Economic growth and financial statement verification

We use a proprietary data set of financial statements collected by banks to examine whether economic growth is related to the use of financial statement verification in debt financing. Exploiting the distinct economic growth and contraction patterns of the construction industry over the years 2002–2011, our estimates reveal that banks reduced their collection of unqualified audited financial statements from construction firms at nearly twice the rate of firms in other industries during the housing boom period before 2008. This reduction was most severe in the regions that experienced the most significant construction growth. These trends reversed during the subsequent housing crisis in 2008–2011 when construction activity contracted. Moreover, using bank‐ and firm‐level data, we find a strong negative (positive) relation between audited financial statements during the growth period, and subsequent loan losses (construction firm survival) during the contraction period. Collectively, our results reveal that macroeconomic fluctuations produce temporal shifts in the overall level of financial statement verification and temporal shifts in verification are related to bank loan portfolio quality and borrower performance.Accepted manuscrip

The economic effects of special purpose entities on corporate tax avoidance

This study provides the first large‐sample evidence on the economic tax effects of special purpose entities (SPEs). These increasingly common organizational structures facilitate corporate tax savings by enabling sponsor‐firms to increase tax‐advantaged activities and/or enhance their tax efficiency (i.e., relative tax savings of a given activity). Using path analysis, we find that SPEs facilitate greater tax avoidance, such that an economically large amount of cash tax savings from research and development (R&D), depreciable assets, net operating loss carryforwards, intangible assets, foreign operations, and tax havens occur in conjunction with SPE use. We estimate that SPEs help generate over $330 billion of incremental cash tax savings, or roughly 6% of total U.S. federal corporate income tax collections during the sample period. Interaction analyses reveal that SPEs enhance the tax efficiency of intangibles and R&D by 61.5% to 87.5%. Overall, these findings provide economic insight into complex organizational structures supporting corporate tax avoidance.Accepted manuscrip

Cyclische Diazastannylene. - XXVI : Funktionalisierte Cyclodisilazane aus cyclischen Diazanstannylenen

1,3-Di-tert-butyl-2,2-dihalogen-4,4-dimethylcyclodisilazane Substituent Chlor (3), Brom (4), Iod (5)) lassen sich aus dem 1,3-Di-tert-butyl-2,2-dimethyl-1,2,3,2,42-diazasilastannetidin (1) durch Umsetzung mit SiCl4, SiBr4 oder SiI4 erhalten. Je leichter das Halogen im Tertahalogenid ist, um so drastischere Reaktionsbedingungen müssen gewählt werden. Aus 4 ist durch Umsetzung mit Natriumazid auch das entsprechende Si, Si-Diazid (9) zugänglich. Alle neu synthetisierten Verbindungen 3, 4, 5 und 9 lösen sich als Monomere in Benzol

Economic Growth and Financial Statement Verification

We use a proprietary data set of financial statements collected by banks to examine whether economic growth is related to the use of financial statement verification in debt financing. Exploiting the distinct economic growth and contraction patterns of the construction industry over the years 2002–2011, our estimates reveal that banks reduced their collection of unqualified audited financial statements from construction firms at nearly twice the rate of firms in other industries during the housing boom period before 2008. This reduction was most severe in the regions that experienced the most significant construction growth. These trends reversed during the subsequent housing crisis in 2008–2011 when construction activity contracted. Moreover, using bank- and firm-level data, we find a strong negative (positive) relation between audited financial statements during the growth period, and subsequent loan losses (construction firm survival) during the contraction period. Collectively, our results reveal that macroeconomic fluctuations produce temporal shifts in the overall level of financial statement verification and temporal shifts in verification are related to bank loan portfolio quality and borrower performance.Sloan School of ManagementUniversity of Illinois at Urbana-Champaign (PricewaterhouseCoopers Faculty Fellowship

Augmenter of liver regeneration: An important intracellular survival factor for hepatocytes

Background/Aims: Augmenter of liver regeneration (ALR), a protein synthesized and stored in hepatocytes, is associated with mitochondria, and possesses sulfhydryl oxidase and cytochrome c reductase activities. We sought to determine the effects of ALR depletion in hepatocytes by antisense oligonucleotide transfection. Methods: Rat hepatocytes in primary culture were transfected with antisense oligonucleotide for ALR mRNA (ALR-AS) or scrambled oligonucleotide. Various analyses were performed at times up to 24 h after transfection. Results: Treatment with ALR-AS caused a decrease in ALR mRNA, cellular depletion of ALR protein primarily from mitochondria, and decreased viability. Flow cytometric analysis of ALR-AS-transfected hepatocytes stained with annexin-Vcy3 and 7-aminoactinomycin D revealed apoptosis as the predominant cause of death up to 6 h; incubation beyond this time resulted in necrosis in addition to apoptosis. ALR-AS-transfection caused release of mitochondrial cytochrome c, activation of caspase-3, profound reduction in the ATP content, and cellular release of LDH. Inhibition of caspase-3 inhibited the early phase of ALR-AS-induced death but not the late phase that included ALR and LDH release. Conclusions: These results suggest that ALR is critically important for the survival of hepatocytes by its association with mitochondria and regulation of ATP synthesis. © 2008 European Association for the Study of the Liver

Do Smoothing Activities Indicate Higher or Lower Financial Reporting Quality? Evidence from Effective Tax Rates

Prior literature is mixed as to whether smoothing through accruals indicates higher or lower financial reporting quality (Tucker and Zarowin 2006; Jayaraman 2008; Dechow et al. 2010). Motivated by the unique inter-temporal features and reporting incentives of tax expense, we provide new evidence on this debate by examining the link between smoothing of GAAP effective tax rates (ETRs) and the likelihood of financial restatements. Different from earnings smoothing’s insignificant relation with restatements, we find that ETR smoothing through tax accruals is associated with a lower likelihood of financial restatement and lower likelihood of tax-related financial reporting fraud. Further investigation reveals that such negative associations are stronger in firms with a higher level of discretion in tax reporting and when the demand and monitoring for transparent reporting is higher. We also document corroborating evidence that smoothing through tax accruals increases the informativeness of GAAP ETRs for predicting future cash ETRs. Collectively, our results contribute to the financial reporting and tax literatures by providing evidence that smoothing activities pertaining to tax accruals are consistent with higher financial reporting quality

Spektroskopischer Nachweis eines Bis(amino)silylens

The photolysis of the silicon diazide 3a in benzene solution and in an Ar matrix is described. Both irradiations cause the elimination of 3 equivalents of N2. Loss of N2 from 3a in benzene leads to the formation of the analytically investigated product or products 4 of uncertain structure. However, the matrix photolysis of 3a results in a compound which is stable up to 77 K and has been identified as the bis(amino)silylene 2 d by comparison of its IR spectra with those of the homologous Sn and Ge compond

Business model digitalization, competition, and tax savings

We examine the effect of business model digitalization on competition and how corporate tax savings through digitalization may augment this relationship. Global policymakers express concern that digitalization-related tax savings unfairly benefit the competitive standing of rival firms over their competitors. Using textual analysis techniques to identify firms’ business models, we show that rivals’ adoption of a digital business model leads to negative economic effects on the performance of their non-digitalizing competitors. We estimate that a one standard deviation increase in the share of digitalized rivals in a market reduces a competitor’s market share by 4.6%. Suggesting significant tax savings from digitalizing, we also find that digitalizing rivals substantially reduce their effective tax rates, mostly by increased use of tax havens. However, when we test whether the detected competitive externalities vary depending on the share of digitalizing rivals with versus without substantial digitalization-related tax savings, we find the economic magnitudes of their effects are quantitatively similar. Therefore, contrary to policymakers’ concerns of digitalization-related tax savings unfairly shaping competition, our findings suggest that tax savings from digitalization is not a key driver of altering competition between digitalized and non-digitalized firms

Augmenter of Liver Regeneration (alr) Promotes Liver Outgrowth during Zebrafish Hepatogenesis

Augmenter of Liver Regeneration (ALR) is a sulfhydryl oxidase carrying out fundamental functions facilitating protein disulfide bond formation. In mammals, it also functions as a hepatotrophic growth factor that specifically stimulates hepatocyte proliferation and promotes liver regeneration after liver damage or partial hepatectomy. Whether ALR also plays a role during vertebrate hepatogenesis is unknown. In this work, we investigated the function of alr in liver organogenesis in zebrafish model. We showed that alr is expressed in liver throughout hepatogenesis. Knockdown of alr through morpholino antisense oligonucleotide (MO) leads to suppression of liver outgrowth while overexpression of alr promotes liver growth. The small-liver phenotype in alr morphants results from a reduction of hepatocyte proliferation without affecting apoptosis. When expressed in cultured cells, zebrafish Alr exists as dimer and is localized in mitochondria as well as cytosol but not in nucleus or secreted outside of the cell. Similar to mammalian ALR, zebrafish Alr is a flavin-linked sulfhydryl oxidase and mutation of the conserved cysteine in the CxxC motif abolishes its enzymatic activity. Interestingly, overexpression of either wild type Alr or enzyme-inactive AlrC131S mutant promoted liver growth and rescued the liver growth defect of alr morphants. Nevertheless, alrC131S is less efficacious in both functions. Meantime, high doses of alr MOs lead to widespread developmental defects and early embryonic death in an alr sequence-dependent manner. These results suggest that alr promotes zebrafish liver outgrowth using mechanisms that are dependent as well as independent of its sulfhydryl oxidase activity. This is the first demonstration of a developmental role of alr in vertebrate. It exemplifies that a low-level sulfhydryl oxidase activity of Alr is essential for embryonic development and cellular survival. The dose-dependent and partial suppression of alr expression through MO-mediated knockdown allows the identification of its late developmental role in vertebrate liver organogenesis

Spektroskopischer Nachweis eines Bis(amino)silylens

The photolysis of the silicon diazide 3a in benzene solution and in an Ar matrix is described. Both irradiations cause the elimination of 3 equivalents of N2. Loss of N2 from 3a in benzene leads to the formation of the analytically investigated product or products 4 of uncertain structure. However, the matrix photolysis of 3a results in a compound which is stable up to 77 K and has been identified as the bis(amino)silylene 2 d by comparison of its IR spectra with those of the homologous Sn and Ge compond