Risk-preparedness mechanism and audit quality:Evidence from mandatory increase of professional indemnity insurance and professional risk fund

We examine the risk-preparing benefits of Chinese audit firms’professional indemnity insurance(PII)and professional risk fund(PRF)by using the Notice on Adjusting the Application Requirement of Audit Firms for Securities Qualifications as an exogenous shock.This policy requires audit firms to raise the sum of the cumulative compensation limit of their PII and PRF from 6 million to 80million yuan.It is found,first,that the capital market regards this policy revision as a signal to strengthen investor protection and responds positively;client firms with high audit risks have a stronger response.Second,auditors’governance of financial information has strengthened,resulting in the significant improvement of their clients’financial reporting quality,with a stronger effect on firms with higher earnings management risk.There is no evidence that audit firms pass the costs on to their clients.Finally,the mismatch between auditors and new client firms is alleviated.We show that in an emerging market with weak investor protection,establishing a sound risk-preparedness mechanism for audit firms and strengthening the capacity for civil compensation ex post greatly improve the adaptive degree between international auditing standards and the legal environment of China,thereby enhancing the overall service quality of the audit market.

Bioethics in the Training and Management of Sport

The aim of this paper is to examine the opportunities and problems presented by the increasing availability of technologies which is capable of enhancing sporting performance and identifying the risks in sports for creating educational and sports management practices to lead with justice, honesty, and beneficence. A questionnaire is developed to ascertain the social determinants and risks of health aspects of sports in a sample of professionals and amateurs. Descriptive and correlation analysis were used for data analysis. The study identifies health risks connected with the intensive loading of locomotors system, poor working conditions which cause working trauma and diseases as well as low level of health culture regarding the effects of performance-enhancing drugs including anabolic steroids, stimulants, human growth hormone, and supplements. There are arguments that the quality of sport education will be achieved by addressing the study of sports ethics coupled with a study of management and law.