Money Laundering (ML) has been announced to be a major priority to fight against by the international community; this is mainly due to its destructive consequences on the integrity and stability of the financial sector and economy. ML is the process by which the source of assets (usually cash) is concealed to obscure the link between the funds and the original criminal activity (International Monetary Fund 2016). The Banking sector is the gatekeeper of any financial system and thus, is more vulnerable to ML and many other fraudulent activities. At the same time, almost all banks use intelligent systems to track and report any suspicious activity, such systems need certain controls because failure of handling them produces higher systematic risk. Thus, stronger internal controls are required to prevent ML. According to Basel Committee on Banking Supervision (BCBS), an efficient internal audit independently and objectively evaluates the effectiveness of banks’ controls, risk management and governance processes (Basel Institute of Governance 2016). The BCBS requires banks to have internal audit function (IAF) with sufficient authority, stature, independence and resources. Thus, the involvement of IAs in IT governance creates new opportunities in the Banking sector to fight ML and assess such risk. The Egyptian Banking sector after the 25th of January revolution is moving steadily towards becoming the biggest financial centre in the region through expanding to non-traditional services such as investment consultations, brokerage and mutual funds. Thus, more integrity and transparency is needed through combating ML, Kassem and Higson (2015) argues that reviewing ML research in Egypt showed a huge gap, thus the current study aims at filling this gap by evaluating the Egyptian Banking sector’s ability to comply to AML programs through highlighting the major vital role of the IA, especially in such an intensive IT environment. This paper attempts to answer the following question: Does the banks IA’s involvement in IT Governance contribute to effective AML compliance review? We have identified the research hypotheses according to the state of art in the extant literature. The data used to test the hypotheses were collected through a questionnaire, which was distributed among IAs in the Egyptian Banking sector and a response rate of 38% was reached, this paper is constructed as follows: the next section contains the conceptual framework and discussion of the literature review and thus the derivation of the research hypotheses, followed by a section to present the research methodology; target population, sample and research constructs. The third section discusses the research findings and the fourth section displays conclusions and discussion. The final section highlights the main research limitations and future research.

Abstract

In this paper we examine the macroeconomic information content of aggregate earnings from the labor market’s perspective. We use insights from the labor economics literature to characterize the information contained in aggregate GAAP earnings and its components that is relevant for predicting aggregate job creation and destruction, labor income, and unemployment. Our results suggest that not only does aggregate earnings news convey information about future labor market aggregates, but its information content is incremental to other macroeconomic variables at near-term horizons. Further, the source of this information stems primarily from two earnings components: aggregate core earnings and special items. Core earnings news signals persistent changes in economy-wide profitability that anticipate aggregate job creation and destruction up to four quarters ahead, while special items contain news only about job destruction at horizons of up to two quarters. Taken together, our results suggest that aggregate GAAP earnings contain useful information about future labor market conditions, with the nature of such information varying across earnings components.

Introduction

Prior research finds that aggregate GAAP earnings predict future GDP growth and attributes this finding to a “corporate profit” channel, whereby aggregate earnings predict the corporate profit component of future Gross Domestic Income (GDI), the income-based equivalent of GDP (e.g., Konchitchki and Patatoukas 2014a). Corporate profits, however, represent only a small portion of GDI (on average about 9% over the past 10 years). Thus, if aggregate earnings convey macroeconomic information primarily through corporate profits, the role of accounting information for gauging the health of the macroeconomy is limited. Such a view is inconsistent with recent evidence that aggregate earnings news conveys important information about future inflation and monetary policy (Gallo et al. 2016; Shivakumar and Urcan 2017). In this paper, we focus on another aspect of the macroeconomic information contained in GAAP earnings—the link between aggregate GAAP earnings and the labor market.

Abstract

The effects of taxes have been discussed in almost every decision context in the extant literature, but the relationship between taxes and auditing has amazingly merited little attention. We explore the relationship between audit effort, audit quality and taxes from the perspective of both auditors and the public using an analytical research model. The analysis provides evidence that even symmetric taxes significantly influence audit effort and audit quality when auditors’ risk aversion is considered. While taxes do not influence audit effort monotonically, audit quality generally increases with decreasing tax rates. Hence, taxes may interfere with legislators’ efforts to improve audit quality. Additionally, we show that high quality audits should be a matter of public concern because the public is damaged whenever a party unfairly remains untaxed. Therefore, a socially optimal amount of audit effort exists. We derive a mandate- and auditor-specific liability limitation to achieve a socially optimal level of audit effort.

Introduction

The effects of taxation on decision-making have been discussed in many contexts, but amazingly, neither tax or audit research have focused on the effects of taxation on audit quality. Given that auditors are usually familiar with particular tax regimes and practices in complex legal environments, especially auditors may not be considered to neglect the effect of taxes on decision-making. In this study, we explore the relationship between audit effort, audit quality and taxes from the perspective of auditors and the public.

Honest and ethical behavior within organizations is of paramount importance, not only for the organizations involved but also for stakeholders and society as a whole. It therefore comes as no surprise that the popular press as well as the academic literature abound with stories of unethical conduct, fraud or deception and with proposed mechanisms to constrain such phenomena. One aspect of unethical conduct which has received particular attention in the literature is sabotage, defined as ‘any (costly) actions that one worker takes that adversely affect the output of another’ (Lazear, 1989). This definition is particularly relevant in the context of tournaments and personnel economics, because it embodies the idea that employees within an organization very often compete – implicitly or explicitly – against each other for promotions, bonuses, and the like. It has been shown that, in an environment in which workers have the opportunity to evaluate each other and hence to engage in strategic sabotage, efficiency is compromised due to a combination of output destruction through sabotage and lower performance by workers in anticipation of sabotage by others (Carpenter et al., 2010).1 Sabotage in the form of destroying, reducing or under-reporting the output of one’s co-workers is not the only potential threat to ethical behavior and in particular truthful information transmission in organizations. Misreporting can also take the form of inflating one’s performance, for instance when individual piece rates or targets are used to determine payments (Cadsby et al., 2010; Conrads et al., 2013). Moreover, let us consider the possibility that, in certain cases, workers may have incentives to over-report the output of their colleagues. This kind of behavior may entail severe efficiency losses, arising if the management must make decisions based on false information about the performance, risk outlook, or financial viability of various teams, units, or divisions of a firm. The propensity of an organization’s employees to engage in untruthful reporting is likely to depend on the incentives – typically in the form of incentive-based compensation – provided by the management. Broadly speaking, one can distinguish between three classes of incentive schemes: (i) individual schemes, which include flat payments but can also condition one’s compensation on her own performance through piece rates or target-based payments, (ii) competitive schemes, in which part of an employee’s compensation depends on her performance relative to other employees using tournament-like incentives, typically within a team or organizational unit, and (iii) collective or team-based schemes, which condition part of one’s payment on the performance of a group using team incentives like bonuses based on achieving team targets, or even payment schemes directly tying individual payments on the overall success of (a unit of) the organization.

Understanding the potential impact of IFRS on Banks Accounting process is critical to users (Bankers, Accountants, Auditors, Corporate management, investors, lenders, financial analysts, regulators) connected to Banks financial reporting. However, Accounting has severally been described as the language of business. This is simply because accounting focuses on identifying, classifying, summarizing and interpreting economic and other relevant information about reporting entities such that intended users of such information can make informed judgements. Through financial statements the overall well-being as well as the state of affair of organizations is communicated to stakeholders of all manners and kinds (Edirin & Edesiri 2016). International Financial Reporting Standards (IFRSs) are a set of Accounting Standards developed by International Accounting Standard Board (IASB) for the preparation and presentation of public financial statement. The primary objective of financial reporting based on IFRS is to provide high quality financial reporting information concerning economic entities primarily financial in nature, useful for economic decision making (FASB, IASB 2008.) International Financial Reporting Standards (IFRSs) is the set of accounting standards developed under a rigorous due diligence process and now used in more than 120 countries around the world including Australia, Brazil, Canada, the European states south Africa, Nigeria and many others. Accounting theory argues that the purpose of financial reporting is essentially to reduce information asymmetry between corporate managers and their related parties (Watts, 1977, Ball 2001) and financial reporting reduces information asymmetry by disclosing relevant and timely information (Jaggi & Low 2000) It is important to provide high quality financial reporting information because it will positively influence capital providers and other stakeholder in making investment, credit and similar resources allocation decision enhancing overall market efficiency (IASB, 2008; IASB, 2010). In Nigeria, the banking sector forms one of the pillars of economic development since this sector intermediate between the surplus and deficit sector of the economy thus stimulating and providing investment and economic growth and development (Umoren and Enang 2015) Increase in investment in the banking sector will lead to improved performance of the country, but for any meaningful investment to occur in the banking sector, quality accounting information regarding the performance of the banks are essential.

In our current-day world of corporate scandals, financial crises and demands for better corporate governance, the role of the IAF has become more and more important. As a result, external and internal stakeholders such as investors, regulators, and corporate boards increasingly focus on the IAF, in particular on the relationship between internal and external auditors (Gramling et al., 2004a; Glover et al., 2010; Schneider, 2009; Munro and Stewart, 2011). In this evolving environment, EAs are facing several challenges, like extended audit requirements and audit fee pressures for instance (Abbott et al., 2010). One way to combat these challenges would be to work towards an effective and efficient integration of the internal and external audit functions. Especially, since professional auditing standards (e.g., ISA 610) permit EAs to rely on the IAF. From a research perspective, Bame-Aldred et al. (2013) describe the areas of research that focus on the reliance of EAs on the IAF as very complex, since the collaboration and interactions between both functions are manifold. However, although prior research has examined a number of issues related to this reliance, several topics are unexplored. In particular, there is no empirical evidence on which determinants explicitly drive the extent to which EAs rely on the IAF. Extending prior research, this study does not only theoretically or behaviorally examine which attributes encourage the reliance of the EA on the IAF, rather it explicitly empirically investigates determinants likely to be associated with the extent of the reliance decision. With this approach we introduce a new category of IAF indicators, namely specific purposes the IAF has in the company. We explore the extent to which the EA relies on the IAF first from a CAE perspective and validate our results using additional data from EAs. Using data from a survey conducted by the Austrian, German and Swiss national Institutes for Internal Audit (IIA), we are able to explore from a CAE perspective whether specific purposes of the IAF drive the extent to which the EA relies on the IAF. In order to get insights from an EA perspective, we conduct a survey with EAs from a large audit firm in Germany.

Under efficient market hypothesis, current stock price should give no information towards predicting future return. Using current price level to predict future return is a violation of the Semi-Strong form efficient market hypothesis. In this paper I present evidence for price barriers at multiples of $10, and that simply using the integer digit of stock price, one could predict future return. The findings are motivated by a widely observed behavioral bias: the left digit bias. The left digit bias has been observed in many instances including car market (citation), housing market (citation) , and many more. It would not be surprising that investors are faced with the same bias when making decisions regarding buying and selling of stocks. The important question is whether the left digit bias could lead to predictable stock return. This relates to whether investors can withhold themselves from the bias and whether arbitragers’ force are strong enough the correct the mispricing caused by the bias. An important and related phenomenon that has been studied extensively is asset prices clustering. Asset prices clustering (at penny, dime and integer level) has been observed repeatedly in various markets. Price clustering implies that investors treat particular price levels different than other. A natural question to ask if whether such differential treatment of certain price levels would result in predictable future return. This paper examines the channels for price clustering around multiples of ten and the corresponding return implication. Previous literature has documented price clustering in the U.S. equity market ( Osborne (1962), Nierderhoffer (1965 and 1966), Harris (1991), Christie and Schult (1994), Grossman et. al. (1997), Cooney, VanNess and VanNess (2003)). Some of the recent literature has studied price clustering on varies commodities markets such as water markets (Brooks 2013) and Carbon markets (Palao 2012), as well as option market (Capelle-Blancard 2007). However none of the literature explored the return implications of price clustering, except for (Johnson, Johnson and Shanthikumar 2008), where they showed that at penny, dime and integer level, a just above round number closing price is followed by a higher return. Johnson focused on predicting the next day return base on the past day closing price, and showing that investors are insensitive to the penny and dime digits in stock price. In this paper I specifically examine the round number bias abnormal return around multiples of ten (at the integer level), and examine the return pattern through a longer horizon of up to two weeks. A one day abnormal return from a penny or dime level bias is not very tradable, but a two week return resulting from an integer level bias should be large enough to be implemented in a portfolio. Existence of a large and long lasting abnormal return simply using information from previous price level raise the question why the profit is not arbitraged away.

One of the main ways that banks achieve smooth earnings streams is by exercising discretion over the loan loss provision (LLP), which we refer to as LLP-based earnings management. LLP-based earnings management can be costly because it can attract regulatory attention (U.S. GAO, 1994; Liu & Ryan, 2006). Prior research finds that banks rely less on the LLP to manage earnings when they have alternative earnings management tools. In this paper, we hypothesize that bank holdings of financial assets exposed to fluctuations in fair value facilitate the use of realized gains and losses to manage earnings, allowing banks to escape the regulatory scrutiny associated with LLP-based earnings management. We examine whether the extent to which banks use LLP-based earnings management is reduced when they can engage in the sale of financial assets subject to fair value reporting. 1 We also examine how banks trade off LLP-based earnings management with discretion over the timing of realized gains and losses on the sale of investments, which we refer to as transaction-based earnings management. Finally, because prior research finds that auditor industry specialization mitigates accrual-based earnings management (Balsam, Krishnan, & Yang, 2003) and clients with higher quality auditors may engage in more transaction-based earnings management (Chi, Lisic, & Pevzner, 2011), we examine the association between auditor specialization, LLP-based earnings management, and fair value exposure. We focus on the banking industry because of the critical role that banks play in the economy and, more importantly, because of concerns about the financial reporting quality (and ultimate viability) of banks. Prior research suggests that managers in the banking industry use the increased flexibility allowed under fair value rules to make self-serving choices, which reduces he quality of accounting information (Dechow & Shakespeare, 2009; Dechow, Myers, & Shakespeare, 2010; Kilic, Lobo, Ranasinghe, & Sivaramakrishnan, 2013).2 We posit that their ability to use transaction-based earnings management depends, in part, on the extent to which banks hold assets exposed to fair value changes. Providing evidence on the association between bank exposure to fair values and the use of discretion in the LLP is our first contribution. We follow Nissim and Penman (2007), Khan (2014), and Xie (2016) and measure the fair value exposure as the proportion of their assets and liabilities reported at fair value. 3 We posit that banks with a high proportion of their assets and liabilities subjected to fair value reporting have additional flexibility in managing earnings through realized gains or losses, so we examine whether the level of exposure to fair value is associated with the form of earnings management chosen. Specifically, we examine the extent to which exposure to fair value influences management discretion in estimating the LLP to smooth earnings.

Nowadays, employers are getting concern on the job satisfaction on employees. Employee engagement in an organization is already identified as the main backbone of the successfulness in an organization all over the world. They identified it as a main supporter lead to unknown practices. Few researchers have indicted that employee engagement predicts employee outcomes, organizational success and financial performance (Bates, 2004). Thus, to survive and compete successfully in today’s unstable economic environment, organizations need employee to be practical, show initiative while engaging with their role and remain committed to performing at high standards. (Bakker, 2010). Organizational agility requires employees who exhibit energy and self-confidence and exhibit genuine enthusiasm and passion for their work (Shaulefi, 2008). In sum, modern organizations require an engaged work force. According to Bakker (2011), total expenditure is influenced by the commitment of a workers. A lower output will be produced if an employee is disengagement. That’s why managers and the whole organization need to make sure that employees in the organization are satisfied with the environment of the work, the activities that organized by the organization and their scope of job. We will come towards to answer theses few questions in order to attain our findings in this research, the questions are mainly asking about the job satisfaction. These question are: 1. What is job satisfaction dimension towards employee engagement? 2. Is there any relationship between job satisfaction dimension (work environment, communication, motivation) toward employee engagement. On the off chance that they are specifically and reliably educated about key issues, they as a result are taking an interest in what is occurring all through the organization. The result is that workers who feel esteemed are more beneficial, more prone to step up, and are oftentimes additionally eager to assume a part in development (Lloyd M. Field, 2008).

Identifying factors playing a role in purchaser’s behaviour has attracted the attention of many researchers. One of the most important factors is company brand image (Kim and Hyun, 2011). Brand is one of the most important elements in marketing and successfulness of an organisation, and is an image that introduces the organisation or company with all its dimensions to everybody and it is also the image of what you are and what you want to be to the mind of observers, consumers, etc. The value of a brand lies in what consumers have experienced and learned about the brand (Shahin and Pourhamidi, 2013). In today’s competitive world, companies should differentiate themselves from competitors, and brand is a tool for differentiation. In addition to having powerful brands, consolidating it in customers’ mind is important; so that customers attach to it. Nowadays, with regard to increase of similarity and standardisation of products, the main competition is over brand and its image, and companies are going to make their image which is the major basis of purchasing products (Sondoh et al., 2007). In the service industry, brand name is the same of the name of company (Berry et al., 1988). Hence, in the aviation industry, brand image is assumed as the image of company’s brand (Mun and Ghazali, 2011). According to Esch et al. (2006), brands reflect people’s requirements and therefore, studying customer perception of a brand is necessary. Brand image is numerous perceptions which customers have in their minds about brand induced from introducing brand to the market (Martinez et al., 2009). Nowadays, organisations are aware that customers’ positive notion about brand creates strategic asset and competitive advantage (Camarero et al., 2010). Moreover, Veloutsou and Moutiho (2009) believe that consumers purchase images, not products. According to Hsieh et al. (2004) a successful brand image creates differentiation from competitors and consequently increases the possibility of purchasing brand by consumers. Although various models and theories have been offered for investigating factors impacting on purchase behaviour so far, in this survey customer’s behavioural intention has been only assessed, and all factors impacting on purchaser’s ultimate behaviour are not investigated Moreover, it is obvious for everyone that aviation services industry is regarded as one of the most important and strategic industries in the country and the world, and especially because of the nature of its service, the role of brand is very remarkable in its success. But the question is ‘could the airlines of this industry create appropriate brand for itself, and has this brand been shaped, and perceived (brand image) well in customers’ minds?’ Therefore, after reviewing studies of recent half century (from 1950 to 2013) concerning the brand image structure, the major aim of this survey is to identify indicators shaping brand image in the airlines of country, and ultimately to investigate the impact of brand image on purchaser’s intention, in order to provide approaches for managers and researchers whereby accessing to the desirable brand image is facilitated which is the prerequisite of company positioning in the market. Regarding the survey aim, the questions and hypotheses of survey are as follows: Major question What are the main effective dimensions and indicators of brand image of national airlines? Major hypothesis Brand image influences purchase intention in national airlines.

Many organizations these days are suffering because of low employee morale and output, which has led to poor-quality goods and services that produce higher costs. This is because of managers in most organizations lack of the hearing; sluggish in giving feedback and facing difficulty in delegation of works in order to enhance their employee’s work commitment to improve their performance as well as a job satisfaction. On the other hand, successful organizations are able to motivate and invigorate their employees by capable managers, while they are not thinking themselves as bosses; hence become as coaches to improve their staff performance by providing training; help employees to enhance their careers; and guide them to become the best they can be. Training opportunities play a prominent role in the recruitment and retention of employees in today’s business environment. According to Lerman et al. (1999), and Billikopf (2003), training is time-consuming for employees to adapt and struggle with the undertaking given. This study will analyze training is differed from exercise to facilitate people may prove as a casual activity for fun. A study commissioned by Saks (1996) shows that the amount of training followed by an employee significant new relationship with a collaborative satisfaction, commitment, and performance. Generally, the aim of this study is to examine the relationship between training and the employee’s work commitment, job satisfaction and performance. Specifically, this study aims to ascertain the level of influence of each of the four dimensions of training on the employee’s work commitment, job satisfaction and performance. This study also carried out to investigate the positions of the top management towards training programs.

The Concept of the internet of objects appeared in the 90s, it is poised to become one of the future challenges and opens up prospects for technological and scientific developments [1]. Today, the Internet of Objects is mainly used in domains such as home automation. This is the extension of the Internet to physical objects which are not primarily intended to be connected to it. Therefore, embedded systems and smart sensors fall into this category and participate in the development of IoT. IoT’s benefits are multiple, both from the point of view of civil users and companies such gain in efficiency, savings, reliability. The importance of this domain causes a rapid evolution of the technologies, and an integration on very varied and diversified supports. The concept of “objects” aims at posing no limit as to the feasible possibilities of implementing technological tools in everyday elements. The Internet of Things is a set of tools and technologies that should be considered in every level and aspect of a connected object, modeled as a separate system. Since the Internet of Things is a set of tools and technologies, it is necessary to take into account each level and aspect of a connected object, modeled as a system in its own right [2]. The remainder of this document is organized as follows: Section II presents the different layers of the Internet of things architecture Section III, presents the different protocols that are used in the IoTs domain. In Section IV we expose the related work. Next in Section V we detail a comparative study of the protocols of the application and network layers. We conclude study Section VI.

II. IOT ARCHITECTURE

The internet of things gives solutions based on the integration of information technology, which refers to hardware and software used in storing, retrieving, and processing data and communications technology which includes electronic systems used for communicating between individuals or groups. The fast convergence of information and communications technology is built on three layers of technology innovation: the cloud, data and communication pipes/networks and device [3]. More than 25 Billion things are expected to be connected by 2020 which is a huge. So, the rapid evolution of connected objects needs adaptable and flexible architectures with different type and scope of application. There is no single consensus on IoT architecture, which is universally adopted. Different architectures have been proposed by different researchers [4]. The ever-increasing number of proposed architectures has not yet converged to a reference model [5]. We present an improved layered architecture of Internet of Things, as a survey. It summarizes the current development of IoT architectures in various domains systematically in Fig.1 [6], the internet of things layered architecture is illustrated as supposed by the ITU-T (International Telecommunications Union – Telecommunication Standardization Sector) and is composed of four layers; the top or first layer is the IOT application layer which contains the application user interface, the second layer is the services and application support layer, the third layer is the network layer which contains the networking and transport capabilities, the bottom layer is the device layer, which contains the gateways and the hardware and sensors and RFID tags and others. Along the four layers, the security and management capabilities and functions are distributed [7].

The Internet of Things (IoT) is part of our lives in countless ways— some are welcome and intentional, such as trackable fitness devices, home security alert systems, or cars that can be unlocked and started remotely; others are unintentional and may cause concern to consumers, such as connected toys that can listen to our kids, or technologies capable of tracking our whereabouts or our shopping habits without our knowledge. The rapid growth of the IoT has prompted incredible technological advances along with thorny regulatory issues, specifically in the area of information privacy. Traditional regulators of privacy, specifically the Federal Trade Commission (FTC), have stretched to apply traditional tools to regulate unprecedented technological advances and the privacy challenges they bring. An analysis of the latest FTC cases and outcomes reveals an independent agency retooling investigative and enforcement methods and priorities to establish new expectations for how fair information practices and principles will be applied to new technologies. The FTC, like the technological advances it has stretched to keep pace with, has been increasingly progressive in its recent decision-making terminology. This Article uses recent, seminal FTC cases and outcomes to demonstrate how the FTC has developed a new information privacy framework, most recently expressed as the concept of “unfair tracking,” by modifying traditional legal concepts. The FTC has significantly expanded its role as the primary reviewer of information privacy matters raised by the IoT, while attempting to balance a philosophy not to impede the advance of the technology comprising the IoT. This Article reviews recent FTC efforts to regulate the IoT and provides critical commentary on how the FTC might proceed. To best understand the genesis of recent FTC actions on IoT data collection, Part I describes what makes up the IoT, how pervasive the IoT has become in our lives and, perhaps most importantly, how it will continue to innovate at a rapid pace. Parts II and III of this Article describe some unprecedented benefits and unprecedented challenges confronting regulators of information privacy in today’s IoT age, including how to protect individual privacy rights without undermining innovation and the promise the connected world of the IoT brings. Part IV provides an in-depth critical review of four key FTC cases attempting to strike this sort of balance: In re Nomi Technologies, Inc., 1 United States v. InMobi Pte Ltd., 2 In re Turn, Inc., 3 and FTC v. VIZIO. 4 Initially, the FTC applied its traditional section 5 “deception” jurisprudence in a novel way to advance traditional notions of privacy, but it has recently transitioned to a new paradigm in the form of a cause of action for “unfair tracking,” starting with VIZIO. However, this Article concludes that this new standard could prove either too anemic or, alternatively, overbroad, without proper shepherding by the FTC. It is only with proactive guidance to supplement its traditional reactive enforcement that the little things of the IoT can overcome the big information privacy challenges the IoT creates.