Scaling the Costs of 404 Testing to Fit the Needs of Small Public Companies

In July of 2002, the Sarbanes-Oxley Act was passed by Congress, including section 404 which requires the auditors to test and opine on the company's internal controls. Since that time there has been much debate about whether the intended benefits of increased investor confidence and financial statement transparency trump the unexpectedly high compliance costs, especially for public companies with market-caps less than $75 million. Before these companies begin complying in the upcoming year, interest groups are calling for the requirements to be 'scaled' to better fit the needs of these companies. While auditors already are expected to scale their audit approach to each individual client, more must be done to significantly decrease the costs in order to reverse the trend of small companies foregoing listing on U.S. capital markets. Increased guidance from the PCAOB, SEC, and other related parties could help the small-cap companies and their auditors be aware of best practices. Also, exempting industries that already follow similar guidelines or are significantly injured by the compliance requirements could help. Lastly, the controversial proposal of rotational audits could be put in place if the affected parties cooperate to remove the undue burden on these small-cap companies. Without some form of significant action, the investors could soon lose the ability to buy small-cap companies in U.S. markets.

Enhanced Cold Tolerance in Transgenic Tobacco Expressing a Chloroplast Omega-3 Fatty Acid Desaturase Gene under the Control of a Cold-inducible Promoter

A new cold-inducible genetic construct was cloned using a chloroplast-specific omega-3-fatty acid desaturase gene (FAD7) under the control of a cold-inducible promoter (cor15a) from Arabidopsis thaliana. RT-PCR confirmed a marked increase in FAD7 expression, in young Nicotiana tabacum (cv. Havana) plants harboring cor15a-FAD7, after a short-term exposure to cold. When young, cold-induced tobacco seedlings were exposed to low-temperature (0.5, 2 or 3.5 degrees C) for up to 44 days, survival within independent cor15a-FAD7 transgenic lines (40.2-96%) was far superior to the wild type (6.7-10.2%). In addition, the major trienoic fatty acid species remained stable in cold-induced cor15a-FAD7 N. tabacum plants under prolonged cold storage while the levels of hexadecatrienoic acid (16:3) and octadecatrienoic acid (18:3) declined in wild type plants under the same conditions (79 and 20.7% respectively). Electron microscopy showed that chloroplast membrane ultrastructure in cor15a-FAD7 transgenic plants was unaffected by prolonged exposure to cold temperatures. In contrast, wild type plants experienced a loss of granal stacking and disorganization of the thylakoid membrane under the same conditions. Changes in membrane integrity coincided with a precipitous decline in leaf chlorophyll concentration and low survival rates in wild type plants. Cold-induced double transgenic N. alata (cv. Domino Mix) plants, harboring both the cor15a-FAD7 cold-tolerance gene and a cor15a-IPT dark-tolerance gene, exhibited dramatically higher survival rates (89-90%) than wild type plants (2%) under prolonged cold storage under dark conditions (2 degrees C for 50 days).