National Geographic - Cooking Gave Humans Edge Over Apes?
A poorly explored and written article discusses the basic premise that cooking food is a near-universal practice in humans and allowed for evolutionary changes that gave humans the ability to spread across the globe. Cooking breaks down hard starches and dense tubers, making eating much easier to do-- and allowing much smaller jaws and teeth in humans versus their nearest primate ancestors. The foremost advocate of this position is Richard Wrangham, who has been exploring this thesis for years. One interesting fact in the latter part of the article talked about equipping the few remaining hunter-gather societies with pedometers and discovering they walk an average of 8 miles a day; of course their diet and lifestyle keeps them relatively free of developed-world diseases like diabetes, heart disease, etc.
Friday, February 27, 2009
Thursday, February 26, 2009
Committed spouses look at attractive people less
Scientific American - People in Love are Blind to Pretty Faces
Usually people are distracted by attractive faces and perform poorly on reaction tests administered immediately after shown such faces. However, people in long-term relationships or marriages (or who were otherwise monogamous) who were primed with the thoughts of their beloved did not perform poorly on the same reaction tests versus the control group. Interestingly, people averted their eyes from an attractive face more quickly than when they saw an average-looking face.
Usually people are distracted by attractive faces and perform poorly on reaction tests administered immediately after shown such faces. However, people in long-term relationships or marriages (or who were otherwise monogamous) who were primed with the thoughts of their beloved did not perform poorly on the same reaction tests versus the control group. Interestingly, people averted their eyes from an attractive face more quickly than when they saw an average-looking face.
Wednesday, February 25, 2009
Teenagers use the internet for social networking, homework, and pornography
Daily Mail - Teens spend average of 87 hours a year looking at porn online
In a study conducted by an online safety and blocking company in England of 1000 teenagers, the average teenager was online for a whopping 31 hours a week. It was found that their use of the internet can be averaged weekly in the following manner:
3 hr 10 min - homework and study
2 hr 2 min - video clips
1 hr 55 min - virtual world interactive sites
1 hr 40 min - music listening or downloading
1 hr 40 min - porn
1 hr 35 min - dieting and weight loss
1 hr 30 min - auctions
1 hr 22 min - health sites, puberty
1 hr 15 min - dating websites
1 hr 8 min - cosmetic surgery
The article also talks about teens spending 'as much as' 9 hours a week chatting online and social networking, but doesn't give the averages. Other news sites quote 3 1/2 hours chatting. The survey was conducted on a voluntary basis by a private firm, CyberSentinel, whose business is to help parents block content from the internet.
In a study conducted by an online safety and blocking company in England of 1000 teenagers, the average teenager was online for a whopping 31 hours a week. It was found that their use of the internet can be averaged weekly in the following manner:
3 hr 10 min - homework and study
2 hr 2 min - video clips
1 hr 55 min - virtual world interactive sites
1 hr 40 min - music listening or downloading
1 hr 40 min - porn
1 hr 35 min - dieting and weight loss
1 hr 30 min - auctions
1 hr 22 min - health sites, puberty
1 hr 15 min - dating websites
1 hr 8 min - cosmetic surgery
The article also talks about teens spending 'as much as' 9 hours a week chatting online and social networking, but doesn't give the averages. Other news sites quote 3 1/2 hours chatting. The survey was conducted on a voluntary basis by a private firm, CyberSentinel, whose business is to help parents block content from the internet.
Tuesday, February 24, 2009
Red augments attention to detail, blue creativity
Wired.com - Seeing Red: Tweak Your Brain With Colors
In another study that adds to the lore of the influence that color can have on people, red is seen as increasing performance detail-oriented work. Though it has been seen to reduce perforamance on analytical problem-solving and IQ tests, the vigilance it primes is overall better for giving people an edge for attention, especially to detail. Those primed with the color blue tended to do better than the control on creative tasks. The theory there is that blue is relaxing to people, allowing them to be more creative. Also interesting is that the opposite colors didn't impede performance on tasks: e.g. blue didn't reduce attention/focus-on-detail over the control groups.
Monday, February 23, 2009
In the fight for the mantle of 'conservatism', the ideologues won and then destroyed it
The New Republic - Conservatism Is Dead
A long article that is written from a historical perspective displaying two conflicting strains of thought in 'conservatism'; on one side an ideological movement of anti-big-government and on the other, an earlier side that focuses on the conservation of civil society and traditions. Tanenhaus identifies the father of conservatism as Edmund Burke, a writer who sought not to return power to monarchies but to instead mix the new liberating movements (revolution) into what was good about the existing civil society-- instead of going with ideologies in favor of scrapping the entire previous order. Tanenhaus traces this thinking to Whittaker Chambers, a thinker who saw the inevitable acceptance of big-government even among staunch social reactionaries and imparted this vision to William Buckley Jr. Against this stance were the ideological conservatives, like Russell Kirk and Willmoore Kendall, who in the 1950s argued against big government as extending statist reach. These debates took place through the 1960s and into the 70s, until Nixon and Watergate, where the movement ideologues became strident and blamed Nixon's downfall on large liberal government bureaucracy and the main-stream media. This ideology took 'liberal elites' as the ideological enemy and sought to make a new conservative movement that was pure and confrontational rather than compromising. This gave way to Reagan and his true predecessor, GW Bush, who crashed this ideological position in his two-terms and now leaves the movement in the wilderness.
A long article that is written from a historical perspective displaying two conflicting strains of thought in 'conservatism'; on one side an ideological movement of anti-big-government and on the other, an earlier side that focuses on the conservation of civil society and traditions. Tanenhaus identifies the father of conservatism as Edmund Burke, a writer who sought not to return power to monarchies but to instead mix the new liberating movements (revolution) into what was good about the existing civil society-- instead of going with ideologies in favor of scrapping the entire previous order. Tanenhaus traces this thinking to Whittaker Chambers, a thinker who saw the inevitable acceptance of big-government even among staunch social reactionaries and imparted this vision to William Buckley Jr. Against this stance were the ideological conservatives, like Russell Kirk and Willmoore Kendall, who in the 1950s argued against big government as extending statist reach. These debates took place through the 1960s and into the 70s, until Nixon and Watergate, where the movement ideologues became strident and blamed Nixon's downfall on large liberal government bureaucracy and the main-stream media. This ideology took 'liberal elites' as the ideological enemy and sought to make a new conservative movement that was pure and confrontational rather than compromising. This gave way to Reagan and his true predecessor, GW Bush, who crashed this ideological position in his two-terms and now leaves the movement in the wilderness.
Friday, February 20, 2009
Boeing develops laser to shoot down planes from ground
Telegraph.co.uk - US military develops anti-aircraft laser
Boeing, contracted by the US government, has successfully tested a laser weapon that downs unmanned aerial vehicles (UAVs); UAVs are typically difficult for conventional weapons to target, being small and made from plastic rather than metal. It shoots a laser beam from a humvee on the ground. As UAVs become more prevalent because of their surveillance and tactical advantages, this weapon will become more useful.
Thursday, February 19, 2009
Evolution of warm-blooded animals might have to do with herbivores rather than carnivores
NewScientist - What's the point of being warm-blooded?
This relatively detailed article discusses the differences between warm-blooded creatures (endotherms) and cold-blooded ones (ectotherms), as well as the two competing theories as to why endotherms have evolved at all. Ectotherms are very efficient-- they don't have to be constantly eating-- they can effectively shut down some or all of their bodies to conserve energy that endotherms waste on a constant basis. (This distinction isn't hard and fast.) The first theory that was developed about 30 years ago observed that being endothermic enables higher stamina-- the ability to sustain longer physical exertion in a hunt or fight. Because of the selective advantage granted by this ability, endotherms evolved. The problem with this is that the endothermic heat-generating organs are largely those with more mitochondria (the brain, liver, and other visceral organs that are always functioning) not the cardiovascular system and muscles that can supply stamina. The alternate model being developed currently is that herbivores need many nutrients to build proteins and DNA (for more cells) but among them they need both carbon and nitrogen. The difficulty for them is that the amounts of nitrogen in plants is a fraction of the amount of carbon. Thus to get enough nitrogen you need to eat a lot more carbon than your body can reasonably use efficiently (if you're ectothermic). The evolutionary solution? Increase mitochondrial production (by switching on perhaps just one gene) and burn the carbon off with heat. This new theory posits that the Cretaceous period (140m years ago), which began to see flowing plants with a higher nitrogen content, created an opportunity to evolve this trait.
This relatively detailed article discusses the differences between warm-blooded creatures (endotherms) and cold-blooded ones (ectotherms), as well as the two competing theories as to why endotherms have evolved at all. Ectotherms are very efficient-- they don't have to be constantly eating-- they can effectively shut down some or all of their bodies to conserve energy that endotherms waste on a constant basis. (This distinction isn't hard and fast.) The first theory that was developed about 30 years ago observed that being endothermic enables higher stamina-- the ability to sustain longer physical exertion in a hunt or fight. Because of the selective advantage granted by this ability, endotherms evolved. The problem with this is that the endothermic heat-generating organs are largely those with more mitochondria (the brain, liver, and other visceral organs that are always functioning) not the cardiovascular system and muscles that can supply stamina. The alternate model being developed currently is that herbivores need many nutrients to build proteins and DNA (for more cells) but among them they need both carbon and nitrogen. The difficulty for them is that the amounts of nitrogen in plants is a fraction of the amount of carbon. Thus to get enough nitrogen you need to eat a lot more carbon than your body can reasonably use efficiently (if you're ectothermic). The evolutionary solution? Increase mitochondrial production (by switching on perhaps just one gene) and burn the carbon off with heat. This new theory posits that the Cretaceous period (140m years ago), which began to see flowing plants with a higher nitrogen content, created an opportunity to evolve this trait.
Wednesday, February 18, 2009
US Intelligence doesn't believe Iran has a nuclear weapon in development
Press TV - US intel confirms Iran not developing nukes
The National Intelligence Estimate in 2007 stated that Iran was not pursuing a nuclear weapons program. (An NIE is the most comprehensive intelligence pronouncement the US has.) Intelligence officials said recently that this estimate hasn't changed, in agreement with UN inspectors. At most, Iran is developing a nuclear power network that keeps the option of nuclear weapons open, but there isn't evidence it has enough fissile material for a weapon until 2013.
The National Intelligence Estimate in 2007 stated that Iran was not pursuing a nuclear weapons program. (An NIE is the most comprehensive intelligence pronouncement the US has.) Intelligence officials said recently that this estimate hasn't changed, in agreement with UN inspectors. At most, Iran is developing a nuclear power network that keeps the option of nuclear weapons open, but there isn't evidence it has enough fissile material for a weapon until 2013.
Tuesday, February 17, 2009
Video game makers aren't victims of the recession; they have a bad operating model
Slate.com - What's killing the video-game business?
Video game makers like Electronic Arts and Blizzard have reported large losses recently-- considered a sign of the times-- except that games are selling better in 2008 than 2007, and for the first time even better than DVDs. Sales are high, but the costs of making the games are even higher. The cost to develop high-tech games have ballooned into $15, $20, even $40-million enterprises, needing sales of nearly 2 million units to break even. Some games have done so (like GTA IV, Halo, Gears of War 2) but this model is probably a poor one. Some game companies have thought about pursuing a 'Hollywood' model where they make a few blockbusters and then use the profits from them to fund other titles. Van Zelfden argues that this model doesn't translate well to software makers since they retain large staff that they need to pay every month; contrast this with Holllywood that uses sub-contractors for just one project each time. Instead, what is suggested is making a ton of mini-hits, smaller games with less technical sophistication that are constantly being released.
Video game makers like Electronic Arts and Blizzard have reported large losses recently-- considered a sign of the times-- except that games are selling better in 2008 than 2007, and for the first time even better than DVDs. Sales are high, but the costs of making the games are even higher. The cost to develop high-tech games have ballooned into $15, $20, even $40-million enterprises, needing sales of nearly 2 million units to break even. Some games have done so (like GTA IV, Halo, Gears of War 2) but this model is probably a poor one. Some game companies have thought about pursuing a 'Hollywood' model where they make a few blockbusters and then use the profits from them to fund other titles. Van Zelfden argues that this model doesn't translate well to software makers since they retain large staff that they need to pay every month; contrast this with Holllywood that uses sub-contractors for just one project each time. Instead, what is suggested is making a ton of mini-hits, smaller games with less technical sophistication that are constantly being released.
Monday, February 16, 2009
Games of chance hijack a level of gratification used in skill improvement
Discover Magazine - Slot Machine Near Misses Are Perfectly Tuned to Stoke the Addiction
Using fMRI on people who have no known history of problem gambling, researchers found that the 'reward' sections of the brain light up when slot machines or chance games have 'near misses'. On a game of skill, near misses may signal improvement and thus should contain a level of reward; yet in chance games, near misses are the same as any miss-- chance games have 'hijacked' the reward system for increasing skill. Slot machine makers capitalize on this phenomenon to make near misses roughly 30% of the time, a percentage believed to be optimal.
Using fMRI on people who have no known history of problem gambling, researchers found that the 'reward' sections of the brain light up when slot machines or chance games have 'near misses'. On a game of skill, near misses may signal improvement and thus should contain a level of reward; yet in chance games, near misses are the same as any miss-- chance games have 'hijacked' the reward system for increasing skill. Slot machine makers capitalize on this phenomenon to make near misses roughly 30% of the time, a percentage believed to be optimal.
Friday, February 13, 2009
Humanities PhDs have low chances of success
Chronicle of Higher Education - Graduate School in the Humanities: Just Don't Go
Though low on revealing hard data, the article provides a sketch of the dynamic of PhD graduates in the humanities looking for 'real' positions-- tenure track professorships. A mix of encouraging professors and accepting humanities programs functions to blind impressionable people into believing they will find good work for themselves upon graduation when the majority won't. Though the Bowen and Sosa report predict massive baby-boomer retirements (that haven't happened yet), the current trend is to replace those positions with adjunct teachers with no benefits, much less pay, and no guaranteed future with the school. Schools are already reducing job searches in this recession, and Benton (Pannapacker) believes they will not restore their tenure-track position openings once it is over. All told, it is an ill-advised road if you want some assurance that you'll earn a decent living comparable to the private sector for the same amount of time and money spent.
Though low on revealing hard data, the article provides a sketch of the dynamic of PhD graduates in the humanities looking for 'real' positions-- tenure track professorships. A mix of encouraging professors and accepting humanities programs functions to blind impressionable people into believing they will find good work for themselves upon graduation when the majority won't. Though the Bowen and Sosa report predict massive baby-boomer retirements (that haven't happened yet), the current trend is to replace those positions with adjunct teachers with no benefits, much less pay, and no guaranteed future with the school. Schools are already reducing job searches in this recession, and Benton (Pannapacker) believes they will not restore their tenure-track position openings once it is over. All told, it is an ill-advised road if you want some assurance that you'll earn a decent living comparable to the private sector for the same amount of time and money spent.
Thursday, February 12, 2009
Benevolent globalism? (move your employees to a lower-standard-of-living country)
InformationWeek - IBM Offers To Move Laid Off Workers To India
IBM has laid off roughly 4,000 US workers and has made an offer called 'Project Match' whereby employees IBM would otherwise want to keep (but has since laid off) can move to Brazil, China, India, Mexico, Czech Republic, Russia, Nigeria, United Arab Emirates etc. The employees would receive moving and visa assistance but be paid according to the 'prevailing norms' of the country they relocate to-- substantially less.
IBM has laid off roughly 4,000 US workers and has made an offer called 'Project Match' whereby employees IBM would otherwise want to keep (but has since laid off) can move to Brazil, China, India, Mexico, Czech Republic, Russia, Nigeria, United Arab Emirates etc. The employees would receive moving and visa assistance but be paid according to the 'prevailing norms' of the country they relocate to-- substantially less.
Wednesday, February 11, 2009
Fresh water is a resource that may also grow scarce
The Times - Ecologists warn the planet is running short of water
Humans currently use about half the renewable and accessible fresh water. While most of it is returned to the ecosystem, the water used in industry and agriculture can be significantly degraded enough so that it may take a long time to recharge or become usable in a less accessible location. Studies done suggest that water-resource management has played a role in many of the conflicts and wars experienced over the past 500 years. Also of note are some calculations on how many liters of water are used in producing foods and household items, e.g. to produce a typical hamburger requires about 2,400 liters of water.
Humans currently use about half the renewable and accessible fresh water. While most of it is returned to the ecosystem, the water used in industry and agriculture can be significantly degraded enough so that it may take a long time to recharge or become usable in a less accessible location. Studies done suggest that water-resource management has played a role in many of the conflicts and wars experienced over the past 500 years. Also of note are some calculations on how many liters of water are used in producing foods and household items, e.g. to produce a typical hamburger requires about 2,400 liters of water.
Tuesday, February 10, 2009
Britons have stronger prejudice against homosexuals than ethnicities
The British Psychological Society - Prejudice study finds gay is the new black
Because of the strong public social pressures against displaying prejudice in most western countries, researchers have developed 'implicit association/attitude' tests administered by a computer. The technique tires to uncover biases that people may be unaware they have. The tests in a broad range of Britons showed that 7% have strong anti-gay bias and 35% have 'some' anti-gay bias. The next question is how these 'mid-range' biases would come out; researchers suggested that they may surface during stressed, threatened, traumatic or emotional times.
Because of the strong public social pressures against displaying prejudice in most western countries, researchers have developed 'implicit association/attitude' tests administered by a computer. The technique tires to uncover biases that people may be unaware they have. The tests in a broad range of Britons showed that 7% have strong anti-gay bias and 35% have 'some' anti-gay bias. The next question is how these 'mid-range' biases would come out; researchers suggested that they may surface during stressed, threatened, traumatic or emotional times.
Monday, February 9, 2009
Paper byproduct can be made into natural, recycleable plastic alternative
Deutsche Welle World - Liquid Wood is Plastic of Tomorrow, Say Scientists
Lignin is a byproduct of making paper from wood, but it apparently gets infused with sulfurous chemicals in the process of separating it. For a while now it has been possible to mix it with other natural materials like flax, hemp and melt it so that it can be used in injection molds to make finished products that had been made of plastic. The material has been used in industrial applications but not personal products because the high sulfur content made it unsafe. The breakthrough came in reducing the sulfur content by 90%, making it 'safer' [does that make it 'safe'?] and allowing it to possibly compete with plastic in toys, household & personal items. Scientists also believe the material is recyclable.
Friday, February 6, 2009
Spirituality and meaning enhance kids' lives, not necessarily religion
LiveScience - Spirituality, Not Religion, Makes Kids Happy
In two separate studies, kids in late childhood, early teenagers, and teenagers with a chronic illness all had an association between greater happiness and 'spirituality', which was vaguely defined. 'Spirituality' is defined in one study as 'having meaning and value' in one's life and having 'quality and depth' in interpersonal relationships. [Whether this is spirituality or just good living is a tough question.] The surprising aspect of the study was that religious practice was not associated with greater happiness, though religion might be associated with being well-adjusted or well-behaved kids. In a second study done on teens with Inflammatory Bowel Disease, the association between 'spirituality' (here considered a sense of meaning/purpose in life or a connection to the divine) and happiness was greater than among healthy peers, perhaps suggesting that it plays a role in coping.
In two separate studies, kids in late childhood, early teenagers, and teenagers with a chronic illness all had an association between greater happiness and 'spirituality', which was vaguely defined. 'Spirituality' is defined in one study as 'having meaning and value' in one's life and having 'quality and depth' in interpersonal relationships. [Whether this is spirituality or just good living is a tough question.] The surprising aspect of the study was that religious practice was not associated with greater happiness, though religion might be associated with being well-adjusted or well-behaved kids. In a second study done on teens with Inflammatory Bowel Disease, the association between 'spirituality' (here considered a sense of meaning/purpose in life or a connection to the divine) and happiness was greater than among healthy peers, perhaps suggesting that it plays a role in coping.
Labels:
happiness,
health,
parenting,
psychology,
religion
Thursday, February 5, 2009
Deep brain stimulation reaches sexual pleasure areas
BrainBlogger.com - Deep Brain Stimulation for Pleasure
Deep brain stimulation involves surgically implanting electrodes into the brain and then electrifying them using a pacemaker, effectively stimulating the brain in that location. This technique has had some success treating Parkinson's, Tourette's, phantom limbs, and 'refractory major depression'. Here, Oxford scientists are reported to have collected data on the areas of the brain associated with sexual and food pleasure-- behind the eyes-- and believe that an implant can be developed (and has already been tried, although in very limited cases) that will reduce 'sexual dysfunction' in women.
Deep brain stimulation involves surgically implanting electrodes into the brain and then electrifying them using a pacemaker, effectively stimulating the brain in that location. This technique has had some success treating Parkinson's, Tourette's, phantom limbs, and 'refractory major depression'. Here, Oxford scientists are reported to have collected data on the areas of the brain associated with sexual and food pleasure-- behind the eyes-- and believe that an implant can be developed (and has already been tried, although in very limited cases) that will reduce 'sexual dysfunction' in women.
Wednesday, February 4, 2009
There's mercury in high-fructose corn syrup too
Reuters - Studies find mercury in much US corn syrup
One study took 20 samples of straight high-fructose corn syrup (HFCS) and tested for mercury, finding detectable levels in 9. Another study took food off the shelves at the supermarket and tested 55 different samples where HFCS was the 1st or 2nd ingredient on the label. About 1/3 had detectable mercury. The theory is that HFCS gets contaminated when it is processed at the industrial level. Food processing companies and corn growers contest the methodology of the study.
One study took 20 samples of straight high-fructose corn syrup (HFCS) and tested for mercury, finding detectable levels in 9. Another study took food off the shelves at the supermarket and tested 55 different samples where HFCS was the 1st or 2nd ingredient on the label. About 1/3 had detectable mercury. The theory is that HFCS gets contaminated when it is processed at the industrial level. Food processing companies and corn growers contest the methodology of the study.
Tuesday, February 3, 2009
Private equity firms' leveraged buyout deals are looking like huge losses
Barron's - Ka-Boom!
A Leveraged Buy-Out (LBO) is a deal where a financial institution (private equity firm) buys a company by issuing bonds against the company it's about to buy. The cash flow from the acquired company pays the interest on the bonds while the private equity firm manages it, then sells it off in an 'exit strategy'. This is supposedly a 10-year process-- raising the capital to 'leverage', buying the company, then selling it and giving money back to the original investors, presumably at a large profit. Of course the private equity firm keeps a healthy sum (20%) plus 1.5% of all the pledged (not necessarily originally invested or market value) money. The problem now is that the debt payments continue as company revenues are shrinking; it looks as though the total debt eclipses the entire value of a company, making equity-ownership (that which private equity firms created so much debt to purchase) worth nothing. Not only are many private equity firms not admitting this by refusing to use similar accounting practices that public companies use, but the effects of these problems might not be felt until much later down the line. One of the current problems with the structure of a company that's been 'taken private' is the huge debt burden it now has; its competitive ability is dramatically reduced: the article mentions a few case studies, notably Linens 'n Things (private equity owned with an LBO, now out of business) vs. Bed, Bath, and Beyond (publicly traded).
A Leveraged Buy-Out (LBO) is a deal where a financial institution (private equity firm) buys a company by issuing bonds against the company it's about to buy. The cash flow from the acquired company pays the interest on the bonds while the private equity firm manages it, then sells it off in an 'exit strategy'. This is supposedly a 10-year process-- raising the capital to 'leverage', buying the company, then selling it and giving money back to the original investors, presumably at a large profit. Of course the private equity firm keeps a healthy sum (20%) plus 1.5% of all the pledged (not necessarily originally invested or market value) money. The problem now is that the debt payments continue as company revenues are shrinking; it looks as though the total debt eclipses the entire value of a company, making equity-ownership (that which private equity firms created so much debt to purchase) worth nothing. Not only are many private equity firms not admitting this by refusing to use similar accounting practices that public companies use, but the effects of these problems might not be felt until much later down the line. One of the current problems with the structure of a company that's been 'taken private' is the huge debt burden it now has; its competitive ability is dramatically reduced: the article mentions a few case studies, notably Linens 'n Things (private equity owned with an LBO, now out of business) vs. Bed, Bath, and Beyond (publicly traded).
Monday, February 2, 2009
Auditing firms try to have a global brand without the global responsibility
Business Week - Audit Firms' Global Ambitions Come Home to Roost
A recent US District Court of Southern District of New York wrote in a ruling that accounting firm DTT could be held liable in a shareholder suit filed against one of their 'loose affiliates' that operated in Italy and audited a dairy corporation Parmalat. This company hid money and losses and the prosecutors allege that they did so with the assistance of DTT's child, Deloitte Italy. The ruling stated that despite the disclaimers, fine print, and claims of independent ownership of each firm in each country, the parent firm offered 'seamless service across national boundaries', which can only be accomplished through affiliate organizations. The parent organization gets its financial support from its 'affiliates' and gives quality control, dispute resolution, and joint marketing. The auditing firms want to offer global services but without the up-line liability. This ruling, while not binding on other judges, could significantly alter the way the big public auditing firms do business.
A recent US District Court of Southern District of New York wrote in a ruling that accounting firm DTT could be held liable in a shareholder suit filed against one of their 'loose affiliates' that operated in Italy and audited a dairy corporation Parmalat. This company hid money and losses and the prosecutors allege that they did so with the assistance of DTT's child, Deloitte Italy. The ruling stated that despite the disclaimers, fine print, and claims of independent ownership of each firm in each country, the parent firm offered 'seamless service across national boundaries', which can only be accomplished through affiliate organizations. The parent organization gets its financial support from its 'affiliates' and gives quality control, dispute resolution, and joint marketing. The auditing firms want to offer global services but without the up-line liability. This ruling, while not binding on other judges, could significantly alter the way the big public auditing firms do business.
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