German Setting Research Articles

Error Announcements, Auditor Turnover, and Earnings Management Evidence from Germany

This paper provides additional insights how shareholders perceive error announcements in the German enforcement system whose task is to ensure a preventive and sanctioning function via adverse publicity. Although US research provides large and unambiguous evidence of sanctions which are based on capital market reactions, but also personal consequences of responsible managers and auditors, the few studies which investigated the German enforcement system do not yield comparable results, thereby questioning its efficacy. Building on this, we investigate whether firms with error announcements exhibit higher auditor turnover than comparable non-error firms in the German setting. In addition, we investigate the impact of auditor changes on accounting quality. We find some evidence that firms with auditor changes exhibit an increase in accounting quality, which however already takes place in the gap year between error announcement and auditor change. Consequently, we interpret auditor changes serving as a ‘label’ of improved corporate governance, rather than indeed improving corporate governance.

German Settings of Ossianic Texts, 1770–1815 ed. by Sarah Clemmens Waltz

German Settings of Ossianic Texts, 1770–1815 ed. by Sarah Clemmens Waltz

Productivity in German manufacturing firms: Does fixed‐term employment matter?

AbstractUsing a large data set of German manufacturing establishments and various panel data models, the authors investigate the relationship between labour productivity and the use of fixed‐term employment, taking account of the possible distortions that may result from self‐selection into the use of fixed‐term contracts. Their empirical results provide no evidence for the expected inverse U‐shaped relationship between fixed‐term employment and labour productivity, and testing for a linear relationship leads to mostly negative coefficients that are only significant in a few specifications. Overall, their results thus indicate that there is no significant relationship between the use of fixed‐term contracts and labour productivity.

The information value of central school exams

The central vs. local nature of high-school exit exam systems can have important repercussions on the labor market. By increasing the informational content of grades, central exams may improve the sorting of students by productivity. To test this, we exploit the unique German setting where students from states with and without central exams work on the same labor market. Our difference-in-difference model estimates whether the earnings difference between individuals with high and low grades differs between central and local exams. We find that the earnings premium for a one standard-deviation increase in high-school grades is indeed 6% when obtained on central exams but less than 2% when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.

Cost utility analysis of the SQ(®) HDM SLIT-tablet in house dust mite allergic asthma patients in a German setting.

BackgroundAsthma affects an estimated 300 million people worldwide with the condition associated with significant healthcare utilisation costs and a large impact on patient quality of life. The SQ® HDM SLIT-tablet (ACARIZAX®, Hørsholm, Denmark) is a sublingually administered allergy immunotherapy tablet for house dust mite allergic asthma and allergic rhinitis and has recently been licensed in Europe.ObjectiveTo assess the cost-effectiveness of ACARIZAX plus pharmacotherapy versus placebo plus pharmacotherapy in patients with house dust mite allergic asthma that is uncontrolled by inhaled corticosteroids, in a German setting. Eligible patients should also have symptoms of mild to severe allergic rhinitis.MethodsA cost utility analysis was undertaken, based on the results of a European phase III randomised controlled trial, in which ACARIZAX was compared with placebo with both treatment groups also receiving pharmacotherapy in the form of inhaled corticosteroids and short-acting β2-agonists. Cost and quality-adjusted life years from the trial were extrapolated over a nine year time horizon and the incremental cost-effectiveness ratio calculated to compare treatment options.ResultsACARIZAX plus pharmacotherapy was estimated to generate 6.16 quality-adjusted life years per patient at a cost of €5658, compared with 5.50 quality-adjusted life years (QALYs) at a cost of €2985 for placebo plus pharmacotherapy. This equated to an incremental cost of €2673, incremental QALYs of 0.66 and an incremental cost-effectiveness ratio (ICER) of €4041. The ICER was, therefore, substantially lower than the €40,000 willingness-to-pay threshold per QALY adopted for the analysis. Deterministic sensitivity analyses indicate the results are most sensitive to the utility score of ACARIZAX patients during years 2 and 3 of treatment.ConclusionThis analysis indicates that ACARIZAX plus pharmacotherapy is cost-effective compared with placebo plus pharmacotherapy for house dust mite allergic asthma patients in Germany. If a disease-modifying effect can be proven the results of this analysis may underestimate the true benefits of ACARIZAX.

Have adults lost their sense of play? An observational study of the social dynamics of physical (in)activity in German and Hawaiian leisure settings.

BackgroundPhysical inactivity is one of the biggest health problems nowadays. Recent research shows that socio-cultural barriers to physical activity are mostly related to modern lifestyles. However, there is a lack of research on how social and group dynamics influence engagement in physical activity. Furthermore, there are few cross-cultural studies that have compared the social dynamics of (in)activity in different cultural settings. This paper therefore aims to analyse how social group dynamics influence physical activity and inactivity in informal social environments and whether physical activity is influenced by the socio-cultural settings.MethodsThe paper presents the qualitative data collected within a covert participant observation study. Data was collected by keeping observational notes in order to record typical, regular patterns regarding physical (in)activity related behaviour of groups at an artificial open air swimming pool in Germany and a natural pond in Hawai’i. The data collection period was eight and a half months. Data was interpreted based on constant comparative analysis in order to identify most generative patterns in the field notes.ResultsGroup structures appear to play a significant role regarding the activity of the group members. In this study, we identified four key factors that influence group based physical activity: 1) Physical activity seems to be a group disturbing behaviour particularly in larger groups of adults; 2) Physical activity appears to be more functional and less joyful in adults than in children; 3) Group activity is influenced by (in)activity anchors, including ‘domestication’ of a group’s site, obesity, and controlling parents. 4) Physical activity is to a certain extent socially contagious, particularly with regard to playful activities.ConclusionsSuccessful promotion of physical activity should target the social structures of inactive individuals’ groups. In this regard, one of the main problems is that fun and wellbeing, as very important targets of public health strategies for the adult population, appear not to be compatible with physical activity. Developing strategies to reframe physical activity rather as ‘fun’ and less as functional may be one way to engage inactive individuals in physical activity in leisure settings.

An estimate of the public health impact and cost-effectiveness of universal vaccination with a 9-valent HPV vaccine in Germany

ABSTRACTIntroduction: Since 2007, the German Standing Vaccination Committee recommends HPV vaccination for girls aged 12–17 with a 2- (Cervarix®) or 4-valent (Gardasil®) vaccine. A 9-valent vaccine (Gardasil 9®) recently received a European market authorization in 2015.Methods: A dynamic transmission model was calibrated to the German setting and used to estimate costs and QALYs associated with vaccination strategies.Results: Compared to the current vaccination program, the 9-valent vaccine extended to boys shows further reductions of 24% in the incidence of cervical cancer, 30% and 14% in anal cancer for males and females, as well as over a million cases of genital warts avoided after 100 years. The new strategy is associated with an ICER of 22,987€ per QALY gained, decreasing to 329€ when considering the vaccine switch for girls-only.Conclusion: Universal vaccination with the 9-valent vaccine can yield significant health benefits when compared to the current program.

Three Points about Current German Anthropology

Comment on World Anthropology with an Accent: the Discipline in Germany since the 1970s, by Bierschenk, Thomas, Krings, Matthias, and Carola Lenz

Risk calculators-methods, development, implementation, and validation.

A surgical risk calculator (SRC) estimates the probabilities of unfavorable outcomes such as complications or death after a specific surgery. The risk estimates are based on information regarding the patient's medical history and his current status. They are calculated using risk models derived from the analysis of data from a large number of previous patients in a similar clinical situation. This paper discusses several aspects of the SRC development and its implementation into clinical practice: the development of the statistical risk models, their validation and software implementation, the use of the SRC output for shared decision making in clinical settings, and the evaluation of the SRC's impact on individual patient outcomes as well as on the institution's quality of care of the clinical institution. Probably the most elaborate SRC is the ACS NSQIP SRC. A comparable project was started by the German Society for Visceral and General Surgery (DGAV) in the framework of its Study, Documentation, and Quality Center (StuDoQ). It is relevant to consider that the transportability of a SRC from a US American to a German setting is not straightforward. Risk calculators are important instruments for shared decision making between patients and doctor. Their implementation into clinical practice has to solve technical issues, and it is related to appropriate training of clinicians. There are specific study designs to evaluate the clinical impact of a SCR.

Epidemiological impact and cost-effectiveness of universal vaccination with Bexsero® to reduce meningococcal group B disease in Germany

Bexsero, a new vaccine against serogroup B meningococcal disease (MenB), was licensed in Europe in January 2013. In Germany, Bexsero is recommended for persons at increased risk of invasive meningococcal disease, but not for universal childhood vaccination. To support decision making we adapted the independently developed model for England to the German setting to predict the potential health impact and cost-effectiveness of universal vaccination with Bexsero® against MenB disease. We used both cohort and transmission dynamic mathematical models, the latter allowing for herd effects, to consider the impact of vaccination on individuals aged 0–99 years. Vaccination strategies included infant and adolescent vaccination, alone or in combination, and with one-off catch-up programmes. German specific data were used where possible from routine surveillance data and the literature. We assessed the impact of vaccination through cases averted and quality adjusted life years (QALY) gained and calculated costs per QALY gained. Assuming 65% vaccine uptake and 82% strain coverage, infant vaccination was estimated to prevent 15% (34) of MenB cases over the lifetime of one birth cohort. Including herd effects from vaccination increased the cases averted by infant vaccination to 22%, with an estimated 8461 infants requiring vaccination to prevent one case. In the short term the greatest health benefit is achieved through routine infant vaccination with large-scale catch-up, which could reduce cases by 24.9% after 5 years and 27.9% after 10 years. In the long term (20+ years) policies including routine adolescent vaccination are most favourable if herd effects are assumed. Under base case assumptions with a vaccine list price of €96.96 the incremental cost-effectiveness ratio (ICER) was >€500,000 per QALY for all considered strategies. Given the current very low incidence of MenB disease in Germany, universal vaccination with Bexsero® would prevent only a small absolute number of cases, at a high overall cost.

Internal audit function quality and financial reporting: results of a survey on German listed companies

Most prior studies on internal audit function (IAF) quality and financial reporting have focused on the US setting and have found a positive association between IAF quality proxies and both financial reporting quality and audit efficiency. In this study, we apply the German setting that is characterized by a two-tier board system of corporate governance and different prerequisites for the serving-two-masters problem. This might weaken the IAF’s ability to monitor financial reporting-related processes. To analyze this, we use survey data to measure IAF quality in the German setting and run multiple regressions to examine the association of several IAF quality characteristics and a self-developed IAF quality score with financial reporting quality and audit efficiency. The results show that also in a two-tier system, a high-quality IAF is able to contribute to both financial reporting quality and audit efficiency. Our findings support the notion that the IAF serves as an essential element of effective corporate governance and plays an important role in financial reporting. Moreover, as a practical implication of interest to regulators and managers, we identify that the external certification of the IAF and internal audit-related certifications of IAF employees may contribute to higher financial reporting quality and lower audit fees.

Who is responsible for a safe discharge from hospital? A prospective risk analysis in the German setting

A representative national survey on risk management in German hospitals has recently identified hospital discharge as a key area of attention. Based on the consensus in the literature about the need to address patient safety at system level, this paper does not only look at the processes of discharge designed by single hospitals, but also takes account of the broader legal and regulatory framework. Failure Mode and Effects Analysis (FMEA) was applied for risk identification and assessment. For the analysis of the current status in hospitals, three hospitals were interviewed about their discharge processes. For the system perspective, the legislative and self-administrative framework specific for the German setting was reviewed. The FMEA allowed the identification of a number of actions for risk control in the responsibility of the hospitals and within the framework. Some risks are mainly caused by the legal framework, whereas others can only be addressed by the hospitals themselves. The continuity of drug treatment and the lack of back-up systems after discharge were identified as posing relevant risks to patient safety. Rich interaction was found between the hospitals and the framework they work in impacting patient safety at hospital discharge. The contribution of the legal and regulatory framework to patient safety needs to be taken into account more actively by policy makers in the future.

Increased materiality judgments in financial accounting and external audit: a critical comparison between German and international standard setting

The materiality principle supports the information function of accounting in order to enhance investors' decisions. Therefore, materiality guides the entity to present relevant information and to prevent information overload. This decision is mostly subjective and is based primarily on the individual's judgement in applying vague legal concepts. This could result in a greater expectation gap between management information and investors' understanding. The EU accounting directive 2013/34/EU standardises materiality to harmonise with International Financial Reporting Standards (IFRS). However, the German legislator did not change the national accounting rules German Commercial Code (GCC). Moreover, the new EU audit regulation (EU) No 537/2014 requires the disclosure of the quantitative level of materiality thresholds in the audit report. Guidelines remain inadequate, although they are intended to provide clearly defined rules and to avoid boilerplate checklists. Our paper focuses on a conceptual comparison of materiality between the GCC and IFRS/ISA, and on the implications for eliminating the challenge involved in information overload.

Increased materiality judgments in financial accounting and external audit: a critical comparison between German and international standard setting

Increased materiality judgments in financial accounting and external audit: a critical comparison between German and international standard setting

Non-audit services, audit quality and enforcement - evidence from German enforcement examinations

In this paper, I use privileged data on German enforcement examinations to analyse the association between non-audit service (NAS) fees paid to the statutory auditor and audit quality or auditor independence, respectively. The results show that in the German setting for the years from 2005 to 2012, a period with already tightened regulation on NAS, there is neither a positive nor a negative significant association between NAS fees and enforcement examinations resulting in an error finding. The results do not change when controlling for the specific type of NAS as well as for abnormal NAS fees. Thus, the findings do neither provide support for the occurrence of knowledge spillovers nor do I find evidence indicating that NAS impair auditor independence. However, I find some evidence that the level of audit fees (and total fees) is positively associated with the likelihood of enforcement examinations resulting without a finding of material misstatements. In light of the observable pressure on audit fees in the German market, this is consistent with the notion that higher audit fees may signal higher audit effort.

Adaptation, psychometric properties and feasibility of the Professionalism Scale Germany

Pre- and postgraduate education is meant to be competency-based. Over the last two decades various competency frameworks have been published. An important aspect of competency is professionalism, being discussed widely in the literature while a clear-cut definition is still lacking. The purpose of this study was to translate the Nijmegen Professionalism Scale into the German language, to adapt the scale to the German setting and to examine the psychometric properties, test-retest reliability and feasibility of the culturally adapted instrument designed to assess professionalism in general practice, in addition to the validity of the concept of professionalism and to testify the transfer across linguistic, cultural and societal differences. After translating the Nijmegen Professional Scale into German, we conducted its cultural adaptation, the German Professionalism Scale (Pro-D). Its psychometric properties were assessed using Cronbach's α, descriptive statistics, and test-retest reliability. The validation of the construct was analysed by confirmatory factor analysis. Feasibility was confirmed in interviews with GP trainees and their trainers. A total of 133 trainees completed the Pro-D. The Pro-D showed high internal consistency (Cronbach's α 0.93) and good test-retest reliability (Spearman's rank correlation and Wilcoxon's matched-pairs test) for the different domains. Confirmatory factor analysis was unable to establish construct validity. Change in sensitivity of the instrument was good. Statements of interviews confirmed the feasibility of the new instrument. We found good psychometric properties for the Pro-D. This might indicate transferability of the concept across linguistic, cultural and societal differences although the concept of professionalism was not replicated in a confirmatory factor analysis.

The Use Of Real World Evidence To Support Market Access Of Medical Devices – Implications For The German Setting

The Use Of Real World Evidence To Support Market Access Of Medical Devices – Implications For The German Setting

Cost-utility analysis of percutaneous mitral valve repair in inoperable patients with functional mitral regurgitation in German settings.

BackgroundTo determine the cost-effectiveness of the percutaneous mitral valve repair (PMVR) using Carillon® Mitral Contour System® (Cardiac Dimensions Inc., Kirkland, WA, USA) in patients with congestive heart failure accompanied by moderate to severe functional mitral regurgitation (FMR) compared to the prolongation of optimal medical treatment (OMT).MethodsCost-utility analysis using a combination of a decision tree and Markov process was performed. The clinical effectiveness was determined based on the results of the Transcatheter Implantation of Carillon Mitral Annuloplasty Device (TITAN) trial. The mean age of the target population was 62 years, 77 % of the patients were males, 64 % of the patients had severe FMR and all patients had New York Heart Association functional class III. The epidemiological, cost and utility data were derived from the literature. The analysis was performed from the German statutory health insurance perspective over 10-year time horizon.ResultsOver 10 years, the total cost was €36,785 in the PMVR arm and €18,944 in the OMT arm. However, PMVR provided additional benefits to patients with an 1.15 incremental quality-adjusted life years (QALY) and an 1.41 incremental life years. The percutaneous procedure was cost-effective in comparison to OMT with an incremental cost-effectiveness ratio of €15,533/QALY. Results were robust in the deterministic sensitivity analysis. In the probabilistic sensitivity analysis with a willingness-to-pay threshold of €35,000/QALY, PMVR had a 84 % probability of being cost-effective.ConclusionsPercutaneous mitral valve repair may be cost-effective in inoperable patients with FMR due to heart failure.

Wages in High-Tech Start-Ups Do Academic Spin-Offs Pay a Wage Premium?

Due to their origin from universities, academic spin‐offs operate at the forefront of the technological development. Therefore, spin‐offs exhibit a skill‐biased labour demand, i.e. spin‐offs have a high demand for employees with cutting edge knowledge and technical skills. In order to accommodate this demand, spin‐offs may have to pay a relative wage premium compared to other high‐tech start‐ups. However, neither a comprehensive theoretical assessment nor the empirical literature on wages in start‐ups unambiguously predicts the existence and the direction of wage differentials between spin‐offs and non‐spin‐offs. This paper addresses this research gap and examines empirically whether or not spin‐offs pay their employees a wage premium. Using a unique linked employer‐employee data set of German high‐tech start‐ups, we estimate Mincer‐type wage regressions applying the Hausman‐Taylor panel estimator. Our results show that spin‐offs do not pay a wage premium in general. However, a notable exception from this general result is that spin‐offs that commercialise new scientific results or methods provide higher wages to employees with linkages to the university sector – either as university graduates or as student workers.

Consequences of Error Announcements on Industry Peers: Capital Market Reaction and Financial Reporting Decisions

This paper analyzes the reactions of investors and management to an error announcement within an industry. We investigate capital market reactions as well as changes in the financial reporting decisions for a sample of CDAX®-listed industry peers to error firms in Germany. We find that peers suffer on average negative cumulative abnormal returns of -0.92% within the five day event window. More precisely, we show the contagion effect for the German setting by analyzing industry peers to error firms with negative abnormal returns. This finding can be interpreted as a loss of investors’ confidence in the reliability of financial reporting within the respective industry. As a consequence of the error announcement, all industry peers might have incentives to regain reputation. Therefore, we also examine whether industry peers change the transparency of financial reporting after the event. Our results reveal that industry peers present more informative financial reporting as measured by more timely loss recognition after the error announcements. Nevertheless, we find no evidence for an increase in the preciseness of forecast reporting caused by the event. Supplemental tests reveal no significant increase in auditor turnover after an industry peer’s error announcement, suggesting that industry peers do not penalize their auditors after the stock price decline.