bluuebunny/crossref_metadata_2025 huggingface dataset:
Endovenous laser ablation: an experimental study on the mechanism of action
Authors: Disselhoff B C V M , Rem A I , Verdaasdonk R M , Kinderen D J der , Moll F L
Published: March 2008

Objectives

The aim of this experimental study was to investigate the mechanism of action of endovenous laser ablation (EVLA) using an 810-nm diode laser.

Methods

We compared intermittent and continuous delivery of laser energy and studied the absorption of laser light by blood, intravascular temperatures in ex vivo human vein segments using an intravascular thermography catheter and heat dissipation in a model tissue using the Schlieren technique.

Results

Laser light is absorbed by blood and converted to heat leading to coagulation, vaporization and carbonization, and forming an isolating layer at the fibre tip. Laser energy is then absorbed into the isolating layer forming black patches that burned on the laser fibre. Intravascular temperature increased rapidly above carbonization temperatures (300°C) after the fibre tip reached the thermocouple, stayed at this temperature for a few seconds and decreased gradually to around 30°C, 10 s after the fibre tip passed the thermocouple. Schlieren techniques revealed that heat spread from the laser was locally distributed and closely around the laser fibre tip while heat dissipation is minimal and comparable for both exposures. Compared with intermittent exposure, continuous exposure results in more carbonization, higher mean maximum intravascular temperature (128 ± 7 vs. 75 ± 4°C), and long-lasting temperature of 100°C (1.2 ± 0.4 vs. 0.1 ± 0.1 s).

Conclusion

In this experimental study, application of endovenous laser shows to be dominated by carbonization at the fibre tip. Although intraluminal laser-induced heat was heterogeneously distributed, with laser tip temperatures up to 1200°C, heat dissipation was minimal. Continuous exposure of laser light appears to be better suited in EVLA than intermittent.
Microfluidic Leukocyte Isolation for Gene Expression Analysis in Critically Ill Hospitalized Patients
Authors: Russom Aman , Sethu Palaniappan , Irimia Daniel , Mindrinos Michael N , Calvano Steve E , Garcia Iris , Finnerty Celeste , Tannahill Cynthia , Abouhamze Amer , Wilhelmy Julie , López M Cecilia , Baker Henry V , Herndon David N , Lowry Stephen F , Maier Ronald V , Davis Ronald W , Moldawer Lyle L , Tompkins Ronald G , Toner Mehmet ,   the Inflammation and Host Response to Injury Large Scale Collaborative Research Program
Published: March 2008

Background: Microarray technology is becoming a powerful tool for diagnostic, therapeutic, and prognostic applications. There is at present no consensus regarding the optimal technique to isolate nucleic acids from blood leukocyte populations for subsequent expression analyses. Current collection and processing techniques pose significant challenges in the clinical setting. Here, we report the clinical validation of a novel microfluidic leukocyte nucleic acid isolation technique for gene expression analysis from critically ill, hospitalized patients that can be readily used on small volumes of blood.

Methods: We processed whole blood from hospitalized patients after burn injury and severe blunt trauma according to the microfluidic and standard macroscale leukocyte isolation protocol. Side-by-side comparison of RNA quantity, quality, and genome-wide expression patterns was used to clinically validate the microfluidic technique.

Results: When the microfluidic protocol was used for processing, sufficient amounts of total RNA were obtained for genome-wide expression analysis from 0.5 mL whole blood. We found that the leukocyte expression patterns from samples processed using the 2 protocols were concordant, and there was less variability introduced as a result of harvesting method than there existed between individuals.

Conclusions: The novel microfluidic approach achieves leukocyte isolation in <25 min, and the quality of nucleic acids and genome expression analysis is equivalent to or surpasses that obtained from macroscale approaches. Microfluidics can significantly improve the isolation of blood leukocytes for genomic analyses in the clinical setting.
Sill Pan Flashing for Block-Frame Windows in Recessed Concrete Openings—Case Studies
Authors: Bateman Robert
Published: March 2008

Integrating sill pan window flashing can be challenging using block-frame windows or installing flashings within a recessed opening in a concrete wall. Two case studies summarize the details of design and retrofit installation for sill pan flashing of replacement block-frame window into the perimeters of existing recessed concrete wall openings. Provisions for sill pan drainage were included with technical solutions for two case studies. The design and detailing were also conceived to account for blending with the context of the existing architecture and minimizing the aesthetic concerns for the appearance of any exposed perimeter opening flashings. These case studies demonstrate detailing methodologies for wood and metal block-frame window frames and concrete wall openings applicable for new and existing exterior wall systems.
Characterization of Zirconium Hydrides and Phase Field Approach to a Mesoscopic-Scale Modeling of Their Precipitation
Authors: Zhao Z. , Blat-Yrieix M. , Morniroli J.-P. , Legris A. , Thuinet L. , Kihn Y. , Ambard A. , Legras L.
Published: March 2008

Zirconium alloys are currently used in nuclear power plants where they are submitted to hydrogen pick-up. Hydrogen in solid solution or hydride precipitation can affect the behavior of zirconium alloys during service but also in long term storage and in accidental conditions. Numerical modeling at mesoscopic scale using a “phase field” approach has been launched to describe hydride precipitation and its consequences on the mechanical properties of zirconium alloys. To obtain realistic results, it should take into account an accurate kinetic, thermodynamic, and structural database in order to properly describe hydride nucleation, growth, and coalescence as well as hydride interaction with external stresses. Therefore, an accurate structural characterization was performed on Zircaloy-4 plates and it allowed us to identify a new zirconium hydride phase called ζ. The ζ phase has a trigonal symmetry and is fully coherent with hcp αZr. The consequences of this new zirconium hydride phase on hydride transformation process and stress-reorientation phenomenon are discussed. A first attempt to numerically model the precipitation of this new zirconium hydride phase has been undertaken using the phase field approach.
That Which is Taught, That Which is Learned
Authors: Ratner Andrew R.
Published: March 2008

There is a transcendent force at work in the world, and its design for learning and life is far too complex to be executed through lesson plans and textbooks. In this article, the author describes a phone call from a student he taught in a high school English class 16 years earlier and has not seen since. After the student reveals how his life was altered by a particular lesson the author taught on The Merchant of Venice, the author reflects on the nature of teaching and learning. The author concludes that despite the current focus on scientifically validated curricula and measurable learning outcomes, educators should remain open to mystery in classroom instruction and be aware that a teacher's impact on students can take highly unanticipated turns.
The Road Not Yet Taken: A Transactional Strategies Approach to Comprehension Instruction
Authors: Brown Rachel
Published: March 2008

Previous research indicates that a transactional strategies instruction (TSI) approach to teaching comprehension strategies improves students' reading on standardized tests and other reading measures. However, to date, TSI is not prevalent in schools. The purpose of this article is to provide a more detailed description of the approach, to report research on instructional differences between TSI and non‐TSI teachers, and to explain how teachers can integrate the approach and their current reading instruction.
The Shape of Direct Quotation
Authors: Weber Rose‐Marie
Published: March 2008

Direct quotation can be a source of meaning in storybook texts for beginning readers. The author of this article sketches the linguistic complexity of direct quotation and offers instructional strategies. Three aspects of direct quotation are examined: the cluster of print features and syntactic characteristics that direct quotation involves, the prosodic qualities that direct quotation calls for in oral reading, and the semantic links, especially pronouns, between the speakers in the text and what they say.
Spelling in Parts: A Strategy for Spelling and Decoding Polysyllabic Words
Authors: Powell Debbie A. , Aram Roberta
Published: March 2008

The Spelling in Parts strategy can enhance children's ability to spell and decode multisyllabic words. The strategy, which can be taught in any systematic spelling program, combines phonemic awareness, the study of common orthographic patterns, visualization, and recognition of morphemic units such as roots, prefixes, and suffixes. The authors provide several classroom scenarios to illustrate this teaching and learning technique.
Beyond Stories
Authors: Rasinski Timothy , Padak Nancy
Published: March 2008

This column explores various types of texts that are appropriate for home reading between adults and children.
Innovative Gas Shutoff Method Using Heavy Oil-in-Water Emulsion
Authors: Zeidani K. , Polikar M.
Published: March 2008

Laboratory investigations were conducted to examine the effectiveness of heavy oil-in-water emulsion in plugging the near wellbore matrix, thereby reducing gas (and water) coning or eliminating gas leakage to the surface. Experiments at micro- and macro-scale levels were performed to: a) provide a detailed understanding of emulsion flow and blocking mechanism, b) set criteria for controlling an emulsion penetration depth before it breaks down and seals a porous medium.

In these experiments, well-characterized oil-in-water emulsions were injected into etched-glass micro-models and micro-models packed with glass beads. The effect of droplet-to-pore size ratio, droplet stability, oil and surfactant type and concentration were studied through visualization experiments. It was observed that blockage happened because of size exclusion. Also, the blockage was accelerated due to droplets coalescence as a result of high shear rate or surfactant adsorption on the porous medium. Furthermore, emulsion droplet size distribution, emulsion viscosity and oil droplets-to-water interfacial tensions increased as the surfactant content decreased, resulting in higher capillary pressure across the trapped oil droplet.

The effect of oil type, rock permeability, injection velocity, and wettability alteration were also studied. The results showed that emulsions carrying more viscous oils could resist higher pressures due to the combined effects of capillarity and viscosity. Also, conditioning the medium with pre-flush solutions predictably affected the depth to which an emulsion may penetrate into a porous medium. Surfactant and alkaline-based pre-flush solutions may enhance an emulsion penetration depth significantly. However, the emulsion may break down and emplace at a desired depth within a porous medium as a result of applying low pH solutions. Unconsolidated cores withstood 42,500 kPa/m (1,880 psi/ft) for a long period of time. Emulsions were optimized to seal cores with different permeabilities for the purpose of field application.

A novel cost-effective sealant that uses heavy oil-in-water emulsion to block the near wellbore region has been developed. Emulsion flow behavior and methods controlling its propagation rate into a porous medium will be presented.
The PUT River, Appraisal and Development of a Minor Reservoir within the Prudhoe Bay Field, North Slope, Alaska
Authors: Panda Manmath , Dean James , Pietras Jeff , Wheeler Tammy , Sels Roger
Published: March 2008

PUT River formation is an early Cretaceous reservoir in the North Slope, Alaska. Stratigraphically it lies above the Lower Cretaceous Unconformity (LCU) and below the Highly Radioactive Zone (HRZ). The reservoir sands are near shore face to shallow marine deposits with heavy bio-turbation.

In the Prudhoe Bay Field the PUT River reservoir overlays the Sadlerochit interval, the main producing horizon. A number of the Prudhoe Bay development wells penetrate the PUT River reservoir and provide well control for defining the areal extent and thickness of the reservoir.

Four lobes of the PUT River were appraised by recompleting existing Sadlerochit wells that penetrated PUT River. The oil filled south-east lobe is the target of the current development plan. A key uncertainty of the development plan was the transmissibility across the faults.

Three dimensional (3D) stochastic reservoir models were constructed and matched with the appraisal production data to determine the OOIP. VIP simulation models were generated to construct a development plan for this reservoir to determine the ultimate recovery. Significant uncertainties remained with regards to (1) location, number and type (horizontal vs vertical) of injectors, (2) number of producers to use, (3) geologic properties (in terms of correlation length and direction and facies distribution), and (4) fault transmissibility that could impact the choice of the plan of development (POD).

To select the optimal POD in terms of ultimate recovery a Top Down Reservoir Modeling1 (TDRM™) process was set up. Several 3D models were generated to cover the geologic uncertainty. The TDRM™ process analyzed 960 discrete combinations of the above parameters. An optimal POD was selected from the analysis of the results. The range of possible recovery outcomes was also more clearly quantified.

A development plan consisting of 1 horizontal injection well and 2 recompleted producing wells was chosen with an option to use two additional producers in the future. The injection well was drilled in early 2006 and the Southern Lobe of the PUT River began production in late 2006.
Optimizing Downhole Fluid Production of Sucker Rod Pumps Using Variable Motor Speed
Authors: Palka Krzysztof , Czyz Jaroslaw A.
Published: March 2008

Reciprocating oil pumps are traditionally operated by prime movers rotating at a constant speed. This paper demonstrates that by rapidly changing motor speed within a single stroke pump production can be increased while stresses in the sucker rod and motor energy consumption are reduced. The optimal motor speed profile is determined by representing the motor speed with Fourier series and searching for such Fourier coefficients that maximize the production while satisfying the imposed constraints on stresses in the rod and on energy consumption. The pump performance parameters required in the optimization process, such as fluid production, stresses in the rod and motor torque resulting from a given variable motor speed are calculated using a predictive analysis. The analysis is based on a comprehensive dynamic model of the entire pumping system comprising both surface and downhole equipment.

During, and beyond a minimum 6 month field validation period the calculated optimal speed profile has been applied to control the movement of over 20 pumps currently operating in Alberta, Canada. The resulting increased production and lower operating cost clearly confirmed the benefits of implementing a variable speed of the prime mover to improve pump performance. Presented examples demonstrate an increase of up to 133% in production without increasing energy consumption or loads in the system. Similar results as with beam pumps can be achieved for hydraulically actuated pumps by applying variable flow rate or pressure to induce the calculated optimal polished rod velocity.
A Novel Corrosion Resistant Internal Coating Method Using Hollow Cathode PECVD Technology with Improved Hardness
Authors: Boardman Bill , Bonapolly Karthik , Upadhayaya Deepak , Casserly Tom
Published: March 2008

A novel technology developed for coating the internal surfaces of parts from small components to production pipe will be described. The coating is appropriate for use in many environments for corrosion, erosion and wear reduction. The process technology that enables the coating of interior surfaces with a hard, wear and corrosion resistant DLC layer will be described. Additionally the development of improved hardness of the DLC will be decribed, based on the selection of precursor and process parameters hardness of > 25GPa has been achived while maintaining a high deposition rate.
The Use of Pulsed Neutron Measurements for Determination of Bypassed Pay: A Multiwell Study
Authors: May Dale H. , Grant Jeffery , Pinto Keith Thomas
Published: March 2008

Pulsed neutron measurements have been used since the early 1960s to measure porosity and sigma through casing. Since the formation sigma response is proportional to the salinity of the formation water, pulsed neutron measurements are used to determine porosity and water saturation behind pipe.

In parts of west Texas and southern California, it is common to use through-casing pulsed neutron measurements for water and CO2 flood monitoring. By comparing time-lapse pulse neutron data, it is possible to determine changes over time in water, gas, and oil saturations.

The concepts and methodologies that allow time lapsed pulsed neutron measurements to be used for water and CO2 flood monitoring can be used to identify bypassed pay in fields that have been under only primary production.

In water and CO2 floods, the base pulsed neutron measurement is compared over time with subsequent pulsed neutron measurements. The changes in the pulsed neutron porosity and sigma measurements are related to changes in oil, gas, and water saturations.

Most producing wells do not have base pulsed neutron measurements. Many of these wells do have porosity and resistivity measurements that were acquired prior to setting casing.

There are many challenges faced when attempting to incorporate various pulsed neutron measurements with the original porosity and resistivity measurements for a consistent evaluation. This paper will present the methodology of incorporating the present day pulsed neutron measurements, with the original porosity and resistivity measurements into a comprehensive petrophysical model. This model will solve simultaneously for the original hydrocarbon in place, along with the current hydrocarbon in place.

This paper will show how the combination of pulsed neutron measurements and original open hole log data, on a multi-well basis, was used to identify bypassed hydrocarbons.

The bypassed pay was used to design a recompletion program and resulted in significant increases in both produced hydrocarbon and proven reserves of hydrocarbon.

Based on the increase of hydrocarbons found by bypassed pay analysis a re-completion program was designed and put into action that resulted in an increase of produced hydrocarbons and proven reserves of hydrocarbons.
Consequence of Thermophysical Approximations on Upstream Calculations: A Case Study
Authors: Pasala Sangeetha , Sen Sabyasachi , Gummadi Srividya , Kirchner Mike
Published: March 2008

Until recently, most Oil&Gas companies employed a combination of decentralized manual and computer-based methods, to meet their upstream calculation needs. Some of the majors even developed powerful in-house programs tailored to processes of interest. Recently, however, third-party computer applications (simulators) have become the de facto standard for most industry-wide calculations.

The quality of results obtained from a simulator depends strongly on simple semi-empirical thermophysical methods at its core. Most thermophysical methods implemented in the simulators have limited applicability, typically because these methods need to be simple to ensure robustness and speed, at the expense of accuracy. The other common limitation is the scarcity of measured data to validate model parameters. Typically, these simple models are unable to span wide ranges in pressure, temperature and composition (PTx), often encountered in upstream processes.
Heat Management in Steam floods Without the Use of Temperature Observation Wells
Authors: Haroun Muhammad , Ershaghi Iraj
Published: March 2008

Heat management to reduce operational cost requires drilling of and routine monitoring of temperature obsrervation wells. There are cases where because of economics and environmental restrictions, drilling of observation wells may not be feasible or practical. The particular point of focus are some heavy oil reservoirs such as those in the Middle East where the drilling of observation wells are cost prohitive. Using advances in downhole sensors for continous recordings of temperatures in producing wells, one can track the average in-situ temperatures from the production and the injection temperatures and use those estimates as a monitoring tool. Relating producing well's temperatures to average reservoir temperature and injection temperature may be done, depending on the well placement and reservoir geometry, through various formulations such as the Lauwerier1 or the Marx Langenheim2. Characteristics of heavy oil viscosity-temperature correlations can then serve as a basis to select producing temperatures when one can reduce steam input to levels that maintain the required fluid temperatures in the reservoir without overdoing the heat input. Optimum injection rates and incremental heat input into the reservoir can be estimated such that the temperature of produced fluid is maintained at a pre-set condition. We have tested the concept and feasibility of the proposed method with a commercial simulator, for oil gravities ranging from 10 - 14 °API.
Case-Based Reasoning Approach for Well Failure Diagnostics and Planning
Authors: Popa Andrei , Popa Carrie , Malamma Mike , Hicks John
Published: March 2008

Case-based reasoning, also known as computer reasoning by analogy, is a simple and practical technique that solves new problems by comparing them to ones that have already been solved in the past, thus saving time and money. The technique constantly incorporates dynamic data, which empowers the system to learn and adapt from new experiences. A general framework for case-based reasoning is presented, along with a review of the four-step cycle that characterizes the technology: retrieve, reuse, revise and retrain.

This paper presents a specific application of case-based reasoning to determine the optimum cleaning technique (bailing, washback, or foaming) for sanded/seized well failures. The methodology extracts only the most relevant information from the historical database, utilizes a rule-based system to make adaptations, and then suggests the most appropriate solution for a given well intervention. This technique was used for production operations as a front end tool for well workover planning and design and was applied to sample data from a large oil field where the main artificial lift system is rod pump. This simple case demonstrates how case-based reasoning can be applied to improve the planning and execution of well interventions, thus reducing cost, rig time, and well turnaround time, while maximizing reliability and production.
Implementing Residual Income Valuation With Linear Information Dynamics
Authors: Myers James N.
Published: March 2008

Residual income (RI) valuation is a method of estimating firm value based on expected future accounting numbers. This study documents the necessity of using linear information models (LIMs) of the time series of accounting numbers in valuation. I find that recent studies that make ad hoc modifications to the LIMs contain internal inconsistencies and violate the no arbitrage assumption. I outline a method for modifying the LIMs while preserving internal consistency. I also find that when estimated as a time series, the LIMs of Ohlson (1995), and Feltham and Ohlson (1995) provide value estimates no better than book value alone. By comparing the implied price coefficients to coefficients from a price level regression, I find that the models imply inefficient weightings on the accounting numbers. Furthermore, the median conservatism parameter of Feltham and Ohlson (1995) is significantly negative, contrary to the model's prediction, for even the most conservative firms. To explain these failures, I estimate a LIM from a more carefully modeled accounting system that provides two parameters of conservatism (the income parameter and the book value parameter). However, this model also fails to capture the true stochastic relationship among accounting variables. More complex models tend to provide noisier estimates of firm value than more parsimonious models.
Equity Valuation and Negative Earnings: The Role of Book Value of Equity
Authors: Collins Daniel W. , Pincus Morton , Xie Hong
Published: March 2008

This study provides an explanation for the anomalous significantly negative price-earnings relation using the simple earnings capitalization model for firms that report losses. We hypothesize and find that including book value of equity in the valuation specification eliminates the negative relation. This suggests that the simple earnings capitalization model is misspecified and the negative coefficient on earnings for loss firms is a manifestation of that misspecification. Furthermore, we provide evidence on three competing explanations for the role that book value of equity plays in valuing loss firms. Specifically, we investigate whether the importance of book value in cross-sectional valuation models stems from its role as (1) a control for scale differences (Barth and Kallapur 1996), (2) a proxy for expected future normal earnings (Ohlson 1995; Penman 1992), or (3) a proxy for loss firms' abandonment option (Berger et al. 1996; Barth et al. 1996; Burgstahler and Dichev 1997). Our results do not support the conjecture that the importance of book value in cross-sectional valuation stems primarily from its role as a control for scale differences. Rather, the results are consistent with book value serving as a value-relevant proxy for expected future normal earnings for loss firms in general, and as a proxy for abandonment option for loss firms most likely to cease operations and liquidate.
The Impact of Multiple Component Reporting on Tax Compliance and Audit Strategies
Authors: Rhoades Shelley C.
Published: March 2008

Prior studies of the strategic interaction between taxpayers and the tax authority have focused on reported net taxable income and on audit policies designed to discover potential misstatement of that single item. This paper extends the literature by modeling taxpayer compliance behavior and tax authority audit strategies within the context of a multidimensional report of taxable income. Specifically, the study analyzes the impact of component reporting requirements on taxpayer incentives to misstate their tax liability. It also allows the tax authority to tailor its audit policy to consider all tax return information. In particular, the model permits the tax authority to audit return components sequentially: the investigation of a second component is conditional on the results of the first component's audit. The study finds that partitioning taxable income into a multi-component report reduces overall tax evasion and increases tax authority net revenue collections relative to a singlereport model of net taxable income. However, the impact on predicted evasion is not uniform across taxpayers. While some taxpayers reduce evasion, others with multiple opportunities to evade are more likely to do so when faced with multi-component reporting requirements.
Pricing Initial Audit Engagements: A Test of Competing Theories
Authors: Craswell Allen T. , Francis Jere R.
Published: March 2008

Two competing theories of initial engagement audit pricing are examined empirically. DeAngelo's (1981a) model predicts initial engagement discounts in all settings, while Dye's (1991) model specifically predicts discounting will not occur in settings where audit fees are publicly disclosed. Unlike the United States and most countries, audit fees are publicly disclosed in Australia. Our study examines initial engagement pricing in Australia during a time period when comparable U.S. studies report discounts of 25 percent (Ettredge and Greenberg 1990; Simon and Francis 1988). The Australian evidence finds initial engagement discounting only for upgrades from non-Big 8 to Big 8 auditors. Discounting for upgrades to Big 8 auditors is consistent with economic theories of discount pricing by sellers of higher-priced, higher-quality experience goods as an inducement to purchase when uncertainty about product quality is resolved through buying (experiencing) the goods. The evidence in our study is generally consistent with Dye's (1991) conclusion that public disclosure of audit fees precludes initial engagement discounting and the potential independence problems arising from such discounting.
The Effect of Experience on the Use of Irrelevant Evidence in Auditor Judgment
Authors: Shelton Sandra Waller
Published: March 2008

Auditors encounter both relevant and irrelevant information during the performance of audit tasks. Prior studies have shown that the presence of irrelevant information weakens the impact of relevant information on auditors' judgments. Such studies, however, have not considered whether experience moderates the diluting effect of irrelevant information on auditors' judgments. This study reports the results of an experiment in which the effect of irrelevant information on the going-concern judgments of less-experienced auditors—audit seniors—is compared to the effect of irrelevant information on the going-concern judgments of more-experienced auditors—audit managers and partners. The experiment reaffirms that irrelevant information does have a diluting effect on the judgments of audit seniors but provides new evidence that irrelevant information does not have a diluting effect on the judgments of audit managers and partners.
Investors' Recovery Friction and Auditor Liability Rules
Authors: Radhakrishnan Suresh
Published: March 2008

This paper examines investor welfare under two different liability regimes for holding auditors liable for investor losses, the due care and the strict liability regimes. In both regimes, the investor pays the expected legal liability cost to the auditor, and a portion of any subsequent damages awarded by the court is retained by the lawyer as a contingent fee, which is called the recovery friction. This study finds that the presence of the recovery friction leads to second-best efforts by the auditor and the manager. Investor welfare in the due care regime is higher than in the strict liability regime because the expected litigation cost for the investor is lower. Investor welfare is higher in the due care regime than in the strict liability regime even when audit effort in the due care regime is lower than audit effort in the strict liability regime.
Early Evidence on the Informativeness of the SEC's Market Risk Disclosures: The Case of Commodity Price Risk Exposure of Oil and Gas Producers
Authors: Rajgopal Shivaram
Published: March 2008

The paper provides early evidence on the informativeness of commodity price risk measures required by the Securities and Exchange Commission's new market risk disclosure rules (SEC 1997). I use existing disclosures of oil and gas producers (O&G) to obtain proxies for the tabular and sensitivity analysis disclosures required by the new SEC rules. I find that proxies for the tabular and the sensitivity analysis format are significantly associated with O&G firms' stock return sensitivities to oil and gas price movements. This finding casts doubt on claims that the new market risk disclosures do not reflect firms' risk exposures. The proxies for the tabular format and sensitivity format disclosures are not substitutable explanations of firms' risk exposures. This evidence suggests that disclosures from one disclosure format are not comparable to those from the other reporting format.
The Audit Risk Model, Business Risk and Audit-Planning Decisions
Authors: Houston Richard W. , Peters Michael F. , Pratt Jamie H.
Published: March 2008

This study identifies conditions under which the audit risk model does, and does not, describe audit-planning (investment and pricing) decisions. In an experiment, audit partners and managers examined one of two cases where a material misstatement—error or irregularity—was discovered. The auditors assessed the elements of the audit risk model, assessed business risk and provided recommendations for the audit investment and fee. When the likelihood of an error was high, the audit risk model dominated business risk in the explanation of the audit investment, and the fee did not contain a risk premium. When the likelihood of an irregularity was high, business risk dominated the audit risk model in the explanation of the audit investment, and the fee contained a risk premium. These results suggest that the ability of the audit risk model to describe auditor behavior and the inclination of auditors to charge a risk premium depend upon the nature of the risks present in the audit. In the presence of errors, the audit risk model adequately described audit-planning decisions; in the presence of irregularities it did not.
The Influence of Client Preferences on Tax Professionals' Search for Judicial Precedents, Subsequent Judgments and Recommendations
Authors: Cloyd C. Bryan , Spilker Brian C.
Published: March 2008

Tax professionals provide valuable services to clients by reducing uncertainty about how clients should report transactions on their tax returns. To reduce uncertainty, tax professionals research applicable authorities (e.g., judicial precedents) and provide assessments to clients of the level of authoritative support for client-favorable positions. Tax professionals have strong incentives to make accurate assessments of the strength of client-preferred positions so that clients will understand the level of risk associated with the reporting position. Further, tax professionals must make accurate assessments of authoritative support in order to maintain compliance with tax professional standards and Federal income tax regulations. Incentives notwithstanding, psychological research on confirmation bias suggests that tax professionals' client advocacy role may inhibit professionals' ability to search objectively for relevant tax authority which, in turn, might inhibit their ability to accurately assess authoritative support. We report the results of two studies that examine causes and effects of confirmation bias in tax information search. In study 1, we find that subjects' information searches emphasized cases with conclusions consistent with the client's desired outcome (i.e., positive cases) over cases inconsistent with the client's desired outcome (i.e., negative cases), despite the fact that positive cases were no more similar to the client's facts. Additional analyses indicate that the extent of this confirmation bias was positively related to their assessments of the likelihood that a neutral court would resolve the issue in the client's favor and this in turn increased the strength with which they recommended the client's preferred tax position. Results of study 2 indicate that confirmation bias induced by client preferences can be strong enough to not only result in inaccurate assessments of authoritative support for the client-favored position, which is problematic in and of itself, but also to lead tax professionals to make overly aggressive recommendations.
Cost System and Incentive Structure Effects on Innovation, Efficiency and Profitability in Teams
Authors: Drake Andrea R. , Haka Susan F. , Ravenscroft Sue P.
Published: March 2008

The small number of full-scale adoptions of activity-based costing (ABC) coupled with ABC implementation failures have fueled a debate about the costs and benefits of ABC relative to more traditional volume-based costing (VBC) systems. ABC differs from VBC by focusing attention on activities and resources that are under the control of multiple workers. Reducing these costs often requires a coordinated effort. Therefore, incentives that motivate workers to cooperate are a prerequisite to successful process improvements based on ABC. Alternatively, when competitive incentives are combined with ABC, the result can be unexpected and negative. We examine how accounting cost system and incentive structure choices interact. We find that profits are highest when ABC is linked with group-based incentives, which provide high motivation to cooperate. In contrast, the lowest level of profit occurs when the same information-rich cost system, ABC, is coupled with tournament-based incentives. VBC, a cost system that provides a lower level of cost driver information, moderates the incentive effect. Thus, our results demonstrate that the effectiveness of ABC relative to traditional VBC is influenced by its interactive effect with incentive compensation.
Pre-Trial Settlement and the Value of Audits
Authors: Zhang Ping , Thoman Lynda
Published: March 2008

This paper studies the impact of liability rules and damage awards on audit effort and the value of an audit (the net benefits to society of an audit) when an auditor and an investor may settle before proceeding to trial. It is demonstrated that audit effort increases with size of the damage award, but may decrease with the rigor of the auditing standards. For a given level of damage award, allowing pre-trial settlements may reduce the value of the audit despite the reduction in the deadweight legal costs. On the other hand, if the damage award is optimally chosen, then allowing settlements increases social welfare. With an appropriately set damage award, strict liability standards result in the first-best outcome, while the first-best result cannot be obtained with vague negligence rules.
Does Performing Other Audit Tasks Affect Going-Concern Judgments?
Authors: Rau Stephen E. , Moser Donald V.
Published: March 2008

This study examines whether personally performing other audit tasks can bias supervising seniors' going-concern judgments. During an audit, the senior performs some audit tasks him/herself and delegates other tasks to staff members. When personally performing an audit task, the senior would focus on the evidence related to that task. We predict that such evidence will have greater influence on the senior's subsequent going-concern judgment. The results of our experiment are consistent with our predictions. When provided with an identical set of information, seniors who performed another audit task for which the underlying facts of the case reflected positively (negatively) on the company's viability, subsequently made going-concern judgments that were relatively more positive (negative). Our results also demonstrate that the well-documented tendency of auditors to attend more to negative information does not always dominate auditors' information processing. Subjects who performed the task for which the underlying facts reflected positively on the company's viability directed their attention to such positive information and, consequently, both their memory and judgments were more positive than those of subjects in the other conditions. Recent findings indicating that biases in seniors' going-concern judgments may not be fully offset in the review process are discussed along with other potential implications of our results.
Revisiting the Relation between the Default Risk of Debt and the Earnings Response Coefficient
Authors: Billings Bruce K.
Published: March 2008

Theory suggests that earnings response coefficients (ERCs) are positively associated with expected earnings growth and negatively associated with equity risk. Dhaliwal and Reynolds (1994) (DR) hypothesize that equity beta fails to capture a default risk component of equity risk and demonstrate that ERCs are negatively associated with two measures of default risk—bond ratings and debt/equity ratios—in a regression model that contains equity beta. Bond ratings and debt/equity ratios are associated with expected earnings growth. This paper examines how the association between ERCs and default risk is impacted by the inclusion of expected earnings growth in the model. The relation between ERCs and bond ratings is not significant, while the association between ERCs and debt/equity ratios is weakened but is still significant. These findings suggest part of the reason for the negative association between ERCs and default risk in DR is that their default risk proxies also reflect expected earnings growth. In fact, there is no incremental association between ERCs and default risk when equity beta, bond ratings, and expected earnings growth are in the model.
Valuation of the Firm in the Presence of Temporary Book-Tax Differences: The Role of Deferred Tax Assets and Liabilities
Authors: Guenther David A. , Sansing Richard C.
Published: March 2008

This study uses an analytical model to investigate the value of the firm when there are temporary differences between when revenue and expense items are recognized for tax- and financial-reporting purposes. The model shows that deferred tax assets and liabilities transform book values of underlying liabilities and assets into estimates of the after-tax cash flows on which the firm's market value is based. The analysis shows that if tax deductions are taken on a cash basis, and if the underlying assets and liabilities are recorded at the present value of their associated future cash flows, then the value of deferred tax assets and deferred tax liabilities is their recorded amount, regardless of when the asset will be realized or when the liability will reverse. If tax deductions are not taken when the expenditure is made (e.g., depreciation) or if underlying assets and liabilities are recorded at more than the present value of their associated future cash flows (e.g., warranty liabilities), then the market value of deferred tax assets and deferred tax liabilities is less than their recorded values. The value of the deferred tax account is independent of when that account will reverse.
Does Mandated Audit Communication Reduce Opportunistic Corrections to Manage Earnings to Forecasts?
Authors: Libby Robert , Kinney William R.
Published: March 2008

This paper reports two experiments in which Big 5 audit managers estimate reported (audited) earnings conditional on analysts' consensus forecast, auditing standards, and auditor discovery of a quantitatively immaterial earnings overstatement. We find that auditors judge overstatement correction less likely if it would cause a missed forecast, even for objectively measured misstatements. This behavior is consistent with SEC Chairman Levitt's concerns about opportunistic corrections to manage earnings to forecasts. Also, SAS No. 89's mandated representations and communications do not increase corrections that would cause a missed forecast, indicating that the Auditing Standards Board has limited ability to reduce opportunistic corrections through such regulations.
Knowledge Acquisition in Auditing: Training Novice Auditors to Recognize Cue Relationships in Real Estate Valuation
Authors: Earley Christine E.
Published: March 2008

This study examines novice auditors' knowledge acquisition. I investigate whether low-cost, informal training interventions improve knowledge acquisition in complex auditing tasks. I designed an experiment that tests the effect of two alternative training approaches on audit judgment performance: explanatory feedback (a replication and extension of Bonner and Walker [1994]), and self-explanation of the rationale underlying a judgment of reasonableness. The results suggest that each approach promotes procedural knowledge acquisition, and combining the two approaches provides more benefit than either approach alone. The effectiveness of the self-explanation approach is primarily attributable to the learner's level of reasoning. Adding explanatory feedback to self-explanations has no incremental effect after controlling for the effect of the learner's reasoning. The paper discusses the implications of these results for the design of audit training environments.
Investors' Trade Size and Trading Responses around Earnings Announcements: An Empirical Investigation
Authors: Bhattacharya Nilabhra
Published: March 2008

Prior research suggests that the earnings expectations of a segment of the market can be described by the seasonal random-walk model. Prior research also provides evidence that less wealthy and less informed investors tend to make smaller trades (small traders) than wealthier and betterinformed investors (large traders). I hypothesize that it is the earnings expectations of small traders that are associated with predictions from the seasonal random-walk model. By directly analyzing the trading activities of small and large traders, this study provides evidence that is largely consistent with the hypotheses. Specifically, small traders' trading response around earnings announcements is increasing in the magnitude of seasonal random-walk forecast errors, even after controlling for absolute analyst forecast errors, contemporaneous price changes, and market-wide trading. Supplementary analysis reveals that this effect is largely confined to firms with relatively impoverished information environments (i.e., smaller firms and firms with little to moderate analyst following).
Does Congruence between Audit Structure and Auditors' Locus of Control Affect Job Performance?
Authors: Hyatt Troy A. , Prawitt Douglas F.
Published: March 2008

This study examines how auditors' job performance is affected by the interaction between individual auditors' locus of control and the extent to which the employing audit firm uses a structured audit technology. We distributed an instrument that measures locus of control (“internal” vs. “external”) and other key constructs to staff- and senior-level auditors from the two most structured and the two least structured (then) Big 6 accounting firms. Results indicate that supervisor-assessed job performance is positively associated with the “fit” between individual auditors' locus of control and the employing firm's audit structure. Specifically, auditors who have an internal locus of control perform at a higher level at unstructured than at structured firms, on average, while auditors who have an external locus of control perform better at structured than at unstructured firms. These findings are relevant to audit firms and individual auditors seeking a match between personal and firm characteristics, and to firms seeking to determine the potential impact of audit reengineering that may alter the level of structure in their audit approaches.
Tax-Motivated Expense Allocations by Nonprofit Organizations
Authors: Yetman Robert J.
Published: March 2008

Although nonprofit organizations are generally exempt from income taxation, they pay taxes on profits from activities unrelated to their primary exempt purpose. Congress intended this tax on unrelated business activities to prevent unfair competition with for-profit businesses and to raise revenue. In the aggregate, nonprofits report annual losses on their taxable activities of more than $1 billion on $4 billion of revenues. In contrast, they report aggregate profits of over $50 billion on their tax-exempt activities. Analysis of a database of confidential tax returns suggests that medical and educational nonprofits allocate expenses from their tax-exempt to their taxable activities to reduce their tax liabilities, although unfortunately it is not possible to determine the extent to which these allocations represent noncompliance with tax laws. In contrast, I find no evidence that charitable nonprofits engage in tax-motivated allocation behavior.