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.

Mortgage Lending in Chicago and Los Angeles: A Paired Testing Study of the Pre-Application Process

This paper analyzes data from a recently completed study of discrimination against African-American and Hispanic homebuyers when they visit mortgage lending institutions in two major metropolitan markets to make pre-application inquiries. It represents the first application of paired testing to rigorously measure discrimination in the mortgage lending process. The paired tests isolated significant levels of differential treatment on the basis of race and ethnicity in Chicago with African Americans and Hispanics receiving less information and assistance than comparable whites. Adverse treatment of African-Americans and Hispanics is also observed in Los Angeles for specific treatments, but the overall pattern of treatment observed did not differ statistically from equal treatment. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than small lenders and that lenders with substantial numbers of applications from African-Americans treat African Americans more favorably than lenders with predominantly white application pools.

A Study of the Molecular Basis of Microvariants at the FGA and D21S11 Loci Used in Forensic DNA Testing

Microvariant alleles, defined as alleles that contain an incomplete repeat unit, often complicate the process of DNA analysis. Understanding the molecular basis of microvariants would help to catalogue results and improve upon the analytical process involved in DNA testing. The first step is to determine the sequence/cause of a microvariant. This was done by sequencing samples that were determined to have a microvariant at the FGA or D21S11 loci. The results indicate that a .2 microvariant at the D21S11 locus is caused by a -TA- dinucleotide partial repeat before the last full TCTA repeat. The .2 microvariant at the FGA locus is caused by a -TT- dinucleotide partial repeat after the fifth full repeat and before the variable CTTT repeat motif. There are several possibilities for the reason the .2 microvariants are all the same at a locus, each of which carry implications on the forensic community. The first possibility is that the microvariants are identical by descent, which means that the microvariant is an old allele that has been passed down through the generations. The second possibility is that the microvariants are identical by state, which would mean that there is a mechanism selecting for these microvariants. Future research studying the flanking regions of these microvariants is proposed to determine which of these possibilities is the actual cause and to learn more about the molecular basis of microvariants.

Behavioral Profile of the Novel Cannabinoid Agonist AM4054

Although cannabinoid drugs have been used for thousands of years both recreationally and therapeutically, little has been known about their mechanisms of action until recently. Since the discovery of the endogenous cannabinoid CB1 receptor in 1988, the behavioral profile of cannabinoid receptor ligands has been much more thoroughly defined. Cannabinoid CB1 agonists have been shown to produce a variety of behavioral effects including suppression of locomotion, catalepsy, hypothermia, and analgesia. Research has also demonstrated that these behavioral effects can be inhibited by CB1 receptor antagonists including SR 141716 and AM 251. Although behavioral indicators of anxiety including thigmotaxis have been observed in several different paradigms, there is inconclusive and often times contradictory evidence to define the role of anxiety in CB1 receptor activation. The present study addressed the behavioral profile of AM 4054, a novel full agonist at the CB1 receptor, as well as the ability of the CB1 antagonist AM 251 to reverse these effects. To further identify and expand research on the suppression of locomotion and induction of thigmotaxis with the administration of a CB1 agonist, experiment 1 was conducted in the open field. In this experiment, each rat (n=40) was randomly assigned one of the five treatments: vehicle, 0.16, 0.32, 0.64, or 1.25 mg/kg AM 4054. After a 30 minute pre-treatment, each subject was tested in the open field for 18 minutes. Results indicated that AM 4054 produced a dose-related suppression of locomotion as well as the subtle presence of thigmotaxis in two out of four doses. In experiment 2, subjects (n=40) received either vehicle or 2.0 or 4.0 mg/kg AM 251 60 minutes prior to testing. After 30 minutes, the subjects were given either a 0.3 mg/kg dose of AM 4054 or vehicle. After a total pretreatment duration of 60 minutes, the animals were tested on a battery of tasks including an 18 minute session in locomotor boxes. Experiment 2 was a continuation of a previous study conducted in the same lab, which confirmed the effects of AM 4054 on this tetrad of tasks as being consistent with other cannabinoid agonists. In this experiment the effects of AM 4054 were reversed by the administration of the CB1 antagonist AM 251. Past studies have shown that AM 4054 is a highly potent drug with behavioral actions similar to other cannabinoid CB1 agonists. Furthermore, AM 4054 can be a useful drug in future studies, and has potential therapeutic value for the treatment of various conditions.