Why Risk Assessments Fail

Over the past decades there has been a series of major corporate governance crises. After each wave post-mortems were convened and efforts made by regulators to identify root causes. The good news—or bad, depending on your perspective—for the internal audit profession is that rarely were questions raised by those commissions and regulators about the role internal audit should have played to avoid the current crisis being reviewed.

What the commissions did call for was a massive global focus on the need for boards of directors to better oversee risk in their organizations. As pressure on directors mounts globally to improve risk oversight, their dissatisfaction with traditional internal audit services is also growing. This article suggests the root cause of the mounting internal audit customer dissatisfaction globally is internal audit “paradigm paralysis”¹—a strong attachment to traditional ways of doing internal audits that no longer meet the needs of key customers. Specific recommendations are made to help internal auditors transition past the paradigm paralysis and adopt new methods that better meet the needs of its key customers. *This article first appeared in ACCA UK’s Internal Audit e-bulletin.     

COMPARING ANNs AND GENETIC PROGRAMMING FOR VOICE QUALITY ASSESSMENT POST-TREATMENT

In the U.K., the rehabilitation of a patient's voice following treatment for cancer of the larynx is managed by Speech and Language Therapists (SALT), who listen to a patient's stylized speech and then use their experience and domain knowledge to make an assessment of the current quality of the patient's voice. This process is very subjective and time consuming, and could benefit from using AI techniques to provide objective, reproducible assessments of voice quality. A comparative study of voice quality assessment post-treatment using Artificial Neural Networks (ANN), the preferred AI technique in this application area, and Genetic Programming (GP) is described, using the same dataset, training, and verification procedures. The GP approach was found to give more accurate classifications of bad quality (immediately post-treatment) and good quality (recovered) voicings than the ANN, and in addition, gave indication of the most significant parameters in the input dataset.     

Calluna vulgaris foliar pigments and spectral reflectance modelling

Biochemical and leaf structural state variables influencing the reflectance of Calluna vulgaris, a dwarf shrub, in the 400–950 nm spectral region have been measured over a 2 year period and were found to display considerable intra- and inter-annual variability. For the leaf structural parameters, the annual variability observed may be attributed to systematic seasonal fluctuations following Calluna growth and senescent cycle, and the inter-annual variation may be attributed to its response to each year's prevailing meteorological and solar illumination conditions. Chlorophyll-a and -b (chl-a and -b), total carotenoids and anthocyanins have been identified within the ‘shoots and leaves’ samples and their change over two growth and senescent cycles quantified. The LIBERTY radiative transfer model was adapted and used to estimate the Calluna chl-a and -b, total carotenoid and anthocyanin content in vivo absorption spectra. The modified LIBERTY model (LIBERTY3P), incorporating the in vivo pigment absorption spectra and parameterized with the biochemical variables measured, and leaf structural parameters determined during this work, has enabled the reflectance of Calluna ‘shoots and leaves’ to be modelled and compared with reflectances measured from the same samples, in time-series, through the 2005 and 2006 growth cycles. The relative error between modelled and measured reflectances was found to vary from between ±5% to ±15% dependent on wavelength and the time of year of the sampling interval. Greatest errors between measured and modelled reflectances were noted at the beginning of seasonal growth and lowest during midsummer. Differences between the chl-a and -b in vivo absorption spectrum determined during this work and the chlorophyll-a (chl-a) and chlorophyll-b (chl-b) in vivo absorption spectra, caused by a varying chl-a:chl-b ratios, are a possible cause for the inconsistencies between measured and modelled reflectance spectra.     

Space-borne study of seasonal,multi-year,and decadal phytoplankton dynamics in the Bay of Biscay

Seasonal and inter-annual variations in phytoplankton community abundance in the Bay of Biscay are studied. Preliminarily processed by the National Aeronautics and Space Administration (NASA) to yield normalized water-leaving radiance and the top-of-the-atmosphere solar radiance, Sea-viewing Wide Field-of-View Sensor (SeaWiFS), Moderate Resolution Imaging Spectroradiometer (MODIS), and Coastal Zone Color Scanner (CZCS) data are further supplied to our dedicated retrieval algorithms to infer the sought for parameters. By applying the National Oceanic and Atmospheric Administration's (NOAA's) Advanced Very High Resolution Radiometer (AVHRR) data, the surface reflection coefficient in the only band in the visible spectrum is derived and employed for analysis. Decadal bridged time series of variations of diatom-dominated phytoplankton and green dinoflagellate Lepidodinium chlorophorum within the shelf zone and the coccolithophore Emiliania huxleyi in the pelagic area of the Bay are documented and analysed in terms of impacts of some biogeochemical and geophysical forcing factors.

It is shown that in the shelf zone of the Bay, the diatom-dominated phytoplankton community variations are predominantly controlled by river discharge variations, by water column stratification conditions (forming in winter–early spring), and by wind action (resulting in such phenomena as up-wellings and sediment re-suspension).

Satellite data indicate that while in river deltas and adjoining waters the L. chlorophorum blooming events occur annually, in the Iroise Sea and near the Bailiwick of Guernsey, they happen irregularly. It is thought that such an irregular pattern, possibly, arises from L. chlorophorum competing with other phytoplankton species for nutrients.

E miliania huxleyi blooms are found to occur nearly every year in the northern part of the Bay, whereas in the central area, this phenomenon occurs very irregularly. Satellite data indicate that variations in the water chemistry (variations in the nitrogen : phosphorus ratio due to preceding blooms of diatoms), and the incident irradiance level (degree of cloudiness), are important factors controlling the occurrence of E. huxleyi blooming in the central part of the Bay. Covering a 30 year period, the bridged data from CZCS, AVHRR, SeaWiFS, and MODIS imply that climate change might be responsible for the observed increase in E. huxleyi blooming events in the Bay since 1979.     

Effects of advertising billboards during simulated driving

There is currently a great deal of interest in the problem of driver distraction. Most research focuses on distractions from inside the vehicle, but drivers can also be distracted by objects outside the vehicle. Major roads are increasingly becoming sites for advertising billboards, and there is little research on the potential effects of this advertising on driving performance. The driving simulator experiment presented here examines the effects of billboards on drivers, including older and inexperienced drivers who may be more vulnerable to distractions. The presence of billboards changed drivers’ patterns of visual attention, increased the amount of time needed for drivers to respond to road signs, and increased the number of errors in this driving task.     

Goal‐based Caustics

We propose a novel system for designing and manufacturing surfaces that produce desired caustic images when illuminated by a light source. Our system is based on a nonnegative image decomposition using a set of possibly overlapping anisotropic Gaussian kernels. We utilize this decomposition to construct an array of continuous surface patches, each of which focuses light onto one of the Gaussian kernels, either through refraction or reflection. We show how to derive the shape of each continuous patch and arrange them by performing a discrete assignment of patches to kernels in the desired caustic. Our decomposition provides for high fidelity reconstruction of natural images using a small collection of patches. We demonstrate our approach on a wide variety of caustic images by manufacturing physical surfaces with a small number of patches.     

Resonant ultrasound spectroscopy of cylinders over the full range of Poisson's ratio

Mode structure maps for freely vibrating cylinders over a range of Poisson's ratio, ν, are desirable for the design and interpretation of experiments using resonant ultrasound spectroscopy (RUS). The full range of isotropic ν (-1 to +0.5) is analyzed here using a finite element method to accommodate materials with a negative Poisson's ratio. The fundamental torsional mode has the lowest frequency provided ν is between about -0.24 and +0.5. For any ν, the torsional mode can be identified utilizing the polarization sensitivity of the shear transducers. RUS experimental results for materials with Poisson's ratio +0.3, +0.16, and -0.3 and a previous numerical study for ν = 0.33 are compared with the present analysis. Interpretation of results is easiest if the length∕diameter ratio of the cylinder is close to 1. Slight material anisotropy leads to splitting of the higher modes but not of the fundamental torsion mode.     

Weakly Monotonic Averaging Functions

Monotonicity with respect to all arguments is fundamental to the definition of aggregation functions. It is also a limiting property that results in many important nonmonotonic averaging functions being excluded from the theoretical framework. This work proposes a definition for weakly monotonic averaging functions, studies some properties of this class of functions, and proves that several families of important nonmonotonic means are actually weakly monotonic averaging functions. Specifically, we provide sufficient conditions for weak monotonicity of the Lehmer mean and generalized mixture operators. We establish weak monotonicity of several robust estimators of location and conditions for weak monotonicity of a large class of penalty‐based aggregation functions. These results permit a proof of the weak monotonicity of the class of spatial‐tonal filters that include important members such as the bilateral filter and anisotropic diffusion. Our concept of weak monotonicity provides a sound theoretical and practical basis by which (monotonic) aggregation functions and nonmonotonic averaging functions can be related within the same framework, allowing us to bridge the gap between these previously disparate areas of research.     

Embedded (Lead) Users as Catalysts to Product Diffusion

Firms can harness social user networks not only for ideation, but also to accelerate and facilitate diffusion of new product introductions. They select individuals whose own product adoptions and opinions influence adoption decisions of others. In this paper we transfer this rationale to firm employees. We focus on ‘embedded users’ who are employees of a firm, but at the same time users of the firm's products. We aim to find out if their access to user networks, use experience and lead userness impact their opinion leadership and domain‐specific innovativeness. We also show how cognitive empathy towards external users is a mechanism to explain these relationships. Drawing on the user innovation and consumer behaviour literature, we derive and test eight hypotheses on a sample of 54 firm employees in gaming hardware firms. We find that lead userness is positively related to domain‐specific innovativeness and opinion leadership, but use experience only to the former. Cognitive empathy mediates all relationships in our study. To facilitate embedded users' tendency to act as opinion leaders and to adopt new products, managers should encourage their employees to use the firm's products to build use experience and thus develop cognitive empathy towards external users.     

Design and modeling of a continuously variable piezoelectric RF MEMS switch

A structure for a piezoelectrically actuated capacitive RF MEMS switch that is continuously variable between the ON state and the OFF state has been proposed. The device is based on variable capacitance using a cantilever fixed at both ends that is actuated using a lead zirconate titanate thin film. Because the device is contactless, the reliability issues common in contact-type RF MEMS switches can be avoided. A comprehensive mathematical model has been developed in order to study the performance of the device, and allow for design optimization. Electrical measurements on test structures have been compared with the performance predicted by the model, and the results used to design a prototype RF MEMS switch. The model and simulations indicate the proposed switch structure can provide an insertion loss better than 0.7 dB and an isolation of more than 10 dB between 6 and 14 GHz with an actuation voltage of 22.4 V. The state of the device is continuously variable between the ON state and the OFF state, with a tunable range of capacitance of more than 15\(\times \).