Fixing 404

Although debate persists as to whether the costs of Sarbanes-Oxley\u27s Section 404 regulations exceed their benefits, there is broad consensus that the rules have been inefficiently implemented. Substantive and procedural factors contribute to the rules\u27 inefficiency. From a substantive perspective, the terms material weakness and significant deficiency are central to the implementing regulations and are easily interpreted to legitimize audits of controls that have only a remote probability of causing an inconsequential effect on the issuer\u27s financial statements. As a quantitative matter the literature suggests that a control with a remote probability of causing an inconsequential effect has an expected value of only five one-hundredths of one percent of a firm\u27s net income. Procedurally, the Section 404 rules are implemented in an economic and political environment that generates a powerful tropism for inefficient hyper enforcement. Auditors have been broadly criticized for a rash of audit failures and restatements. They do not want to be further criticized for implementing Section 404 with insufficient vigor Auditors are also subject to significant uninsurable litigation risk. That provides an incentive to externalize risk by forcing clients to absorb greater precautionary costs that benefit auditors by reducing the probability of an audit failure. Auditors also make money selling Section 404 services to audit and nonaudit clients alike. These three forces combine to create powerful incentives for the audit industry, incentives that contribute to inefficient expenditures on Section 404 procedures much like the forces that drive inefficient expenditures on defensive medical procedures. To address these concerns, the Securities and Exchange Commission ( Commission or SEC ) and the Public Company Accounting Oversight Board ( PCAOB ) should aggressively redraft the rules implementing Section 404 to eliminate the need to examine controls that are unlikely to have a material effect. At the same time, the PCAOB should monitor audit firms\u27 Section 404 practices and discipline auditors who promote or engage in cost-inefficient procedures. We are not confident that these or any other reforms will be sufficient to remedy the problems already created by Section 404. The audit profession has incorporated inefficient Section 404 procedures into its integrated audit framework, and experience suggests that auditors are loathe to weaken processes already in place. While the Commission and the PCAOB should act aggressively to rationalize Section 404 costs, Section 404 as implemented under the current rules may have established an irreversible process that will continue to impose inefficient costs on publicly traded firms for years to come

Fixing 404

Although debate persists as to whether the costs of Sarbanes-Oxley\u27s Section 404 regulations exceed their benefits, there is broad consensus that the rules have been inefficiently implemented. Substantive and procedural factors contribute to the rules\u27 inefficiency. From a substantive perspective, the terms material weakness and significant deficiency are central to the implementing regulations and are easily interpreted to legitimize audits of controls that have only a remote probability of causing an inconsequential effect on the issuer\u27s financial statements. As a quantitative matter the literature suggests that a control with a remote probability of causing an inconsequential effect has an expected value of only five one-hundredths of one percent of a firm\u27s net income. Procedurally, the Section 404 rules are implemented in an economic and political environment that generates a powerful tropism for inefficient hyper enforcement. Auditors have been broadly criticized for a rash of audit failures and restatements. They do not want to be further criticized for implementing Section 404 with insufficient vigor Auditors are also subject to significant uninsurable litigation risk. That provides an incentive to externalize risk by forcing clients to absorb greater precautionary costs that benefit auditors by reducing the probability of an audit failure. Auditors also make money selling Section 404 services to audit and nonaudit clients alike. These three forces combine to create powerful incentives for the audit industry, incentives that contribute to inefficient expenditures on Section 404 procedures much like the forces that drive inefficient expenditures on defensive medical procedures. To address these concerns, the Securities and Exchange Commission ( Commission or SEC ) and the Public Company Accounting Oversight Board ( PCAOB ) should aggressively redraft the rules implementing Section 404 to eliminate the need to examine controls that are unlikely to have a material effect. At the same time, the PCAOB should monitor audit firms\u27 Section 404 practices and discipline auditors who promote or engage in cost-inefficient procedures. We are not confident that these or any other reforms will be sufficient to remedy the problems already created by Section 404. The audit profession has incorporated inefficient Section 404 procedures into its integrated audit framework, and experience suggests that auditors are loathe to weaken processes already in place. While the Commission and the PCAOB should act aggressively to rationalize Section 404 costs, Section 404 as implemented under the current rules may have established an irreversible process that will continue to impose inefficient costs on publicly traded firms for years to come

Phenotype MicroArray Profiling of Zymomonas mobilis ZM4

In this study, we developed a Phenotype MicroArray™ (PM) protocol to profile cellular phenotypes in Zymomonas mobilis, which included a standard set of nearly 2,000 assays for carbon, nitrogen, phosphorus and sulfur source utilization, nutrient stimulation, pH and osmotic stresses, and chemical sensitivities with 240 inhibitory chemicals. We observed two positive assays for C-source utilization (fructose and glucose) using the PM screen, which uses redox chemistry and cell respiration as a universal reporter to profile growth phenotypes in a high-throughput 96-well plate-based format. For nitrogen metabolism, the bacterium showed a positive test results for ammonia, aspartate, asparagine, glutamate, glutamine, and peptides. Z. mobilis appeared to use a diverse array of P-sources with two exceptions being pyrophosphate and tripolyphosphate. The assays suggested that Z. mobilis uses both inorganic and organic compounds as S-sources. No stimulation by nutrients was detected; however, there was evidence of partial inhibition by purines and pyrimidines, NAD, and deferoxamine. Z. mobilis was relatively resistant to acid pH, tolerating a pH down to about 4.0. It also tolerated phosphate, sulfate, and nitrate, but was rather sensitive to chloride and nitrite. Z. mobilis showed resistance to a large number of diverse chemicals that inhibit most bacteria. The information from PM analysis provides an overview of Z. mobilis physiology and a foundation for future comparisons of other wild-type and mutant Z. mobilis strains

Upper limits on the strength of periodic gravitational waves from PSR J1939+2134

The first science run of the LIGO and GEO gravitational wave detectors presented the opportunity to test methods of searching for gravitational waves from known pulsars. Here we present new direct upper limits on the strength of waves from the pulsar PSR J1939+2134 using two independent analysis methods, one in the frequency domain using frequentist statistics and one in the time domain using Bayesian inference. Both methods show that the strain amplitude at Earth from this pulsar is less than a few times $10^{-22}$.Comment: 7 pages, 1 figure, to appear in the Proceedings of the 5th Edoardo Amaldi Conference on Gravitational Waves, Tirrenia, Pisa, Italy, 6-11 July 200

Improving the sensitivity to gravitational-wave sources by modifying the input-output optics of advanced interferometers

We study frequency dependent (FD) input-output schemes for signal-recycling interferometers, the baseline design of Advanced LIGO and the current configuration of GEO 600. Complementary to a recent proposal by Harms et al. to use FD input squeezing and ordinary homodyne detection, we explore a scheme which uses ordinary squeezed vacuum, but FD readout. Both schemes, which are sub-optimal among all possible input-output schemes, provide a global noise suppression by the power squeeze factor, while being realizable by using detuned Fabry-Perot cavities as input/output filters. At high frequencies, the two schemes are shown to be equivalent, while at low frequencies our scheme gives better performance than that of Harms et al., and is nearly fully optimal. We then study the sensitivity improvement achievable by these schemes in Advanced LIGO era (with 30-m filter cavities and current estimates of filter-mirror losses and thermal noise), for neutron star binary inspirals, and for narrowband GW sources such as low-mass X-ray binaries and known radio pulsars. Optical losses are shown to be a major obstacle for the actual implementation of these techniques in Advanced LIGO. On time scales of third-generation interferometers, like EURO/LIGO-III (~2012), with kilometer-scale filter cavities, a signal-recycling interferometer with the FD readout scheme explored in this paper can have performances comparable to existing proposals. [abridged]Comment: Figs. 9 and 12 corrected; Appendix added for narrowband data analysi

STYLE AS EXEMPLIFICATIONAL ASPECT OF DISCOURSE

Goodmanova semiotika i teorija stila znatno utječu na suvremena promišljanja pojma stil i određivanja nadležnosti literarne stilistike, naročito u Francuskoj. Ključnim se u tome kontekstu pokazuje Goodmanov koncept egzemplifikacije kao specifične referencijalne funkcije. U ovome radu donosi se kritički pregled Goodmanovih teza i njegovih nastavljača, posebice G. Genettea.Goodman\u27s semiotics and the theory of style are highly influental in contemporary conteptualizations of style and in defining the scope of literary stylistics, particulary in France. The key concept in that context is exemplification – a specific referential function. This paper presents a critical summary of Nelson Goodman\u27s hypotheses as well as his successors\u27, namely Gérard Genette