May 2013 archive

Battling Auditor-Enabled Fraud

Even after the increased regulation associated with the Sarbanes-Oxley Act (SOX) in July 2002, the audit profession continues to deal with questions of whether they are truly independent from the companies who employ them and overall audit effectiveness. A recent report commissioned by the Center for Audit Quality (“CAQ”) specifically examines Securities and Exchange Commission …

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Consideration of Taxes in a Lost Earnings Calculation

Considering taxes in a lost earnings calculation related to personal injury matters may materially alter the damages amount.  In the well-known 1980 Supreme Court case, Norfolk & Western Railway Co. v. Liepelt, the Court ruled that courts should consider taxes and calculate lost earnings net of income taxes.  The Court’s rationale was that the damage …

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Is College Worth It?— New Econometric Methods Provide Another Approach

In a previous post, Eric discussed a Brookings Institution policy brief that argued, among other things, that college education is a poor investment for some students. This assertion is based in large part on the negative return on investment (ROI) reported by Payscale.com for certain non-selective colleges. The problem with this sort of analysis, however, …

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Compensation Structure Can Increase Fraud Risk

A recent study in The Journal of Financial Economics suggests that a compensation structure that relies on financial performance measures can be tied to incidences of fraud.  Generally, the study concludes that individuals are more likely to engage in financial misstatements when the there is little downside and high upside.  The implication is that this relationship can have …

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Permanent link to this article: http://betweenthenumbers.net/2013/05/7613/

The painful post-graduation hangover not from last night’s party

College grads are waking up the day after graduation to a nasty hangover and stinging slap of reality. Yes, the last four years were a fantastic experience. But, wow, they were expensive. Some recent betweenthenumbers posts have explored the cost-benefit tradeoff of a college education (see here and here). Researchers are not the only ones who are …

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No Expert Leads to No Damages

A recent ruling in a New Jersey federal court will no doubt serve as a warning for litigants who decline to employ the services of an expert to establish reasonable royalties.  In the matter of Unicom Monitoring, LLC (“Plaintiff”)v. Cencom, Inc. et al (Civil Action No. 06-1166 (MLC)), U.S. District Judge Mary L. Cooper granted …

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ATMs Robbed – No Guns Involved!

Banking is changing these days.  You don’t even need to go into the bank to deposit checks anymore, you can do it right from your smartphone.  Even if you go into the bank, certain banks have ATM or other sophisticated computer modules in order for you to handle transactions so you do not have to …

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Google Sued Over Autocomplete

Google’s autocomplete search function is the subject of several legal disputes around the world in which plaintiffs accuse the search engine giant of defamation and invasion of privacy. The libel allegedly occurs when a subject’s name is typed into the search bar and Google autocompletes the query with an undesirable phrase added on. For example, …

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Can the winner(s) of the Powerball lottery choose to be $223.1 million poorer?

Things are starting to heat up again, and I’m not referring to the scorching pre-summer heat! The Powerball Lottery, played in 43 states, is approaching all-time highs. Saturday’s drawing is estimated at $600 million and gearing up to be the second-largest jackpot in US history. According to the Powerball Lottery, the odds of winning this …

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Sell in May and Go Away?

A common adage in Wall Street circles is “sell in May and stay away,” which is based on the notion that the stock market tends to perform poorly between May and October relative to other portions of the calendar year. This trading advice is also known as the “Halloween Indicator” because the period to avoid …

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