The latter group contained a significant proportion of new genes similar to components of signal transduction pathways, suggesting that novel signaling pathways are activated during the development of the symbiosis. Analysis of the spatial expression patterns of two mycorrhiza-induced genes revealed distinct expression patterns consistent with the hypothesis that gene expression in mycorrhizal roots is signaled by both cell-autonomous and cell-nonautonomous signals.
A Novel WRKY Transcription Factor, SUSIBA2, Participates in Sugar Signaling in Barley by Binding to the Sugar-Responsive Elements of theiso1Promoter [W]
Authors: Sun Chuanxin , Palmqvist Sara , Olsson Helena , Borén Mats , Ahlandsberg Staffan , Jansson Christer
Published: September 2003

SURE (sugar responsive) is a cis element in plant sugar signaling. The SURE element was reported first for potato, in which it confers sugar responsiveness to the patatin promoter. A SURE binding transcription factor has not been isolated. We have isolated a transcription factor cDNA from barley and purified the corresponding protein. The transcription factor, SUSIBA2 (sugar signaling in barley), belongs to the WRKY proteins and was shown to bind to SURE and W-box elements but not to the SP8a element in the iso1 promoter. Nuclear localization of SUSIBA2 was demonstrated in a transient assay system with a SUSIBA2:green fluorescent protein fusion protein. Exploiting the novel transcription factor oligodeoxynucleotide decoy strategy with transformed barley endosperm provided experimental evidence for the importance of the SURE elements in iso1 transcription. Antibodies against SUSIBA2 were produced, and the expression pattern for susiba2 was determined at the RNA and protein levels. It was found that susiba2 is expressed in endosperm but not in leaves. Transcription of susiba2 is sugar inducible, and ectopic susiba2 expression was obtained in sugar-treated leaves. Likewise, binding to SURE elements was observed for nuclear extracts from sugar-treated but not from control barley leaves. The temporal expression of susiba2 in barley endosperm followed that of iso1 and endogenous sucrose levels, with a peak at ∼12 days after pollination. Our data indicate that SUSIBA2 binds to the SURE elements in the barley iso1 promoter as an activator. Furthermore, they show that SUSIBA2 is a regulatory transcription factor in starch synthesis and demonstrate the involvement of a WRKY protein in carbohydrate anabolism. Orthologs to SUSIBA2 were isolated from rice and wheat endosperm.
Ordered double perovskites – a group-theoretical analysis
Authors: Howard Christopher J. , Kennedy Brendan J. , Woodward Patrick M.
Published: August 2003

Group-theoretical methods are used to enumerate the structures of ordered double perovskites, A
2
BB′X
6, in which the ordering of cations B and B′ into alternate octahedra is considered in combination with the ubiquitous BX
6 (or B′X
6) octahedral tilting. The cation ordering on the B-cation site is described by the irreducible representation R_1^+ of the Pm \overline 3 m space group of the cubic aristotype, while the octahedral tilting is mediated by irreducible representations M_3^+ and R_4^+. There are 12 different structures identified, and the corresponding group–subgroup relationships are displayed. Known structures are briefly reviewed.
Mechanism of the morphotropic transformation between the rutile and corundum structural types
Authors: Katzke H. , Schlögl R.
Published: August 2003

The rutile/corundum structural transformation which is based on crystallographic shear is discussed in terms of a one-dimensional disorder model. The transformation process is described by a simple model based on the structural relationship between the rutile-type and corundum-type phases. The model is able to handle randomly spaced crystallographic shear planes, the so-called Wadsley defects, as well as clustered CS planes. Calculations hsow that simply modifying the probability parameters of the model can lead to phase segregation. X-ray powder diffraction patterns are calculated for the proposed transformation mechanism as a function of the stoichiometry x in MO2−x
in order to show the influence of such defects on the intensities and linewidths of the Bragg reflections.
Auditing and Corporate Governance—a Look Forward into the 21st Century
Authors: Percy J. P.
Published: August 2003

Auditors will be expected to disclose whether the accounts are true and fair, whether the company will fail, whether it is managed competently, whether it is run in accordance with the law, free of fraud, and whether it is adopting a responsible attitude to environmental and societal issues. Corporate governance developments, broader ranges of stakeholders for auditors to serve, requirements for assurance on softer, non‐financial measurements and developments in technological corporate reporting, are all demanding new forms of audit assurance services and of audit reporting. This in turn poses important challenges for international audit standard setters and for audit educators alike. While developments in global business and global capital markets have given international dimensions to many of the developments in corporate governance, there is not a complete consensus across the world.
Auditor Performance, Implicit Guarantees, and the Valuation of Legal Liability
Authors: Gietzmann Miles B. , Ncube Mthuli , Selby Michael J.P.
Published: August 2003

Liability exposure is now such a major concern for auditors that any discussion of equilibrium audit fee structures needs to take account of the expected costs of liability exposure. We develop a model of audit litigation risk and then proceed to apply insights gained from the application of finance theory to show how liability exposure is related to guarantee provision. Given auditors wish to incorporate the expected cost of guarantees when planning and pricing services, we apply contingent claims analysis to derive valuation equations for expected (litigation) costs. We then proceed to consider wider regulatory issues. Whereas the above analysis assumes stable legal liability rules, we subsequently consider the auditor incentive effects of parametric variation in the rules. Since the quality of audits is unobservable, we consider how the rules could be set so as to ensure auditors are not tempted to provide a low degree of care and collude with management. To illustrate the applicability of this approach we also consider whether recent proposals to reform auditor liability to a proportional basis will always provide appropriate incentives.
Economic Agency and Audit Committees: Responsibilities and Membership Composition
Authors: Lee Tom , Stone Mary
Published: August 2003

Committees, commissions, and regulatory authorities in the US, the UK, Canada and Australia have identified the corporate audit committee as a key component of effective corporate government. Categorizations of the responsibilities frequently assigned audit committees have been prepared by professional groups and by Wolnizer. However, evidence linking assigned responsibilities to the experience backgrounds of audit committee members has not previously been provided. Statements in international accounting firm publications indicate that to function effectively some audit committee members should have backgrounds in financial reporting, accounting, or auditing. The current study uses data that are publicly available to investors and others to document assigned committee responsibilities and the membership backgrounds of the audit committees of large US multinational enterprises. It provides competing explanations of the proportion of audit committee members with instrumental experience (i.e. technical skills to relate to accounting, auditing and control issues). The results indicate that the backgrounds of the chief executive officer and the audit committee chair help to explain the proportion of members with instrumental experience, while the breadth and technicality of assigned responsibilities, multinational and domestic complexity, leverage, and asset structure do not. Because these results appear to be inconsistent with the agency costs paradigm that has guided much of published research on monitoring and controls, suggestions for future research to clarify the relation between assigned audit committees responsibilities and membership background are provided.
Auditors' Responses to Emerging Issues: A UK Perspective on The Statutory Financial Auditor and the Environment
Authors: Collison David , Gray Rob
Published: August 2003

The relevance of environmental issues for financial reporting and financial auditing is a matter of concern for many individual accountants and auditors, and for professional bodies and regulatory agencies in the UK and elsewhere. This paper reports on a large scale survey of audit practitioners in the UK which was part of a project funded by the Institute of Chartered Accountants in England and Wales. The questionnaire investigated auditors' experience of the issues and any actions that they may have taken in response to them. The survey also sought opinions about (1) the need for professional guidance and regulation in the fields of financial accounting and auditing and (2) a possible wider role for the financial auditor in the verification of environmental reports. Two quite distinct populations were surveyed: half the questionnaires were sent to offices of ‘large’ firms (drawn from the approximate top 100 in terms of fee income), and half were sent to a random sample of other firms listed in the ICAEW directory. These groups have been further subdivided for parts of the analysis and firm size was found to be significantly related to responses in some, though not all, areas. In particular, the results suggest that some firms may be at risk of giving insufficient attention to the financial implications of environmental issues. A clear majority of respondents thought that the environmental awareness of auditors needed to be raised but opinions were more evenly divided on the need for regulation.
Taking Responsibility: The Early Demand for Institutional Action to Define an Auditor's Duties
Authors: Chandler Roy A.
Published: September 2003

The potential conflict between public and private interests in the audit function dates back to the early days of the organized profession. Membership of a professional body was intended to demonstrate not only the competence but also the honour of an individual practitioner. A possible role of a professional accounting association is to protect their members' interests by issuing some form of official pronouncements to guide both suppliers and customers of auditing services. However, for a variety of reasons the accounting bodies during the nineteenth century were reluctant to promulgate standards or guidance, in spite of clear signs of a demand from various quarters, including their own members.
Is Auditor Moral Hazard the Only Reason to Ban Contingent Fees for Audit Services?
Authors: De Sankar , Sen Pradyot K.
Published: September 2003

In most countries, auditors are banned from accepting a report contingent fee from their clients. The main reason for this ban might be that such contingent fees would compromise auditor independence by motivating the auditors to issue an unjust favourable report. In this paper we argue that in addition, in a market characterized by information asymmetry, allowing favourable reports to command higher fees, would compromise the informational efficiency of the market by making separation of firm types more difficult. We arrive at our conclusion through a model where informed managers appoint auditors to signal their true value. We analyse the resulting equilibria of the signalling game and argue that the Differentiated Semi‐Separation (DSS) equilibrium is the most intuitive and interesting one. Our main results are presented through three examples.
Auditors' Use of Inconsistent Evidence
Authors: Maroney James J. , Bedard Jean C.
Published: September 2003

Analytical procedures are an important audit tool worldwide (ISA 520, SAS 56). Auditors use analytical procedures to develop explanations for unexpected changes in accounts, and evaluate those explanations on the basis of further audit evidence. Research has found that people have difficulty using evidence inconsistent with proposed explanations, and thus may accept explanations that are false. The purpose of this paper is to study how auditors treat evidence inconsistent with analytical procedures explanations. Practising auditors at three levels of experience completed a two‐stage task, generating explanations for an initial set of financial information and then revising their explanation list after receiving an expanded information set. Decision processes were captured through verbal protocols. Process analysis showed that the ability to evaluate evidence varied by experience level. Managers and seniors were better than assistants at recognizing inconsistent evidence, while managers outperformed other experience levels in integrating inconsistent evidence. Further, managers generated more and better explanations than other ranks after encountering new information. The implications for auditing research and practice are discussed.
Watchdogs or Straw Dogs? A Critical Appraisal of the UK Regulatory Framework with Respect to (Non‐)Compliance with Financial Reporting Standard No. 1
Authors: Jupe Robert E. , Rutherford Brian A.
Published: September 2003

The objective of this paper is to appraise the UK regulatory framework by focusing on the statutory financial audit and its role in testing companies' (non‐)compliance with a new financial reporting standard (FRS1). The analysis is based on a large‐scale survey of the cash flow statements required by FRS1 in company accounts along with the audit reports of each company. The survey reveals that significant variations in the standard format for cash flow statements were allowed without any audit comment. The study concludes by raising causes for concern about the UK regulatory framework, and arguing that the objective of FRS1 was not fully achieved because of the wide variations in the standard format produced by companies. It suggests that a solution to the concerns raised is to increase the use of comments in audit reports by restoring the ‘emphasis of matter’ principle.
Auditors' Use and Perception of Analytical Procedures: Evidence from Singapore
Authors: Mahathevan Premila
Published: September 2003

This study examines auditors' use and perception of analytical procedures in Singapore. A total of 100 auditors attached to Big‐Six and non‐Big Six firms participated in this questionnaire survey. Three‐way ANOVA with interactions is performed on the data. The results of the study indicate that analytical procedures (APs) are more prevalently used during the final review stage as opposed to the detailed testing phase of an audit. Further, auditors with high experience and auditors from Big‐Six firms tend to use APs to a greater extent than those with low experience and from non‐Big Six firms respectively. Simple procedures are more frequently used than sophisticated procedures by all auditors although between the procedures, non‐Big Six auditors use the former more frequently than Big‐Six auditors while the reverse is true for the latter. Finally, APs were found to be least helpful in detecting fraud or error and most helpful in identifying areas of potential risk.
Factors Affecting the Assessment of the Quality of a Company's Auditors: The Case of the Czech Republic
Authors: Sucher Pat , Moizer Peter , Zarova Marcela
Published: September 2003

The requirement to have a corporate audit in the Czech Republic was implemented in 1992. This article summarizes the results of a questionnaire about auditing quality that was circulated to Czech enterprises in early 1996. There were 451 responses to the questionnaire from a broad selection of enterprises. Over 65% of respondents were happy with the audit service received. Statistical analysis of the questionnaire results indicated that personal contact with advisors from the audit firm and how long the respondent had known the auditors had the most positive influence on overall perceptions of audit quality among preparers. The only audit firm where there seemed to be a significant association between the name of the audit firm and perceptions of audit quality was KPMG. The analysis indicated that those respondents to the questionnaire who were part of overseas enterprises had a more critical view of audit quality in the Czech Republic.
The Effect of Time Pressure on Auditors' Configural Information Processing
Authors: Choo Freddie , Firth Michael
Published: September 2003

This research investigates the effect of time pressure on auditors' configural information processing in light of the pervasiveness of time pressure in the real world auditing situation and in light of the available cognitive psychology findings that suggest configural information processing is time dependent. We hypothesize that if auditors do not have sufficient time to retrieve specific patterns of cue interactions from their knowledge structures, they will not be in a position to invoke configural information processing. We further hypothesize that auditors will invoke a variety of cognitive simplification strategies under time pressure. The net effect of these cognitive simplification strategies is that the auditors' judgements will be made based on decreasing weights given to interactive terms. Our experiment confirms the absence of configural information processing among auditors under time pressure. The findings also directionally support the hypothesis that the variance accounted for by the interaction terms will diminish under time pressure due to cognitive simplification strategies.
Characteristics of Firms that Include an Audit Committee Report in Their Annual Report
Authors: Turpin Richard A. , DeZoort F. Todd
Published: September 2003

This study examines the characteristics of a sample of US firms that voluntarily include a separate audit committee report (ACR) in their annual report to shareholders. We investigated whether inside ownership, leverage, proportion of outside directors, size, and stock exchange affect the decision to provide an ACR. In addition, we conducted a survey of the companies that prepare ACRs and examined the content of these ACRs to determine the information they contained. Our results confirm that very few firms include an ACR in their annual report to shareholders and suggest firms that prepare an ACR are larger than firms that do not. In addition, our results suggest management is generally responsible for the decision to include a separate ACR in the annual report. Finally, most ACRs appear to be written in a format that mirrors or closely resembles the Treadway Commission (1987) model ACR. Implications for future research in the area are also discussed.
Audit Committees in Private and Public Sector Corporates in New Zealand: An Empirical Investigation
Authors: Porter Brenda A. , Gendall Philip J.
Published: September 2003

This study sought to ascertain the incidence of audit committees in private and public sector corporates in New Zealand; the reasons for their adoption; their membership, administration and functions; disclosures relating to audit committees in annual reports; the attributes likely to enhance audit committees' effectiveness; and their perceived advantages and disadvantages. To accomplish this a mail survey was conducted amongst external auditors, internal auditors, chairpersons of significant private and public sector entities, and financial statement users.

The survey found that about 60% of significant private and public sector corporates had audit committees, that these committees are expected to play a broad governance role, and that key players in the corporate arena support them strongly. However, it also found that the effectiveness of audit committees could be increased by having their objectives and responsibilities clearly defined in a written statement, and by disclosing their existence, membership and objectives in corporate annual reports.
Environmental Auditing: Concepts, Methods and Developments
Authors: Hillary Ruth
Published: September 2003

Environmental auditing is most frequently thought of as an environmental management tool employed by businesses to facilitate better management of their environmental performance. The purpose of this paper is to investigate the origins and development of environmental auditing as a key management technique and as a self regulatory tool thought to have emerged in response to greater public and business awareness of environmental issues. Although environmental auditing is not precisely defined, a growing consensus around a broad group of criteria suggests that a number of audit types fall under the umbrella term. Conversely some activities exist which are inappropriately referred to as environmental audits. Some voluntary environmental codes specifically mention environmental auditing but these codes appear to be undersupported by businesses and seem to lack credibility. Ensuring the credibility of environmental audits with interested stakeholders may be assisted by external independent assessment of the process. Environmental auditing uniqueness appears to arise from the breadth of subjects covered in the process, the range of measurements and different types of data collected and the skills required to undertake an environmental audit, rather than the techniques employed.
Learning from Mistakes?: Using Corporate Scandals to Enhance Audit Teaching
Authors: Hughes Jane Frecknall , Humphrey Christopher , Turley Stuart
Published: September 2003

This paper examines the introduction of a case‐based method of teaching auditing on courses for final year undergraduates. Set against the context of recent proclamations about the need to reform or change undergraduate accounting programmes, this method seeks to enhance students' understanding of the conflict‐ridden world of auditing by requiring them to investigate and report on particular contemporary and historic corporate scandals.

The paper reviews the structure, aims and objectives of the course, the selection of the scandals and the methodology required in terms of completing the assignment. It explores the process of implementation and highlights several educational benefits and the possibilities for development in relation to other courses. In particular, the paper challenges claims that corporate scandals are not an appropriate educational vehicle due to their complexity or unrepresentativeness of general audit practice.
The Assessment and Integration of Materiality and Inherent Risk: An Analysis of Major Firms' Audit Practices
Authors: Martinov Nonna , Roebuck Peter
Published: September 2003

This study focuses on how inherent risk and materiality assessments are made and how they are integrated in the planning of audit testing. Both of these assessments are an integral part of the audit planning process under the current ‘audit risk model’.

The analysis of audit manuals, other relevant decision aids and interviews with the technical partner or manager from each of the ‘Big 6’ accounting firms in Australia provided the source of data for the study. The findings indicate a diversity in firms' approaches to adopting the overall risk model framework, the inherent risk and control risk concepts and the levels at which these are assessed. Similarly, although all the firms set an overall planning materiality, diversity exists in relation to the level of guidance and judgment involved, the actual guidelines used, and the utilization of additional materiality levels such as an account level materiality. The firms' practices of integrating materiality and inherent risk are also diverse and the linkage is generally implicit rather than explicit. These findings are significant in terms of potential efficiency and effectiveness implications between different firms' practices.
An Analysis of Efficiency and Effectiveness of Auditing to Detect Management Fraud: A Signal Detection Theory Approach
Authors: Deshmukh Ashutosh , Karim Khondkar E. , Siegel Philip H.
Published: September 2003

The purpose of this paper is to apply Signal Detection Theory (SDT) to the problem of detecting management fraud. The use of SDT methodology significantly strengthens our understanding of the relationships among audit technology, base rates of management fraud, costs of Type I and Type II errors, extensions of audit procedures, and risk assessments prior to and during the audit. The analysis indicates that the auditor must accept disproportionate false alarm rates in order to maintain audit effectiveness in the presence of management fraud. This condition becomes even stronger as the costs of Type II errors increase compared to costs of Type I errors. The study provides policy implications for auditor practice and standard‐setters.
Voluntary Disclosures in Corporate Audit Reports: A Nigerian Case Study (1978–1989)
Authors: Okike Elewechi N.M.
Published: September 2003

This paper reports the results of an examination of the audit reports on each of 45 large listed companies for the period 1978–1989. The results reveal that these audit reports contained other information besides those mandated by statute. The paper also provides evidence about the extent to which IFAC's rules are gaining international acceptance within the context of a developing economy. The findings are that audit reporting in Nigeria from 1978 to 1989 was greatly influenced by external factors such as (i) the standards issued by organisations such as the IFAC and the IASC; (ii) the affiliation of auditors in Nigeria with one of the ‘Big 6’ international accounting firms; and (iii) the multinationality of the reporting entities. The implications of non‐standardisation of audit reporting for the profession in Nigeria are also discussed.
The Impact of SAS No. 82 on Perceptions of External Auditor Responsibility for Fraud Detection
Authors: DeZoort F. Todd , Lee Thomas A.
Published: September 2003

This study evaluates whether perceptions of external auditor responsibility to detect fraud in US financial statement audits are greater under Statement on Auditing Standards (SAS) No. 82 than under the superseded SAS No. 53. A series of four fraud vignettes were evaluated by external auditors, internal auditors, and fraud examiners who were either given a summary of the new standard or the old standard to assess auditor fraud detection responsibilities. The vignettes manipulated fraud materiality and fraud type (i.e. fraudulent financial reporting and misappropriation of assets) within‐subject. The results provide consistent evidence that perceptions of external auditor responsibility to detect fraud are higher under SAS No. 82 than under SAS No. 53. In addition, the results indicate that the external auditors' perceptions increased more than the perceptions of the internal auditors and fraud examiners. Finally, the findings revealed that while all participant groups were sensitive to fraud materiality, only the external auditors were sensitive to fraud type.