Key Controls Research Articles

SOX 404(b) Audits: Evidence from Auditing the Financial Close Process of the Accounting System

ABSTRACTAuditing Standard No. 5 requires that auditors integrate their evaluation of large issuers' internal control over financial reporting (ICFR) into their financial statement audit process, but the PCAOB warns that auditors may not adequately test related manual and systems internal controls. We use a multiple method approach to examine how auditors evaluate one important component of ICFR, the financial close process, and whether they evaluate it differently when conducting a SOX 404(b) integrated versus a financial statement audit. Interviewees relied heavily on walkthroughs, and tended to perform only cursory reviews of entity-level controls related to the financial close process. In addition, they often failed to test the link between the general ledger and supporting systems, including evaluating related access controls. Financial statement-only auditors were more likely to re-perform key controls than rely on cursory walkthroughs. Auditors performing integrated audits appeared to over-rely on ICFR findings when conducting financial statement audits.Data Availability: Interview data are available from the first author. PCAOB inspection reports are publicly available.

Influence of fracture nucleation and propagation rates on fracture geometry: insights from geomechanical modelling

We combine a power-law microfracture size distribution function with an expression for fracture propagation rate derived from subcritical fracture propagation theory and linear elastic fracture mechanics, to derive a geomechanically based deterministic model for the growth of a network of layer-bound fractures. This model also simulates fracture termination due to intersection with perpendicular fractures or stress-shadow interaction. We use this model to examine key controls on the emergent geometry of the fracture network. First, we examine the effect of fracture propagation rates. We show that at subcritical fracture propagation rates, the fracture nucleation rate increases with time; this generates a very dense network of very small fractures, similar to the deformation bands generated by compaction in unconsolidated sediments. By contrast, at critical propagation rates, the fracture nucleation rate decreases with time; this generates fewer but much larger fractures, similar to the brittle open fractures generated by tectonic deformation in lithified sediments. We then examine the controls on the rate of growth of the fracture network. A fracture set will start to grow when the stress acting on it reaches a threshold value, and it will continue to grow until all the fractures have stopped propagating and no new fractures can nucleate. The relative timing and rate of growth of the different fracture sets will control the anisotropy of the resulting fracture network: if the sets start to grow at the same time and rate, the result is a fully isotropic fracture network; if the primary fracture set stops growing before the secondary set starts growing, the result is a fully anisotropic fracture network; and if there is some overlap but the secondary set grows more slowly than the primary set, the result is a partially anisotropic fracture network. Although the applied horizontal strain rates are the key control on the relative growth rates of the two fracture sets, we show that the vertical effective stress, the initial horizontal stress, the elastic properties of the rock and the inelastic deformation processes, such as creep, grain sliding and pressure solution, all exert a control on the fracture growth rates, and that more isotropic fracture networks will tend to develop if the vertical effective stress is low or if the fractures are critically stressed prior to the onset of deformation. Thematic collection: This article is part of the Naturally Fractured Reservoirs collection available at: https://www.lyellcollection.org/cc/naturally-fractured-reservoirs

Minibasin depocentre migration during diachronous salt welding, offshore Angola

AbstractSalt tectonics is an important part of the geological evolution of many continental margins, yet the four‐dimensional evolution of the minibasins, the fundamental building block of these and many other salt basins, remains poorly understood. Using high‐quality 3D seismic data from the Lower Congo Basin, offshore Angola we document the long‐term (>70 Myr) dynamics of minibasin subsidence. We show that, during the Albian, a broadly tabular layer of carbonate was deposited prior to substantial salt flow, diapirism, and minibasin formation. We identify four subsequent stages of salt‐tectonics and related minibasin evolution: (i) thin‐skinned extension (Cenomanian to Coniacian) driven by basinward tilting of the salt layer, resulting in the formation of low‐displacement normal faults and related salt rollers. During this stage, local salt welding led to the along‐strike migration of fault‐bound depocentres; (ii) salt welding below the eastern part of the minibasin (Santonian to Paleocene), causing a westward shift in depocentre location; (iii) welding below the minibasin centre (Eocene to Oligocene), resulting in the formation of a turtle and an abrupt shift of depocentres towards the flanks of the bounding salt walls; and (iv) an eastward shift in depocentre location due to regional tilting, contraction, and diapir squeezing (Miocene to Holocene). Our study shows that salt welding and subsequent contraction are key controls on minibasin geometry, subsidence and stratigraphic patterns. In particular, we show how salt welding is a protracted process, spanning > 70 Myr of the salt‐tectonic history of this, and likely other salt‐rich basins. The progressive migration of minibasin depocentres, and the associated stratigraphic architecture, record weld dynamics. Our study has implications for the tectono‐stratigraphic evolution of minibasins.

Particulate organic matter controls benthic microbial N retention and N removal in contrasting estuaries of the Baltic Sea

Abstract. Estuaries worldwide act as “filters” of land-derived nitrogen (N) loads, yet differences in coastal environmental settings can affect the N filter function. We investigated microbial N retention (nitrification, ammonium assimilation) and N removal (denitrification, anammox) processes in the aphotic benthic system (bottom boundary layer (BBL) and sediment) of two Baltic Sea estuaries differing in riverine N loads, trophic state, geomorphology, and sediment type. In the BBL, rates of nitrification (5–227 nmol N L−1 d−1) and ammonium assimilation (9–704 nmol N L−1 d−1) were not enhanced in the eutrophied Vistula Estuary compared to the oligotrophic Öre Estuary. No anammox was detected in the sediment of either estuary, while denitrification rates were twice as high in the eutrophied (352±123 µmol N m−2 d−1) as in the oligotrophic estuary. Particulate organic matter (POM) was mainly of phytoplankton origin in the benthic systems of both estuaries. It seemed to control heterotrophic denitrification and ammonium assimilation as well as autotrophic nitrification by functioning as a substrate source of N and organic carbon. Our data suggest that in stratified estuaries, POM is an essential link between riverine N loads and benthic N turnover and may furthermore function as a temporary N reservoir. During long particle residence times or alongshore transport pathways, increased time is available for the recycling of N until its eventual removal, allowing effective coastal filtering even at low process rates. Understanding the key controls and microbial N processes in the coastal N filter therefore requires to also consider the effects of geomorphological and hydrological features.

Identifying Key Controls on Storm Formation over the Lake Victoria Basin

Abstract The Lake Victoria region in East Africa is a hot spot for intense convective storms that are responsible for the deaths of thousands of fishermen each year. The processes responsible for the initiation, development, and propagation of the storms are poorly understood and forecast skill is limited. Key processes for the life cycle of two storms are investigated using Met Office Unified Model convection-permitting simulations with 1.5 km horizontal grid spacing. The two cases are analyzed alongside a simulation of a period with no storms to assess the roles of the lake–land breeze, downslope mountain winds, prevailing large-scale winds, and moisture availability. While seasonal changes in large-scale moisture availability play a key role in storm development, the lake–land-breeze circulation is a major control on the initiation location, timing, and propagation of convection. In the dry season, opposing offshore winds form a bulge of moist air above the lake surface overnight that extends from the surface to ~1.5 km and may trigger storms in high CAPE/low CIN environments. Such a feature has not been explicitly observed or modeled in previous literature. Storms over land on the preceding day are shown to alter the local atmospheric moisture and circulation to promote storm formation over the lake. The variety of initiation processes and differing characteristics of just two storms analyzed here show that the mean diurnal cycle over Lake Victoria alone is inadequate to fully understand storm formation. Knowledge of daily changes in local-scale moisture variability and circulations are keys for skillful forecasts over the lake.

Climatic Controls on Future Hydrologic Changes in a Subarctic River Basin in Canada

Abstract We describe a state-of-the-art framework for projecting hydrologic impacts due to enhanced warming and amplified moisture fluxes in the subarctic environment under anthropogenic climate change. We projected future hydrologic changes based on phase 5 of the Coupled Model Intercomparison Project global climate model simulations using the Variable Infiltration Capacity hydrologic model and a multivariate bias correction/downscaling method for the Liard basin in subarctic northwestern Canada. Subsequently, the variable importance of key climatic controls on a set of hydrologic indicators was analyzed using the random forests statistical model. Results indicate that enhanced warming and wetness by the end of century would lead to pronounced declines in annual and monthly snow water equivalent (SWE) and earlier maximum SWE. Prominent changes in the streamflow regime include increased annual mean and minimum flows, earlier maximum flows, and either increased or decreased maximum flows depending on interactions between temperature, precipitation, and snow. Using the variable importance analysis, we find that precipitation exerts the primary control on maximum SWE and annual mean and maximum flows, and temperature has the main influence on timings of maximum SWE and flow, and minimum flow. Given these climatic controls, the changes in the hydrologic indicators become progressively larger under the scenarios of 1.5°, 2.0°, and 3.0°C global mean temperature increases above the preindustrial period. Hence, the framework presented in this study provides a detailed diagnosis of the hydrologic changes as well as controls and interactions of the climatic variables, which could be generalized for understanding regional scale changes in subarctic/nival basins.

EFFECTS OF WATERSHED TOPOGRAPHY AND LAND USE ON BASEFLOW HYDROLOGY IN UPSTREAM KOMERING SOUTH SUMATERA, INDONESIA

The characteristic hydrology of a watershed is playing a major role in ensuring water resource availability. Rainfall and runoff responses in catchment area are part of the hydrology cycles. There are several factors to determine the characteristic of hydrology at the watershed, i.e. geological, region, soil and land cover. The existence of water resources is very substantial for surroundings. The rapid development in various sectors leads to water demands increase. Optimum utilization of water resources is needed in the sustainability of water resources or the need for integrated water resources management. The consequence of development is land use change, resulting in changes inflow characteristics, flood during the wet season and drought or discharge decrease in the dry season. Many studies associate higher watershed land cover with lower baseflows, attributed to high evapotranspiration rates, while other studies indicate increased baseflow with higher watershed land cover due to higher infiltration and recharge of subsurface storage. Adaptation and mitigation efforts are required to anticipate changes in the flow characteristics. The factors are key controls on base flow through their influence on infiltration, catchment and subsurface storage properties. This review underscores the need for more research that multiple aspects of the watershed system in explaining base flow. The result of average base flow and total flow ratio during 40 years (1971-2010) is 0.296 and the class of the hydrologic function as a BF / TF ratio value which indicated very poorly hydrology function of upstream Komering, although in certain hydrologic function was still in the good category.

Fluvio-lacustrine sedimentary processes and landforms on the distal Paraguay fluvial megafan (Brazil)

Fluvio-lacustrine sedimentary processes and landforms on the distal Paraguay fluvial megafan (Brazil)

Spatial Variability of Nitrate and Ammonium inPleistocene Aquifer of Central Yangtze River Basin.

It becomes increasingly important and challenging for nitrogen pollution prevention to identify key controls for spatial variability of nitrogen in groundwater that could be affected by multiple factors, including anthropogenic input, groundwater flow, and local geochemistry. This study characterized spatial variability of both nitrate and ammonium in the Pleistocene aquifer of central Yangtze River Basin and assessed the effect of various factors in controlling nitrate and ammonium levels based on multiple statistical approaches (correlation, geostatistics, multiple liner regression). The results indicate that nitrate is mostly influenced by Cl- that represents anthropogenic input, while Eh representing local redox state is a secondary variable influencing nitrate concentrations. The groundwater with elevated nitrate concentrations are estimated to occur mainly in areas with higher-permeability near-surface sediments which can facilitate more anthropogenic nitrate transport and less nitrate removal owing to more oxidized state. Ammonium is mostly correlated to Eh, followed by dissolved organic carbon (DOC), but only DOC improves significantly the accuracy of co-kriging prediction model. The groundwater with elevated ammonium concentrations are estimated to occur mainly in areas with more organic-rich sediments within or around the aquifer which can facilitate more ammonium release owing to natural organic matter consumption accompanying strong reducing conditions. The regional groundwater flow is not a factor significantly controlling nitrate or ammonium levels owing to flat topography and sluggish lateral flow.

Permeability of Clays and Shales

The low permeability of clays, shales, and other argillaceous lithologies makes them key controls of transport and deformation processes in the crust but is known for being challenging to characterize. As muds are modified by compaction and diagenesis to low-porosity shales, permeability can decrease by six or more orders of magnitude, but at large scales it is often dramatically and unpredictably increased by fractures, faults, and other features. Testing and inverse modeling show that petrophysical properties and the geological environment are dominant controls of clay and shale matrix permeability and its scale dependence. Active sedimentation and tectonism on continental margins cause large-scale permeability to vary with time, but in stable continent interiors it is unclear how regional permeability of argillaceous formations changes over time or, in most cases, what controls it. Although rarely considered, it is also unknown whether Darcian permeability adequately describes flow in clay-rich materials. ▪ Critical for problems in energy, water supply, waste isolation, and geologic hazards, clay and shale permeability remains problematic. ▪ Test data and inverse model analyses are beginning to reveal where and how permeability of clay and shale changes with scale. ▪ In clays and shales, causes of permeability scale effects, their time dependence, and even flow behavior continue to raise questions.

Gas Network Development in Compact Bentonite: Key Controls on the Stability of Flow Pathways

Compacted bentonite is proposed as an engineered barrier material within facilities for the geological disposal of radioactive waste. Barrier performance and its interaction with a free gas phase must be considered as part of sound repository design. This study involved the long-term experimental examination of gas flow in precompacted bentonite, with particular consideration of gas network stability. Results demonstrate that the stress field experienced by the clay is strongly coupled with gas flow. For the first time, three controls on this behaviour are considered: (i) injection flow rate, (ii) constant vs. variable gas pressure, and (iii) stimulation of the microfracture network. A detailed stress analysis is used to examine changes in the gas flow network. The results indicate a degree of metastability despite these changes, except in the case of stimulation of the microfracture network by removal of the primary drainage route. In this case, a rapid redevelopment of the gas flow network was observed. As such, availability of drainage pathways will represent a key control on the generation of peak gas pressures and distribution of gas within the engineered barrier. The cessation of gas flow is shown to result in crack closure and self-sealing. Observations from this study highlight that characterisation of the gas network distribution is of fundamental importance in predicting gas dissipation rates and understanding the long-term fate of gas in radioactive waste repositories.

Controlling Factors of Seismicity and Geometry in Double Seismic Zones

AbstractDouble seismic zones are ubiquitous features of subduction zones, where seismicity is distributed along two layers separated by a region with significantly less seismic activity. Dehydration embrittlement is thought to be responsible for earthquakes in the subducting crust (upper layer), but the case for it in the lithospheric mantle (lower layer) is less clear. We apply a recently developed relative relocation technique to characterize seismicity in 32 slab segments. The high‐precision hypocentral depths allow us to assign events to either the upper or lower layer and to separately estimate frequency size distributions for each plane. We find consistently larger b values, correlating with slab age, for the upper layer and roughly constant values for the lower. We also show that thermal parameter and plate age are the key controls on double seismic zone geometry. Our results point to a relatively dry lower layer and suggest a fundamentally different mechanism for lithospheric mantle earthquakes.

Controls on hydrocarbon accumulation in clastic reservoirs of the Tarim Craton, NW China

Controls on hydrocarbon accumulation in clastic reservoirs of the Tarim Craton, NW China

Interannual to Multi-decadal streamflow variability in West and Central Africa: Interactions with catchment properties and large-scale climate variability

Interannual to Multi-decadal streamflow variability in West and Central Africa: Interactions with catchment properties and large-scale climate variability

Seasonal dynamics and controls of deep soil water infiltration in the seasonally-frozen region of the Qinghai-Tibet plateau

Seasonal dynamics and controls of deep soil water infiltration in the seasonally-frozen region of the Qinghai-Tibet plateau

Microbial Organic Matter Utilization in High-Arctic Streams: Key Enzymatic Controls.

In the Arctic, climate changes contribute to enhanced mobilization of organic matter in streams. Microbial extracellular enzymes are important mediators of stream organic matter processing, but limited information is available on enzyme processes in this remote area. Here, we studied the variability of microbial extracellular enzyme activity in high-Arctic fluvial biofilms. We evaluated 12 stream reaches in Northeast Greenland draining areas exhibiting different geomorphological features with contrasting contents of soil organic matter to cover a wide range of environmental conditions. We determined stream nitrogen, phosphorus, and dissolved organic carbon concentrations, quantified algal biomass and bacterial density, and characterized the extracellular enzyme activities involved in catalyzing the cleavage of a range of organic matter compounds (e.g., β-glucosidase, phosphatase, β-xylosidase, cellobiohydrolase, and phenol oxidase). We found significant differences in microbial organic matter utilization among the study streams draining contrasting geomorphological features, indicating a strong coupling between terrestrial and stream ecosystems. Phosphatase and phenol oxidase activities were higher in solifluction areas than in alluvial areas. Besides dissolved organic carbon, nitrogen availability was the main driver controlling enzyme activities in the high-Arctic, which suggests enhanced organic matter mineralization at increased nutrient availability. Overall, our study provides novel information on the controls of organic matter usage by high-Arctic stream biofilms, which is of high relevance due to the predicted increase of nutrient availability in high-Arctic streams in global climate change scenarios.

Revizija kontrola aplikativnog softvera

All business processes are performed today with modern applicative software. Each application must have an adequately designed internal control whose role is to reduce the risks of the business process to an acceptable level. Internal application controls relate to input controls, processing controls, and output controls. The assurance of their adequacy and efficiency of the functioning should be given by an internal audit. Internal auditors, in order to carry out the audit of application control, must possess sufficient knowledge and skills on critical information and technology risks and technology-based audit techniques and application of audit software. The methodology for performing the audit of application control is based on significant risks and key controls. An audit product is an audit report sent to senior management. The results of the reports are essential in the process of risk management and the adoption of future business decisions on an adequate degree of reliance on audited application controls.

Optimization of welding process for box-type structural parts with complex spatial orientation

To solve welding process optimization of the complex box structure with spatial weld seam distribution, the finite element model is established in this study. The accuracy of the model is verified by the detection of the key position. As the characteristics of the process, the welding sequence is used to optimize the welding process. The results show that the maximum value is 1.714mm. The deformation near the two sides of the vertical plate is about 0.51mm. The deformation of the front and back Z plates is not consistent. There are 5 peaks in the strip, and the deformation ranges from 0.08mm to 0.12mm. The deformation comparison between the simulation and the measuredresult can meet the requirements of the engineering application and prove the correctness of the model. Through the optimization of the turning sequence, the deformation of the key position is reduced by 18.6%.By the optimization of the turning and the long-short weld seam, the deformation of the key position was reduced by 26.3%.By the sequence of the turning, the long-short and the key position weld seams optimized, the deformation is reduced by 34.6%. After the optimization of the sequence, the deformation range is between 0.1mm and 0.75mm.The average value is 0.36mm. The average value of welding deformation is at least 40.89% lower than that of the original process. The deformation of the key position controls below 1mm to achieve the implementation of the optimization plan expected that can effectively guide the production.

Climatic Controls on Watershed Reference Evapotranspiration Varied during 1961–2012 in Southern China

AbstractReference evapotranspiration (ETo) is an important hydrometeorological term widely used in understanding and projecting the hydrological effects of future climate and land use change. We conducted a case study in the Qinhuai River Basin that is dominated by a humid subtropical climate and mixed land uses in southern China. Long‐term (1961–2012) meteorological data were used to estimate ETo by the FAO‐56 Penman–Monteith model. The individual contribution from each meteorological variable to the trend of ETo was quantified. We found basin‐wide annual ETo decreased significantly (p < 0.05) by 3.82 mm/yr during 1961–1987, due to decreased wind speed, solar radiation, vapor pressure deficit (VPD), and increased relative humidity (RH). However, due to the increased VPD and decreased RH, the ETo increased significantly (p < 0.05) in spring, autumn, and annually at a rate of 2.55, 0.56, and 3.16 mm/yr during 1988–2012, respectively. The aerodynamic term was a dominant factor controlling ETo variation in both two periods. We concluded the key climatic controls on ETo have shifted as a result of global climate change during 1961–2012. The atmospheric demand, instead of air temperature alone, was a major control on ETo. Models for accurately predicting ETo and hydrological change under a changing climate must include VPD in the study region. The shifts of climatic control on the hydrological cycles should be considered in future water resource management in humid regions.

Microtopographic Drivers of Vegetation Patterning in Blanket Peatlands Recovering from Erosion

Blanket peatlands are globally rare, and many have been severely eroded. Natural recovery and revegetation (‘self-restoration’) of bare peat surfaces are often observed but are poorly understood, thus hampering the ability to reliably predict how these ecosystems may respond to climatic change. We hypothesised that morphometric/topographic-related microclimatic variables may be key controls on successional pathways and vegetation patterning in self-restoring blanket peatlands. We predicted the occurrence probability of four common peatland plant species (Calluna vulgaris, Eriophorum vaginatum, Eriophorum angustifolium, and Sphagnum spp.) using a digital surface model (DSM) generated from drone imagery at a pixel size of 20 cm, a suite of variables derived from the DSM, and an ensemble learning method (random forests). All four species models provided accurate fine-scale predictions of habitat suitability (accuracy > 90%, area under curve (AUC) > 0.9, recall and precision > 0.8). Mean elevation (within a 1 m radius) was often the most influential variable. Topographic position, wind exposure, and the heterogeneity or ruggedness of the surrounding surface were also important for all models, whilst light-related variables and a wetness index were important in the Sphagnum model. Our approach can be used to improve prediction of future responses and sensitivities of peatland recovery to climatic changes and as a tool to identify areas of blanket peatlands that may self-restore successfully without management intervention.