No abstract

SUMMARY This study examines whether auditor industry expertise affects firms' client acceptance decisions. Analyzing listed firms in Taiwan, where audit partners' signatures are disclosed on the audit report, we find that partner-level industry specialists, rather than firm-level industry specialists, are less likely to accept clients with higher audit risk. We also provide weak evidence that partner-level industry specialists are less likely to accept clients with higher financial risk. This is consistent with the notion that partner-level industry specialists have an incentive to protect their reputation when making client acceptance decisions. In 2002, following the spirit of the Sarbanes-Oxley Act (SOX), the Securities and Futures Commission in Taiwan adopted a series of new rules to improve audit quality. We examine the effect of SOX on client acceptance decisions and the results indicate that partner-level industry specialists manage risk by accepting clients with less audit risk since litigation risk increased after SOX.

An automatic method for disulfide bond assignment using dimethyl labeling and computational screening of a(1) ions with customized software, RADAR, is developed. By utilization of the enhanced a(1) ions generated from labeled peptides, the N-terminal amino acids from disulfide-linked peptides can be determined. In this study, we applied this method for structural characterization of recombinant monoclonal antibodies, an important group of therapeutic proteins. In addition to a(1) ion screening and molecular weight match, new RADAR is capable of confirming the matched peptide pairs by further comparing the collision-induced dissociation (CID) fragment ions. With the N-terminal amino acid identities as a threshold, the identification of disulfide-linked peptide pairs can be achieved rapidly at a higher confidence level. Unlike most current approaches, prior knowledge of disulfide linkages or a high-end mass spectrometer is not required, and tedious work or deliberate interpretation can be avoided in this study. Our approach makes it possible to analyze unknown disulfide bonds of protein pharmaceuticals as well as their degraded forms without further protein separation. It can be used as a convenient quality examination tool during biopharmaceutical development and manufacturing processes.

This study examines the accounting information uncertainty effects on corporate credit risk from the perspective of real earnings management (RM) activities by investigating 9565 American bond observations from year 2001 to 2008. The main results show that the volatilities of RM activities significantly and positively affect corporate bond yield spreads when well-known bond spread determinant variables are controlled. In addition, the results are robust to alternative model specifications, including the suspect firm analyses, another less ambiguous measure of abnormal cash flows from operations, and abnormal production cost analyses in manufacturing industry or with control of the input price variation. This research also finds that the positive effects of RM volatilities become weaker if a firm has a lower credit rating. Finally, our results remain hold with considering endogeneity issues and analyst characteristic variables and for another estimation period of RM volatilities.

This study explores the effect of the location of a firm’s headquarters on the firm’s management team size and reputation (MS&R) in a geographically small country (i.e., Taiwan) with numerous founding family firms. The results show that firm location quality positively relates to MS&R, and the association becomes weaker when firm profitability is higher or the founding family is present in the firm. Furthermore, the effect of firm location quality on management team reputation (team size) becomes stronger (weaker) when the CEO position is held by the founding family. Finally, the results are robust when considering endogeneity issues and other model settings.