Accuracy of direct genomic values in Holstein bulls and cows using subsets of SNP markers

Background: At the current price, the use of high-density single nucleotide polymorphisms (SNP) genotyping assays in genomic selection of dairy cattle is limited to applications involving elite sires and dams. The objective of this study was to evaluate the use of low-density assays to predict direct genomic value (DGV) on five milk production traits, an overall conformation trait, a survival index, and two profit index traits (APR, ASI). Methods. Dense SNP genotypes were available for 42,576 SNP for 2,114 Holstein bulls and 510 cows. A subset of 1,847 bulls born between 1955 and 2004 was used as a training set to fit models with various sets of pre-selected SNP. A group of 297 bulls born between 2001 and 2004 and all cows born between 1992 and 2004 were used to evaluate the accuracy of DGV prediction. Ridge regression (RR) and partial least squares regression (PLSR) were used to derive prediction equations and to rank SNP based on the absolute value of the regression coefficients. Four alternative strategies were applied to select subset of SNP, namely: subsets of the highest ranked SNP for each individual trait, or a single subset of evenly spaced SNP, where SNP were selected based on their rank for ASI, APR or minor allele frequency within intervals of approximately equal length. Results: RR and PLSR performed very similarly to predict DGV, with PLSR performing better for low-density assays and RR for higher-density SNP sets. When using all SNP, DGV predictions for production traits, which have a higher heritability, were more accurate (0.52-0.64) than for survival (0.19-0.20), which has a low heritability. The gain in accuracy using subsets that included the highest ranked SNP for each trait was marginal (5-6%) over a common set of evenly spaced SNP when at least 3,000 SNP were used. Subsets containing 3,000 SNP provided more than 90% of the accuracy that could be achieved with a high-density assay for cows, and 80% of the high-density assay for young bulls. Conclusions: Accurate genomic evaluation of the broader bull and cow population can be achieved with a single genotyping assays containing ∼ 3,000 to 5,000 evenly spaced SNP

‘Post-Sarbanes–Oxley changes in the composition of boards: Have they impacted spending for audit services?’

The issue of the importance of the independent auditor\u27s audit to the integrity of corporate financial statements has been a staple of the corporate governance and financial market functioning literature since the Securities Act of 1933 and the Securities Exchange Act of 1934. These acts required auditor attestation of corporate financial statements. Subsequent to the passage of the auditor attestation requirement, occasional financial reporting scandals erupted. None of these had the impact of the Enron/Worldcom scandals of 2001 and 2002. These scandals illustrated the ability of corporate management to game the corporation\u27s financial statements, despite - or perhaps with the tacit concurrence of - the boards of directors of affected firms. Accordingly, much of the 2002 legal response to corporate financial reporting scandals came in the form of new corporate governance requirements on all publicly held firms. The impact of these requirements, however, differed between firms. Some firms had introduced use of independent directors and fully independent committees before their being made compulsory in 2002. One instrument of control over corporate management that the board of directors possesses, in actuality or potentially, is control of the extent of the work of the independent auditors. The auditors work can result in the board learning of accounting-related corporate mis-and malfeasance. Accordingly, the extent of the auditor\u27s work is important and the obvious surrogate for this effort is the audit fee. This investigation examines the effect on spending by listed firms for audit services attributable to the Sarbanes-Oxley Act of 2002 and related stock exchange regulations. It uses the difference-in-differences methodology to overcome endogeneity concerns. The results reveal that firms that were compelled by law to change their boards increased their spending on financial statement-related audit services more than did firms that had pre-adopted the Sarbanes-Oxley corporate board composition requirements

Executive compensation, earnings management and shareholder litigation

Compensation, Stock options, Fraud, Shareholder lawsuits, J33, K22, M41,

Board independence and market reactions around news of stock option backdating

Board Independence, Option Backdating, G3, G34,

How long is a long-term-firm investment in the presence of governance mechanisms?

We examine the relationship between managerial myopia and three governance mechanisms: ownership concentration, short-term incentive plans and the market for corporate control. We first examine a number of measures for longterm investments in physical assets and show that the net depreciation rate of property, plant and equipment is a better predictor of a firm’s long-term investment horizon than alternative measures. We calculate ownership concentration using the Gini coefficient that measures the inequality in the distribution of a firm’s ownership. We also examine numerous measures to proxy for short-term incentive plans and the market for corporate control. Using detailed data on ownership and incentive plans, we then relate these governance variables to managerial myopia and show that concentrated ownership and the market for corporate control reduce managerial myopia whereas short-term incentive plans do not have a significant effect on managerial myopia. We also show that the market for corporate control is a more efficient governance mechanism than concentrated ownership. This implies that external governance mechanisms, such as takeover threats, successfully influence managers facing reputational concerns, which may have a substantial impact on firm value. In our robustness analyses, we apply a variety of techniques to control for omitted variable bias, measurement error and other sources of endogeneity that plague empirical studies on managerial myopia