Two elements of corporate governance—the strength of ethical executive leadership and the internal audit function (IAF hereafter)—provide guidance to accounting managers making decisions involving uncertainty. We examine the joint effect of these two factors, manipulated at two levels (strong, weak), in an experiment in which accounting professionals decide whether to book a questionable journal entry (i.e., a journal entry for which a reasonable business case can be made but there is no supporting documentation). We find that ethical (...) leadership and the IAF interact to determine the likelihood that accountants book the entry. Specifically, accountants are less likely to book a questionable journal entry when there is a weak ethical leader and a strong IAF compared to all other conditions. In addition, we find that accountants question the appropriateness and ethicalness of the request to book an undocumented journal entry more in the weak ethical leader and strong IAF condition than in the other conditions. These results suggest that the IAF has a different impact on financial reporting decisions depending on the ethicalness of executive leadership and that a strong IAF may cause accountants to question the appropriateness and ethicalness of an undocumented journal entry when combined with weak ethical leadership. We also find that the interactive effect of ethical leadership and the IAF on an accountant’s decision is fully mediated by his/her perception of the moral intensity of the issue. Thus, accountants, who perceive greater moral intensity associated with booking the entry, are less willing to do so. (shrink)

Our exploratory study considers whether the internal audit function is an efficient “third line of defense” for risk management and control as proposed by The Institute of Internal Auditors. To that end, we interview chief audit executives and experienced internal auditors to examine whether CAEs manage the impressions of audit committee members in the annual accountability process. We also provide an illustration of impression management techniques through a documentary case that explores a unique (...) and exclusive dataset consisting of the main guidance, framework, and accountability documents of one of these organizations. Our analysis highlights how several macro- and microimpression management techniques were used to burnish the image of internal auditors and, more importantly, the management team. Rather than monitoring managers, the CAEs team up with them. Our findings cast doubts on the conceptualization of internal audit as the independent third line of defense envisioned to be a keystone of the governance mosaic. This study supports other research that questions the effectiveness of internal auditing as a governance mechanism. It also contributes to the impression management literature by exposing impression management practices that occur through a private reporting channel—the internal audit function’s annual accountability to the audit committee. Last but not least, significant ethical concerns are raised in regard to internal audit, and research is urged in that area. (shrink)

Moral Seduction Theory suggests that auditors are morally compromised by the perceived consequences of their opinions. The root of the auditing problem appears to result in an unintentional bias rather than in dishonesty. Although important accounting reforms have been taken to deal with auditors' trustworthiness, their lack of independence has not been adequately addressed. The new regulation (Sarbanes-Oxley Act) is a consequence of an incorrect understanding of the main true source of auditor's biases. We have developed a cognitive approach by (...) connecting the Throughput Model (TM) to the Moral Seduction Theory. This approach allows a better understanding of how conflicts of interest lead auditors to avoid the issuance of warning signals to stakeholders. We have tested our model by conducting a hypothetical scenario with eighty experienced auditors from international accounting firms. Our results confirm auditors' unintentional reluctance to issue qualified audit opinions alerting investors due to their fear of precipitating clients' final bankruptcy. The main implication is that, more than a regulation, effort should be made in monitoring those conflicts of interest to reduce unintentional bias. (shrink)

This volume addresses relations between macroscopic and microscopic description; essential roles of visualization and representation in chemical understanding; historical questions involving chemical concepts; the impacts of chemical ideas on wider cultural concerns; and relationships between contemporary chemistry and other sciences. The authors demonstrate, assert, or tacitly assume that chemical explanation is functionally autonomous. This volume should he of interest not only to professional chemists and philosophers, but also to workers in medicine, psychology, and other fields in which relationships between explanations (...) based on diverse levels of description and investigation are important. (Listed on Google books). (shrink)

We test competing theoretical perspectives of family firm governance in two separate studies by investigating whether family firm control moderates the detrimental effect of a management training ground on internal auditor objectivity and on the external auditor’s decision to rely on the internal audit function. In Study 1, we assess the objectivity of internal auditors working under an IAF that serves as a MTG or non-MTG and located in a family or non-family firm. A key (...) result of Study 1 is the mitigating role of family firm control, as we find that the objectivity of internal auditors is reduced when the IAF serves as a MTG but only in non-family firms. When the IAF is located in a family-controlled firm, the objectivity of internal auditors is unaffected by the opportunity to be promoted into management positions outside of the IAF. In Study 2, we utilize a controlled laboratory experiment with experienced Big 4 auditors as participants and examine their decision to rely on an IAF when it serves as a MTG. Our analyses indicate that external auditors reduce their reliance on non-family firm IAFs that are also MTGs and their decision is fully mediated by the perceived objectivity of non-family firm internal auditors. In contrast, external auditors’ reliance on family firm IAFs and their perceptions of internal auditor objectivity are unaffected under a MTG regime. The results of Studies 1 and 2 provide support for the alignment perspective of family firms. (shrink)

This study of internal auditors and auditees, who engage in both financial and operational internal audits in Israel, extends theory and research on internal audits in organizational units. It develops and tests a model that examines the role of top management and internal auditors in facilitating learning from internal audits and driving perceived performance improvement. We argue that support from the top management for the internal audit as well as the auditor’s capacity facilitate (...) learning from audits and help audited units to improve ethicality, efficiency, and effectiveness in organizations. The results of time-lagged survey data provide general support for the hypothesized indirect relationships between auditor capacity, auditor–auditee relational exchanges, learning from audits, and three different perceived performance measures: ethical behavior, efficiency, and effectiveness. We discuss the implications for research on internal audits, proactive learning, ethics, and performance improvement of organizational units in the public sector. (shrink)

Internal auditing has been adding value in organisations across all sectors for many years. This paper is based on research by the authors into this value in the UK, widened to include the contribution by internal auditing's professional development worldwide. This development is based mainly on international internal auditing standards, now receiving recognition by governments, regulators, external auditors and other authorities across the world. Not least by the worldwide requirements of the US Sarbanes-Oxley Act of 2003, and (...) board responsibility for the effectiveness of internal control. The paper discusses how the assurance, compliance and consultant roles of internal auditing are being recognised today at board level in many organisations as valuable contributors to good governance practices. (shrink)

This article is intended to emphasize several ethical issues relating to the activities of the internal auditor. The points of view expressed relate mainly to the public sector of Israel. Beyond the discussion of the specific issues against its unique Israeli background (Internal Audit Law), the discussion throws light on general problems that have not yet been solved.

The Sarbanes–Oxley Act of 2002 requires audit committees of public companies’ boards of directors to install an anonymous reporting channel to assist in deterring and detecting accounting fraud and control weaknesses. While it is generally accepted that the availability of such a reporting channel may reduce the reporting cost of the observer of a questionable act, there is concern that the addition of such a channel may decrease the overall effectiveness compared to a system employing only non-anonymous reporting options. (...) The rationale underlying this concern involves the would-be reporter’s likelihood of reporting, the seriousness with which the organization treats an anonymous report, and the organization’s ability to thoroughly follow-up the report. Thus, we explore the extent to which the availability of an anonymous reporting channel influences intended use of non-anonymous reporting channels. Further, in response to Sarbanes–Oxley and the environment of financial scandals that led to its passage, many firms are strengthening their internal audit departments, and providing them with greater independence from upper management’s direct control. Accordingly, our examination tests whether the intended use of the internal audit department as an internal reporting channel is greater when the internal audit department is of “high” versus “low” quality. Finally, the study investigates intended reporting behavior across three different cases (e.g., settings). Results show that the existence of an anonymous channel does reduce the likelihood of reporting to non-anonymous channels, that generally the internal audit department quality does not affect reporting to non-anonymous channels, and that case-setting affects the type of channel to be used. Implications from the study are discussed. (shrink)

The purpose of the study is to research intermediary transactions in the oil and gas producing industries and present them based on the results of the internal audit. In accordance with this goal, the article discusses and analyzes the theoretical aspects of accounting and methods of conducting an internal audit of settlements for intermediary transactions in oil companies. Attention is focused on the fact that intermediary operations are important in regulating the mechanism of market relations of (...) both manufacturing companies and purchasing companies. The article analyzes the current methodological guidelines of oil companies on the accounting of intermediary operations and the rules for conducting internal audits. As a result, shortcomings in the accounting of intermediary operations were identified and methodological recommendations for their improvement were presented, confirming the scientific novelty of the study. (shrink)

This exploratory study investigates the manifold conceptions of the internal auditing of risk culture prevalent among four influential actors of the financial sector—regulators, normalizers, consultants, and implementers. By inductive analysis of 20 interviews and 295 documents, we illustrate a two-step interpretive scheme utilized by the four actors in their IA approaches of risk culture: defining broad goals and designing visibility schemes. The visibility schemes were tied to the demarcation, measurement, as well as the IA data collection techniques of risk (...) culture. Our results indicate two dichotomous interpretations among the four actors concerning the IA of risk culture. The first interpretation, prevalent among regulators and implementers, promotes the control of risk culture primarily through verification. The second interpretation, adopted by consultants and normalizers, promotes the control of risk culture by IA along with the empowerment of employees through training programs. Our results not only contribute to understanding IA expansions, specifically to non-tangible domains such as risk culture but also enrich the literature exploring the mechanisms different stakeholders utilize to shape weakly professionalized IA practices. (shrink)

The frequency of earnings restatements has been increasing over the last decade. Restating previous earnings erodes perceived trustworthiness and competence of management, giving firms strong incentives to take actions to enhance perceived credibility of future financial reports [Farber, D. B.: 2005, The Accounting Review 80(2), 539–561.]. Using an experimental case, we examine the ability of post-restatement actions taken by a firm to positively influence non-professional investors’ perceptions of management’s financial reporting credibility. Our examination considers credibility judgments following two types of (...) restatements – those resulting from fraud in which the character, ethics, and values of an organization may be called into question [cf. Copeland, Jr., J. E.: 2005, Accounting Horizons 19(1), 35–43.], and those resulting from non-fraud (i.e., aggressive accounting). Based on the information in the experimental case, non-professional investors take the role of potential equity investors and make a judgment about management’s financial reporting credibility after reviewing a set of post-restatement actions taken by a firm. The possible actions include changes in four corporate governance mechanisms (i.e., internal audit function, external audit firm, board of directors, CFO) and a buyback of company stock. Our results provide an important contribution to the literature by demonstrating that among non-professional investors, perceptions of management’s financial reporting credibility are affected both by the post-restatement action taken and the nature of the restatement. These results offer insight into the formation of a key credibility judgment made by non-professional investors following a trust-destroying event, an earnings restatement. (shrink)

Entities pursuing their objectives focus on the smooth and efficient operations and processes, and optimum use of funds. For this purpose, an internal control system is being implemented in enterprises and organizations, one of the components among these systems is internal audit. The main objective of the internal auditor is to provide an independent and impartial assessment of the entity's performance and provide insights on how to improve its operations. Although internal audit is only (...) part of the internal control system of the entity, it has to assess the proper functioning of the system itself, propose measures to make internal control more efficient. The state of internal control largely depends on the work of the internal auditor. Scientific problem. The scientific literature emphasizes the need to create an appropriate system of internal control of the entity, but for many supervisors and internal auditors internal audit and internal control still associate with the role of the inspector. A well-functioning internal control system reduces the work involved in the audit and risks that allow the internal auditor to devote more time to developing the entity's development prospects. Particular attention in the process of operational efficiency must be given to employees performing the functions entrusted to them, including them in the process of internal control improvement. Not only managers but also all employees need to deepen knowledge of the importance of internal audit and the necessity of reaching the goals set by the entity, not only managers but also all employees. The aim of the article: to analyze peculiarities of theoretical internal audit and control. In order to achieve the tasks: to analyze the concept of internal audit and control, and its variation; to research internal audit objectives. The object of the research: internal audit and control in a company. The methodology of the research: the systemic analysis of scientific literature and legislation. (shrink)

In this paper, I argue that what counts as the proper function of a trait is a matter of the de facto perspective that the biological system, itself, possesses on what counts as proper functioning for that trait. Unlike non-perspectival accounts, internal perspectivalism does not succumb to generality problems. But unlike external perspectivalism, internal perspectivalism can provide a fully naturalistic, mind-independent grounding of proper function and natural norms. The attribution of perspectives to biological systems is intended (...) to be neither metaphorical nor anthropomorphic: I do not mean to imply that such systems thereby must possess agency, cognition, intentions, concepts, or mental or psychological states. Instead, such systems provide the grounding for norms of performance when they internally enforce their own standard of (i.e., their own perspective on) what constitutes proper functioning or malfunctioning. By operating with a fixed, determinate level of generality, such systems provide the basis for an account of proper function that is immune to generality problems. (shrink)

The purpose of this paper is to present an overview of current studies on the general limitations of using the International Classification of Functioning, Disability and Health (ICF), as well as to review the results of its application in adults with visual impairment. The literature search was performed in ERIC, EBSCO-Host, ScienceDirect, PROKUEST, SCOPUS, and Google Scholar. Articles were selected if they reported on any of the strengths and weaknesses of the ICF, also its application to adults with visual impairment. (...) The literature review was performed using the PRISMA criteria. The search of relevant literature revealed 8 articles that met the eligibility criteria. The overall conclusion is that while the ICF is a valuable tool for describing how a person functions, it is not an evaluation instrument in itself. (shrink)

Famously, Galilei made the ontological claim that the book of nature is written in the language of mathematics. Probably, if only implicitly, most contemporary natural scientists share his view. This paper, in contradistinction, argues that nature is only partly written in the language of mathematics; partly, it is written in the language of functions and partly in a very simple purely qualitative language, too. During the argumentation, three more specific but in themselves interesting theses are put forward: first (in Section (...) 3), there are more shapes than real numbers; second (in Section 4), the metrological notion ‘amount of substance’ can profitably be exchanged for ‘number of entities’; third (in Section 5), prototypical concepts will always be scientifically important. (shrink)

Kubovy and Epstein distinguish between systems that follow rules, and those that merely instantiate them. They regard compliance with the principles of kinematic geometry in apparent motion as a case of instantiation. There is, however, some reason to believe that the human visual system internalizes the principles of kinematic geometry, even if it does not explicitly represent them. We offer functional resemblance as a criterion for internal representation. [Kubovy & Epstein].

Kubovy and Epstein's main quarrel is with the concept of “internalization.” I argue that they underestimate the aptness of this metaphor. In particular, an emulator which predicts unfolding events can be described as an internalization of external structures. Further, an emulator may use motoric as well as perceptual resources, which lends support to Hecht's proposal. [Hecht; Kubovy & Epstein].

There is an international consensus that medical research involving humans should only be undertaken in accordance with ethical principles. Paradoxically though, there is no consensus over the kinds of activities that constitute research and should be subject to review. In the UK and elsewhere, research requiring review is distinguished from clinical audit. Unfortunately the two activities are not always easy to differentiate from one another. Moreover, as the volume of audit increases and becomes more formal in response to (...) the demand for evidence-based practice in medicine, the overlap between research and audit grows more acute. Arguably, similar ethical standards and systems for ensuring that those standards are met should be applied regardless of whether or not a project is classified as research or audit. At a time when the research ethics review system in the UK is undergoing significant reform it is important that the opportunity is not missed to address the longstanding research-audit problem. We discuss suggestions for further reform that addresses this issue. (shrink)

In Perception and the Internal Senses Juhana Toivanen offers a philosophical reconstruction of Peter of John Olivi’s (ca. 1248-98) conception of the cognitive psychology of the sensitive or animal soul.

This study explored the evidence of validity of internal structure of the 12-item Functional Assessment of Chronic Illness Therapy—Spiritual Wellbeing Scale in Brazilian adolescents with chronic health conditions. The study involved 301 Brazilian adolescents with cancer, type 1 diabetes mellitus, or cystic fibrosis. Exploratory Factor Analysis, Confirmatory Factor Analysis, and Item Response Theory were used to test the internal structure. Reliability was determined with Cronbach’s Alpha and McDonald’s Omega. The EFA suggested a one-dimensional scale structure in contrast to (...) the original 2-factor model or the 3-factor model which were not reproduced in the current CFA. All quality indicators for the EFA one-factor exceeded the required criteria. The FACIT-Sp-12 for adolescents yielded strong evidence for a 1-factor model and with good reliability. (shrink)

Current International Criminal Law suffers from at least four theoretical shortcomings regarding its ‘concept and meaning’, ‘ius puniendi’, ‘overall function’ and ‘purposes of punishment’. These issues are intimately interrelated; in particular, any reflection upon the last two issues without having first clarified the ius puniendi would not make sense. As argued elsewhere, in an initial contribution towards a consistent theory of ICL, the ius puniendi can be inferred from a combination of the incipient supranationality of the value-based world order (...) and the world citizens’ fundamental human rights predicated upon a Kantian concept of human dignity. On this basis, it is now possible to examine the overall function of ICL. Given the fact that ICL has not yet achieved the status of an autonomous discipline, the inquiry must start with a discussion of national theories of criminalisation. The article focuses on the two most important theories of criminalisation, namely the theories of protection of Rechtsgüter and the prevention of harm. Next, it examines whether and how these national theories can be transferred to ICL. (shrink)

With the growing amount of clinical research, regulations and research ethics are becoming more stringent. This trend introduces a need for quality assurance measures for ensuring adherence to research ethics and human research protection beyond Institutional Review Board approval. Audits, one of the most effective tools for assessing quality assurance, are measures used to evaluate Good Clinical Practice and protocol compliance in clinical research. However, they are laborious, time consuming, and require expertise. Therefore, we developed a simple auditing process and (...) evaluated its feasibility and effectiveness. The screening audit was developed using a routine audit checklist based on the Severance Hospital’s Human Research Protection Program policies and procedures. The measure includes 20 questions, and results are summarized in five categories of audit findings. We analyzed 462 studies that were reviewed by the Severance Hospital Human Research Protection Center between 2013 and 2017. We retrospectively analyzed research characteristics, reply rate, audit findings, associated factors and post-screening audit compliance, etc. Investigator reply rates gradually increased, except for the first year. The studies were graded as “critical,” “major,” “minor,” and “not a finding”, based on findings and number of deficiencies. The auditors’ decisions showed fair agreement with weighted kappa values of 0.316, 0.339, and 0.373. Low-risk level studies, single center studies, and non-phase clinical research showed more prevalent frequencies of being “major” or “critical”. Inappropriateness of documents, failure to obtain informed consent, inappropriateness of informed consent process, and failure to protect participants’ personal information were associated with higher audit grade. We were able to observe critical GCP violations in the routine internal audit results of post-screening audit compliance checks in “non-responding” and “critical” studies upon applying the screening audit. Our screening audit is a simple and effective way to assess overall GCP compliance by institutions and to ensure medical ethics. The tool also provides useful selection criteria for conducting routine audits. (shrink)

International human rights law has struggled to define a standard for determining the extraterritorial applicability of its norms that would reconcile the ethos of universal entitlement, on the one hand, with the centrality of borders in delineating state powers and responsibilities under international law, on the other hand. The case law of the UN Human Rights Committee and the European Court of Human Rights favors barring states from engaging in conduct outside their borders that would be impermissible if undertaken inside (...) their borders. Still, attempts to demarcate the precise scope of extraterritorial application through allusion to degrees of control over individuals or areas, or by the nature of the obligation itself – have led to unsatisfactory, if not arbitrary results. This article opines a move to functionalism as the basis for extraterritorial applicability – requiring states to protect IHRL in situations they can do so. Under this approach, which takes universality seriously, borders lose much their normative significance. I suggest limiting the functional approach to extraterritorial applicability in accordance with two key notions: the intensity of power relations – factual relations of power entailing direct, significant and foreseeable potential impact – should result in the application of IHRL obligations; or, alternatively, special legal relations – relations of power that put the state in a unique legal position to afford IHRL protection would also justify the imposition of extraterritorial obligations. (shrink)

In this article, we extend the research on the public interest to non-audit engagements performed by accounting firms and public accountants. Our thesis is that non-audit engagements, as private goods, require a distinct approach to the public interest than auditing. We suggest that a public value perspective can be used conceptually to provide substantial criteria for designing non-audit engagements conducive to public value creation and greater accountability. We illustrate the applicability and consequences of a public value perspective (...) by analyzing and contrasting the decision of two judicial opinions deciding whether Deloitte and the lead partner of a consulting engagement failed to act in the public interest in engineering the sale of collapsed British carmaker MG Rover. We advocate for a significant change in ethical codes of conduct by defining public interest obligations, not only in terms of professional attributes, but also in terms of outcomes. Our approach also suggests a requirement regarding planning a non-audit engagement, including establishing a public value proposition detailing the planned nature of the engagement, and extent of the assessment of the intended public value creation. We discuss the aspirational function of codes of conduct to provide accountability other than in terms of technical output, and to maintain the legitimacy and purpose of the profession. (shrink)

Given its significance to stakeholders, the process of revising audit reports is an essential subject in today’s economic context. This study aims to detail relevant elements of this process by evaluating alterations to and developments of the audit report, as supported by international and regional standard-setters and regulators. To that end, we examine audit reports that have already applied new auditing regulations. This case study approach allows us to highlight UK audit-reporting practices both before and after (...) the ISA 700 was issued and entered practice. Our findings reveal that in terms of content and content positioning, UK companies’ audit reports make use of the psychological effects of primacy versus serial position and have done so long before the applicability of the international standard for financial statements published after December 2016. (shrink)

The International Classification of Functioning, Disability and Health (ICF), designed by the WHO, attempts to provide a holistic model of functioning and disability by integrating a medical model with a social one. The aim of this article is to analyze the ICF’s claim to holism. The following components of the ICF’s complexity are analyzed: (1) health condition, (2) body functions and structures, (3) activity, (4) participation, (5) environmental factors, (6) personal factors, and (7) health. Although the ICF claims to be (...) holistic, it presupposes a monistic materialistic ontology. We indicate some limitations of this ontology, proposing instead: (a) a pluralistic–holistic ontology (PHO) and (b) a multidimensional view of the human being, with individual and environmental aspects, in relation to three levels of reality implied by the PHO. For the ICF to attain its holistic claim, the interactions between its components should be based on (a) and (b). (shrink)

Diabco Corporation, consisting of both domestic and international operations, aspires to be a world class company. Assumption of that status requires Diabco to develop a profile as a responsible member within the world community. Attributing morality to a corporation may seem somewhat inappropriate because it is merely an artificial entity. Yet, a corporation is only as ethical as its agents. At a minimum, Diabco must meet legal requirements, but the development of moral responsibility requires a conscious effort by all corporate (...) agents to avoid harming others. To appraise the company''s moral condition, the authors constructed the premise that Diabco conducted a comprehensive moral audit. Although the concept of a moral audit is still a relatively undeveloped appraisal activity, the purpose of the study is to demonstrate the desirability, feasibility, and possible inadequacies of such an endeavor. (shrink)

The authors report the first Italian experience of a research ethics committee (REC) audit focused on the evaluation of the REC’s compliance with standard operating procedures, requirements in insurance coverage, informed consent, protection of privacy and confidentiality, predictable risks/harms, selection of subjects, withdrawal criteria and other issues, such as advertisement details and justification of placebo. The internal audit was conducted over a two-year period (March 2009–February 2011) divided into quarters to better value the influence of the new (...) insurance coverage regulation that came into effect in March 2010 (Ministerial Decree of 14 July, 2009) and expand the requirements to safeguard participants in clinical drug trials including other critical items as information and consent and the risks to benefits ratio. Out of a total of 639 REC’s opinions and research studies, 316 were reviewed. Regarding the insurance policy requirements, Auditor/REC non-compliance occurred only in one case. The highest number of Auditor/REC non-compliance was in regard to information and consent, which should have incurred a suspended decision rather than a favorable opinion. This internal audit shows the importance and the difficulty of the review process. For this reason, specific courses for members of the research ethics committee and for those who aspire to become auditors will be provided. There may also be efforts to improve the standard operating procedures already in place. (shrink)

Research has consistently found that poor family functioning is a risk factor for adolescents' internalizing problems. However, studies of the mediating and moderating mechanisms underlying this relation are insufficient. In this study, we explore the association between family functioning and adolescents' internalizing problems by testing the mediating roles of positive youth development attributes and the moderating role of migrant status. A large cross-sectional sample of 11,865 Chinese adolescents were used to measure internalizing problems, family functioning, PYD, migrant status, and other (...) demographic information. After controlling for covariates, the results revealed that PYD mediated the relation between family functioning and internalizing problems. Moreover, migrant status moderated the relationship between family functioning and internalizing problems. Specifically, the effects of family functioning on internalizing problems were stronger among local-born adolescents than among migrant adolescents. The findings indicate that improving family functioning and PYD attributes may be promising approaches to prevent/reduce adolescent internalizing problems. (shrink)

Organisms are self-producing and self-maintaining, or autopoietic systems. Therefore, the course of evolution and adaptation of an organism is strongly determined by its own internal properties, whatever role external selection may play. The internal properties may either act as constraints that preclude certain changes or they open new pathways: the organism canalizes its own evolution. As an example the evolution of feeding mechanisms in salamanders, especially in the lungless salamanders of the family Plethodontidae, is discussed. In this family (...) a large variety of different feeding mechanisms is found. The authors reconstruct this evolutionary process as a series of bifurcation points of either constraints or opportunities forming a sequence of preconditions for the formation of a high-speed projectile tongue characteristic of tropical salamanders. Furthermore, it is shown how parallel evolution of seemingly unrelated domains within an organism such as respiratory physiology, life history biology and pattern of ontogeny has rather direct relevance to the feeding biology, thus demonstrating that organisms always evolve as wholes. (shrink)

This volume is issued by one of Max Planck Society’s 83 research institutes, the Max Planck Institute for Comparative Public Law and International Law, a strong reference on i...

The paper begins with an example of the accounting treatment afforded an Indefeasible Rights Use (IRU) Swap by Global Crossing. The case presents a typical example of ways in which accounting firms contributed to the ethical scandals of the early 21st century. While the behavior of Arthur Andersen, the accounting company in the case, might have met the letter of the law, we argue that it violated the spirit of the law, which can be discovered by looking at (1) the (...) legitimate goals of a company which give it its ethical direction and (2) the responsibilities of the accounting professionals who serve the company and the general public. Those professional responsibilities are determined by looking at the legitimate function those professionals fulfill in the economy. A further claim is that Andersen and other accounting firms are motivated to abandon the responsibilities derived from pursuing their proper goals by falling into the trap of accumulating wealth for its own sake. We argue that the ultimate responsibility of internal auditors is to develop statements that give as reasonably true and fair a picture of the financial situation to any user having a claim to that knowledge. Further we argue that the major responsibilities of the external auditor are: first, to be responsible to the using public for evaluating financial statements and declaring that they represent a fair picture of the financial situation of a company, and second, to be a watchdog of financial markets and call into question irregular practices that would distort those pictures. Such due professional care requires the auditor to exercise professional skepticism: an attitude that includes a questioning mind and a critical assessment of audit evidence. The paper concludes by giving particular examples of how Arthur Andersen LLP failed to meet those responsibilities. (shrink)