By requiring auditors to opine on the effectiveness of a client's internal controls over financial reporting, the Sarbanes Oxley Act of 2002 (SOX) creates a new pressure point for management. Reports of material weaknesses in internal controls can indirectly affect a firm's cost of equity capital and chief financial officers are often replaced within six months after these reports. This new regulatory environment provides a strong incentive for managers to attempt to persuade auditors that observed internal control deviations are not deficiencies.

The post discusses the recently disclosed bids in the Federal Deposit Insurance Corporation's May 2009 auction of BankUnited Financial Corp. The bids show that the "highest" bidder did not necessarily win the auction, and that the FDIC's decision making process is less formulaic than might be expected.

China's efforts to limit access to information about ethnic violence in the country, which has resulted in over 150 deaths, shows that the Internet is more difficult than traditional media to control, but not impossible.

This is one of those books that sits with you long after you've finished it. The Forever War, by Dexter Filkins, the renowned war correspondent from the New York Times, was a fascinating read chronicling the author's time spent in Afghanistan before and after 9/11/2001, and his three plus years in Iraq after war was declared in March 2003.

On April 10, 2009, Delaware's governor signed into law legislation that has the potential to impact significantly the election of directors. These changes are effective August 1, 2009, but generally would not affect companies until the 2010 proxy season.

"When the music stops, in terms of liquidity, things will be complicated. As long as the music is playing, you've got to get up and dance. We're still dancing." Former Chairman and CEO of Citigroup Inc., Charles O. Prince, July 9, 2007, four months before being ousted after reporting an unexpected $11 billion write-off of subprime mortgage losses. The music has now stopped and the world has begun to deal with the complicated web created by the financial markets' collapse, and to determine how to prevent future market catastrophes.

The traditional approach to Google Adwords is to set a bid price for each keyword. This is known as Cost Per Click (CPC). Google then then uses the bid prices in conjunction with a secret formula (the quality score) to decide how high to rank your ad in the Adwords results. If you bid more, your ad will appear higher and typically get more clicks, but your cost per click will increase. So setting an optimal bid price is important. Bid too little and you won't rank high enough to get a decent number of clickthroughs. Bid too much and you will potentially end paying more to Google than you recoup in sales. An alternative approach is to tell Google Adwords how much you are prepared to pay for a particular action, e.g. a sign-up, download or sale. This is known as Cost Per Action (CPA) or Conversion Optimizer. Google will then automatically calculate your bid prices and attempt not to exceed the CPA you set (although this isn't guaranteed). CPA sounds great. I can stay in bed

If you take budgeting seriously, people sometimes think you are a curmudgeon. When I was at the Congressional Budget Office, for example, we were once denounced as anti-housing because we concluded that increasing subsidies for low-income housing wasn't free. CBO reached that conclusion using an advanced tool known as "arithmetic," but some advocates tried to portray it as an anti-housing policy statement.

Much ink, both physical and electronic, has recently been spilled on the question of whether the United States should undertake a second stimulus. To which there is only one possible answer: we already did a second stimulus.

Today's Washington Post has a story about some research done at Carnegie Mellon University on the possibility of guessing a person's Social Security number. The researchers, Alessandro Aquisti and Ralph Gross, found that, by using this information and an individual's place and date of birth, they could get a good start on discovering someone's SSN.

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