The Market for Financial Report Audits: Regulation of and Competition for Auditor Independence

The independence of auditors and the quality of financial report audits generally are rarely tested except in circumstances of corporate failure when alleged sub-optimality is present. Often auditors have good defences as to their expertise or competency, but rarely do they have equally convincing defences for the independence of their audit. A major issue for the regulation of auditor independence is that the threats to independence are often subtle and difficult to measure. This paper argues that firms undertaking financial report audits need to be transparent and competitive in respect of auditor independence. Two models that adopt this premise are proposed.     

How Many Offenses are Really Committed per Juvenile Court Offender?

This article compares juvenile court petitions and self-reported offending between ages 13 and 17 for 506 boys followed up in the Pittsburgh Youth Study. There were 2.4 self-reported offenders for every petitioned offender, and 80 self-reported offenses for every petitioned offense. The prevalence of self-reported offenders stayed constant with age, but the prevalence of petitioned offenders increased with age. Conversely, the individual offending frequency stayed constant with age according to court petitions but increased with age according to self-reports. Therefore, prevalence and frequency did not vary similarly with age, and did not vary similarly in self-reports and court records. With increasing age, more and more of the self-reported offenders were formally petitioned, but they were formally petitioned for fewer and fewer of their offenses. The probability of an offender being petitioned to court increased with the number of offenses that he committed, but the probability of each offense leading to a court petition decreased with the number of offenses committed. There was little overlap between self-reported and official chronic offenders. It is concluded that researchers should always measure both self-reports and official records in studying offending, and that the juvenile court should seek to intervene earlier in delinquency careers.     

Public Eyewitness Confidence Ratings Can Differ from Those Held Privately

Despite much research on eyewitness confidence, we know very little about whether confidence ratings given in public might differ from those held privately. This study tested a prediction derived from self-presentation theory that eyewitnesses will give lower confidence ratings in public when there is a possibility of their account being contradicted by other witnesses as compared to when they report their confidence in private. In groups of 3 or 4 people, 96 participants watched a videotape of a simulated robbery and then answered 16 forced-choice questions about details from the videotape. In half of the experimental sessions, the participants shared their answers and confidence ratings aloud with the other participants (public condition), and in the other half, the answers and ratings were not shared (private). As predicted, confidence ratings were significantly lower in the public condition than in the private condition, but the privacy manipulation had no effect on response accuracy. These results are consistent with a self-presentation explanation, and they highlight the need to examine public confidence ratings more thoroughly.     

Assessing callous-unemotional traits in adolescent offenders: validation of the Inventory of Callous-Unemotional Traits

The presence of callous-unemotional (CU) traits designates an important subgroup of antisocial youth. To improve upon existing measures, the Inventory of Callous-Unemotional Traits (ICU) was developed to provide an efficient, reliable, and valid assessment of CU traits in samples of youth. The current study tests the factor structure and correlates of the ICU scale in a sample (n=248) of juvenile offenders (188 boys, 60 girls) between the ages of 12 and 20 (M=15.47, SD=1.37). Confirmatory factor analyses are consistent with the presence of three independent factors (i.e., Uncaring, Callousness, and Unemotional) that relate to a higher-order callous-unemotional dimension. Also, CU traits overall showed associations with aggression, delinquency, and both psychophysiological and self-report indices of emotional reactivity. There were some important differences across the three facets of the ICU in their associations with these key external criteria.