Earnings management in response to the introduction of the Australian gold tax

Earnings from gold mining in Australia remained tax-exempt for almost seven decades until January 1, 1991. In the early 1980s, rapid economic prosperity induced by escalated gold prices brought the Australian gold-mining industry under intense political scrutiny. Using a variant of the modified Jones model, this paper provides evidence of significant downward earnings management by Australian gold-mining firms, which is consistent with their attempts to mitigate political costs during the period from June 1985 to May 1988. In contrast, test of earnings management over a similar period in a control sample of Canadian gold-mining firms produced insignificant results. Further, empirical results are robust to several sensitivity tests performed. During the period from June 1988 to December 1990, the Australian firms were found to have engaged in economic earnings management. This is consistent with the sample firms' incentive of maximizing economic earnings immediately prior to the introduction of income tax on gold mining. The findings of this study help to understand the impact of earnings management on the efficient resource allocation in an economy. They also contribute toward understanding the linkage between regulation of accounting for special purposes and general-purpose financial. reporting.

Patterns of neuronal activation in the rat brain and spinal cord in response to increasing durations of restraint stress

By most accounts the psychological stressor restraint produces a distinct pattern of neuronal activation in the brain. However, some evidence is incongruous with this pattern, leading us to propose that the restraint- induced pattern in the central nervous system might depend on the duration of restraint used. We therefore determined the pattern of neuronal activation ( as indicated by the presence of Fos protein) seen in the paraventricular nucleus (PVN), bed nucleus of the stria terminalis, amygdala, locus coeruleus, nucleus tractus solitarius (NTS), ventrolateral medulla (VLM) and thoracic spinal cord of the rat in response to 0, 15, 30 or 60 min periods of restraint. We found that although a number of cell groups displayed a linear increase in activity with increasing durations of restraint ( e. g. hypothalamic corticotrophin-releasing factor (CRF) cells, medial amygdala neurons and sympathetic preganglionic neurons of the thoracic spinal cord), a number of cell groups did not. For example, in the central amygdala restraint produced both a decrease in CRF cell activity and an increase in non-CRF cell activity. In the locus coeruleus, noradrenergic neurons did not display Fos in response to 15 min of restraint, but were significantly activated by 30 or 60 min restraint. After 30 or 60 min restraint a greater degree of activation of more rostral A1 noradrenergic neurons was observed compared with the pattern of A1 noradrenergic neurons in response to 15 min restraint. The results of this study demonstrate that restraint stress duration determines the amount and the pattern of neuronal activation seen in response to this psychological stressor.

Computational analysis of base composition pattern and promoter elements in the putative promoter regions in relation to expression profiles of 682 human genes on chromosome 22

The base composition pattern (BCP) in the putative promoter region (PPRs) up to 5 Kb lengths of 682 human genes on Chromosome 22 (Chr22) was examined. Two-dimensional (2D) and three-dimensional (3D) functions were designed to delineate the DNA base composition, with four major patterns identified. It is found that 17.6% genes include TATA box, 28.0% GC box, 18.9% CAAT box and 38.4% CpG islands, and approximately 10% genes have one of four putative initiator (Inr) motifs. The occurrence of the promoter elements is tightly associated with the base composition features in the promoter regions, and the associations of the base composition features with occurrence of the promoter elements in the promoter regions mediate tissue-wide expression of the genes in human. The occurrence of two or more promoter elements in the promoter regions is required for the medium- and wide-range expression profiles of the human genes on Chr22. Thus, the reported data shed light on the characteristics of the PPRs of the human genes on Chr22, which may improve our understanding of regulatory roles of the PPRs with occurrence of the promoter elements in gene expression.

Mimicking the action of GroEL in molecular dynamics simulations: Application to the refinement of protein structures

Bacterial chaperonin, GroEL, together with its co-chaperonin, GroES, facilitates the folding of a variety of polypeptides. Experiments suggest that GroEL stimulates protein folding by multiple cycles of binding and release. Misfolded proteins first bind to an exposed hydrophobic surface on GroEL. GroES then encapsulates the substrate and triggers its release into the central cavity of the GroEL/ES complex for folding. In this work, we investigate the possibility to facilitate protein folding in molecular dynamics simulations by mimicking the effects of GroEL/ES namely, repeated binding and release, together with spatial confinement. During the binding stage, the (metastable) partially folded proteins are allowed to attach spontaneously to a hydrophobic surface within the simulation box. This destabilizes the structures, which are then transferred into a spatially confined cavity for folding. The approach has been tested by attempting to refine protein structural models generated using the ROSETTA procedure for ab initio structure prediction. Dramatic improvements in regard to the deviation of protein models from the corresponding experimental structures were observed. The results suggest that the primary effects of the GroEL/ES system can be mimicked in a simple coarse-grained manner and be used to facilitate protein folding in molecular dynamics simulations. Furthermore, the results Sur port the assumption that the spatial confinement in GroEL/ES assists the folding of encapsulated proteins.

Use of a probabilistic neural network to reduce costs of selecting construction rock

Rocks used as construction aggregate in temperate climates deteriorate to differing degrees because of repeated freezing and thawing. The magnitude of the deterioration depends on the rock's properties. Aggregate, including crushed carbonate rock, is required to have minimum geotechnical qualities before it can be used in asphalt and concrete. In order to reduce chances of premature and expensive repairs, extensive freeze-thaw tests are conducted on potential construction rocks. These tests typically involve 300 freeze-thaw cycles and can take four to five months to complete. Less time consuming tests that (1) predict durability as well as the extended freeze-thaw test or that (2) reduce the number of rocks subject to the extended test, could save considerable amounts of money. Here we use a probabilistic neural network to try and predict durability as determined by the freeze-thaw test using four rock properties measured on 843 limestone samples from the Kansas Department of Transportation. Modified freeze-thaw tests and less time consuming specific gravity (dry), specific gravity (saturated), and modified absorption tests were conducted on each sample. Durability factors of 95 or more as determined from the extensive freeze-thaw tests are viewed as acceptable—rocks with values below 95 are rejected. If only the modified freeze-thaw test is used to predict which rocks are acceptable, about 45% are misclassified. When 421 randomly selected samples and all four standardized and scaled variables were used to train aprobabilistic neural network, the rate of misclassification of 422 independent validation samples dropped to 28%. The network was trained so that each class (group) and each variable had its own coefficient (sigma). In an attempt to reduce errors further, an additional class was added to the training data to predict durability values greater than 84 and less than 98, resulting in only 11% of the samples misclassified. About 43% of the test data was classed by the neural net into the middle group—these rocks should be subject to full freeze-thaw tests. Thus, use of the probabilistic neural network would meanthat the extended test would only need be applied to 43% of the samples, and 11% of the rocks classed as acceptable would fail early.