Business

James Cotter, and George Aldhizer, III

Do Auditors Charge for Financial Risk?

Awarded $3,500 for the period 4/15/05 to 4/14/06

Source: WFU Social, Behavioral, and Economic Science Research Fund

In early 2001, the Securities and Exchange Commission (SEC) changed its disclosure rules requiring listed companies to separately report their external audit fees. This study examines the relation between these publicly reported audit fees and the financial risks faced by external auditors. Descriptive and statistical results indicate a significant positive relation between several of the financial risk variables and audit fees. More specifically, the authors find a significant positive relation between market risk (beta), client excess return risk (market model residual variance) and overvaluation risk (price-to-book ratio), and audit fees. This study’s results will help audit firms recognize the potential risks of certifying high financial risk clients and charge requisite fees for these services.

Todd Johnson

Regenerative Medicine: Current concepts and changing trends

Awarded $1,800 for the period 4/1/12 to 4/30/13

Source: North Carolina Biotechnology Center (NCBC)

Patients with diseased or injured organs may be treated with transplanted organs, but a severe shortage of donor organs worsens every year as the population ages. Regenerative medicine and tissue engineering apply the principles of cell transplantation, material sciences, and bioengineering to construct biological substitutes that may restore and maintain normal function in diseased and injured tissues. Dr. Tony Atala will review recent advances in regenerative medicine and applications for patients with end-stage tissue and organ failure.

Andrea Kelton, with Ya-wen Yang

The Effects of IT Capacity and IT Governance on Audit Quality

Awarded $10,000 for the period 5/1/10 to 5/31/11

Source: PricewaterhouseCoopers

To compete and to grow in the current business environment, companies invest heavily in information technology (IT). Appropriate use may increase the efficiency and effectiveness of overall operations and enhance the timeliness and transparency of financial reporting or dramatically increase the complexity of operations, boosting costs and reducing efficiency. Although prior research has identified economic benefits in IT investment, such as improved financial performance and firm value, the Information Technology Governance Institute notes that traditional financial measures may not be able to capture critical IT performance measures and encourages examination of alternatives. This study examines one potential consequence of IT – audit quality. It aims to elucidate (1) how a company’s IT use affects audit quality; and (2) whether enhancements to IT governance can mitigate negative effects.

G. Page West

Kauffman Campuses Initiative – Entrepreneurship and Liberal Arts: Building Campus Culture and Developing an Integrated Educational Model

Awarded $460,000 for the period 7/1/06 to 6/30/07

Source: Kauffman Foundation

The program seeks to build a sustainable culture of entrepreneurship at Wake Forest University. Efforts include:

• creating a university-level office;
• initiating a multiyear communication program to create greater awareness and understanding of entrepreneurship within the liberal arts community;
• educating and inspiring liberal arts faculty to become entrepreneurship champions;
• adding courses in entrepreneurship and creativity throughout the curriculum;
• providing cross-disciplinary and experiential learning opportunities related to entrepreneurship;
• adding 4 new liberal arts faculty positions to enhance teaching resources for the entrepreneurship curriculum;
• enhancing opportunities for students to become involved in social entrepreneurship, consistent with the university’s Pro Humanitate motto;
• establishing a university center to support entrepreneurial efforts outside the normal curriculum; and
• establishing a fifth-year entrepreneurship institute to support postgraduates completing entrepreneurial projects begun as undergraduates.

A Year of the Entrepreneur will spotlight the program’s accomplishments. At that point, curriculum and resources will support any student, from first year to graduate school, in any discipline, who wants to learn about and to pursue entrepreneurship.

Venture Science E-Teams for a Liberal Arts Institution

Awarded $2,000 for the period 9/1/02 to 9/1/03

Source: NCIIA preaward

The Calloway School is establishing a new Center for Undergraduate Entrepreneurship to promote innovative and inventive approaches to product development and marketing for science students. The center will target the many undergraduates in the natural sciences, information systems, and computer science who are also interested in learning how to start new ventures that leverage their disciplinary training. They will receive formal education in intellectual property, venture capital, inventing, and entrepreneurship as well as problem-solving and team-building. Partnered with business students trained in entrepreneurial education, they will form E-teams that will develop new ventures based on scientific inventions.

Ya-wen Yang (see Andrea Kelton, above)