While contemporary auditing standards such as ISA 315 provide broad categories of client risks, prior research regarding audit resource allocation decisions has been based on individual client risks. This study contributes to the literature by using factor analysis to examine how individual...

Variations in fine wine prices can be prominent and have widespread economic and financial implications. Although fine wine investments are dominated by French wines, we demonstrate that significant international diversification benefits exist for investors in Italian, Australian and Portuguese...

We explore the effect of interest rates on risk taking and find that the direction of the effect depends on the type of risk involved. In a Bayesian setting, investments can be risky either because they are opaque --- i.e., their payoff-relevant signals are noisy --- or because they are...

We provide evidence on the effects of SFAS 133 on the risk relevance of accounting measures of bank derivative exposures to bond markets. First, we find that interest rate derivatives classified as hedging are more negatively associated with fixed-rate bond spreads after SFAS 133. We also find...

This paper proposes a framework for measuring and managing systemic risk. Current solvency regulations have been criticized for their focus on individual firms rather than the system as a whole. We show how an insurance program can be designed to deal with systemic risk through a risk charge on...

We examine the effect of litigation risk on management's decision to issue earnings forecasts. We use a new ex ante measure of litigation risk, namely, the Directors and Officers liability insurance premium. This measure bypasses significant problems associated with the estimation of ex ante...

The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks. Effective and efficient risk management in Islamic financial institutions has assumed...

In today's competitive environment the modern firm increasingly focuses on identifying, measuring and managing various risk exposures. Risk management is interwoven with the firm's business strategy and impacts considerably on its competitive position. Thus, management should develop an...

Failure to take account of the mismatch between the assets in defined --benefit pension plans -- primarily equities -- and the liabilities -- deferred fixed annuities -- has long been a major unrecognized source of financial instability. The underfunding problems now facing state and local...

We present a new approach to the pricing of catastrophe event derivatives that does not assume a fully diversifiable event risk. Instead, we assume that the event occurrence and intensity affect the return of the market portfolio of an agent that trades in the event derivatives. Based on this...