Liliana Feleagă

Voicu D Dragomir
email: voicu.dragomir@cig.ase.ro

Niculae Feleagă

NATIONAL ACCOUNTING CULTURE AND THE RECOGNITION OF PROVISIONS: AN APPLICATION OF THE PRUDENCE PRINCIPLE

Keywords: mixed research methods, accounting conservatism, European companies, national accounting culture, international harmonization

Prudence in accounting is a corner-stone concept which has shaped accounting theory, as well as ordinary financial reporting. Thus, on the quantitative side of the study, we developed a proxy for accounting conservatism, namely the degree of uncertainty associated with the settling of a company's obligations. To this purpose, we handcollected accounting data for 388 business groups from 17 European countries. For these companies we computed the provisions-to-liabilities ratio (PLR) and performed several group tests, according to the following original classification of national accounting cultures. The results indicate that companies incorporated in countries that are classified as 'conservative' do assign a significantly higher degree of uncertainty to their total amount of liabilities.

Introduction

The recourse to the prudence principle is sometimes the pretext for adjusting a company's financial performance towards market expectations or the managers' interest for certain income patterns. A large body of literature has attempted to point out that managers are inclined to adopt certain politics of earnings management in order to maximize their own remuneration or boost share prices.

The positive accounting theory has indicated three major managerial goals, to account for earnings management: the control of political costs [START_REF] Labelle | Gestion du bénéfice à la suite d'une crise environnementale: un test de l'hypothèse des coûts politiques[END_REF], the reduction of financing costs [START_REF] Broye | Comment réduire la sous-évaluation lors de l'introduction en bourse?[END_REF][START_REF] Stolowy | Recherche du Groupe HEC (projet A[END_REF], and the maximization of executive remuneration [START_REF] Jensen | Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure[END_REF]. In Europe, however, the large shareholders -as self-appointed members of the Board of directors -often take part in the running of the business. Thus, earnings management is no longer targeted primarily at the welfare of the owners, but at the alteration of perceptions of other stakeholders (e.g. the government, banks, customers or employees) regarding the firm's financial performance, with consequences on costs and benefits of future transactions [START_REF] Breton | Manipulation comptable: les dirigeants et les autres parties prenantes[END_REF].

In this respect, managers may be tempted to downsize the annual income in order to avoid difficult negotiations with employees or unions [START_REF] Waterhouse | Strategic financial disclosure : evidence from labor negociations[END_REF]. Moreover, such accounting policies have the ability to readily justify the initiation of a restructuring programme, in order to revive future performance. Clearly, the social risk of an announced restructuring plan is much higher for a company with robust performance than for a company with more volatile or pessimistic prospects [START_REF] Breton | Manipulation comptable: les dirigeants et les autres parties prenantes[END_REF].

Earnings management is the effect of the existence of alternative accounting policies. In this respect, the recognition and measurement of provisions are some of the key techniques for earnings management, granting company executives the ability to make the desired adjustments of the operating income figure [START_REF] Jeanjean | Incitation et contraintes à la gestion du résultat[END_REF]. The previous literature has focused mainly on the impairment of assets, rather than on provisions for risks and charges, and has reported mixed results concerning their contribution to the phenomenon of earnings management. Thus, some authors provided evidence on a strong link between impairment adjustments and earnings management [START_REF] Bhat | Banks and income smoothing: an empirical analysis[END_REF]; [START_REF] Greenwalt | Bank loan-loss provisions and income smoothing hypothesis: an empirical analysis 1976-1984[END_REF][START_REF] Kanagaretnam | Joint tests of signalling and income smoothing through bank loan loss provisions[END_REF], while for others this relationship is still doubtful [START_REF] Ahmed | Bank loan loss provisions: a re-examination of capital management, earnings management and signaling effects[END_REF][START_REF] Beatty | Managing financial reports of commercial banks: the influence of taxes, regulatory capital, and earnings[END_REF]. Nevertheless, this investigation is fruitful for further research, since accounting theory predicts the alteration of the true and fair view through the abusive use of provisions.

Earnings management is an all-encompassing term for a series of phenomena which aim to elude the provision of a 'true and fair view'. However, the factors that trigger earnings management cannot be limited to the discretion of managers and agency conflicts with the owners. We believe that there are more profound causes, some deeply rooted in the national accounting culture to which any company belongs. At the same time, the accounting traditions may be well influenced by some of the problematic cases listed above, e.g. the difficult negotiations with employees and unions, fiscal pressures, restructuring opportunities or the relationship with finance institutions.

Our contribution is focused on the following hypothesis: regarding the recognition and measurement of provisions for risks and charges, national accounting culture is still visible even when companies report in compliance with IFRS. Provisions are one of the main vehicles for earnings management. Therefore, the accounting policies offered by the International Financial Reporting Standards (IFRS) regarding the treatment of provisions have created a large avenue for interpretation and 'creativity', and thus for earnings manipulation.

However, in this study we are not interested in the quality of reported earnings, but in the degree of uncertainty associated with the settling of a company's obligations. We measure this indicator by computing the ratio of short-and long-term provisions to total liabilities (PLR), in order to use it as a proxy for accounting conservatism. Prudence in accounting is one of those corner-stone concepts which populate accounting theory, as well as accounting practice, sometimes in obscure and perverse ways. Accounting conservatism is one of the most popular excuses for earnings management, and thus an appropriate variable for our study.

To this purpose, we hand-collected accounting data (i.e. provisions and total liabilities) for 388 business groups from 17 European countries. The companies were extracted from a European large-cap index, and are representative for sectors such as: automobiles and parts, basic resources, chemicals, construction and materials, food and beverage, healthcare, industrial goods and services, media, oil and gas, retail, technology and telecommunications, travel & leisure, and utilities. For these companies we computed the provisions-to-liabilities ratio (PLR) and performed several group tests, according to our own classification of national accounting cultures.

The degree of conservatism is believed to be one of the fundamental attributes of a national accounting culture. In the European Union, each member state kept its own accounting standards, harmonized with the European Directives. However, listed companies have to draw their annual accounts in accordance with the IFRSs, which exhibit a totally different paradigm. We classified the 17 European countries in our sample in three groups -IFRS-compliant, conservative and liberal -according to how domestic standards recognize and measure provisions for risks and charges, when compared to IFRS. The companies in our sample belong to the following accounting environments: IFRS-compliant (147 firms), conservative (179) and liberal (62). Therefore, we perform several statistical group tests in order to answer the research question: is accounting culture still a significant factor in the choice of accounting policies, even if the companies are presumably following uniform accounting standards, such as IFRS?

The paper is organized as follows. The literature review section offers a discussion of the causes, manifestations and effects of accounting conservatism, whether tied to earnings management or to national accounting culture. The hypothesis development section offers a review of domestic accounting policies regarding the recognition and measurement of provisions, for the 17 European countries where the sample companies are incorporated. The methodology and results section presents the sample selection and the detailed statistical tests, along with a discussion of the implications of our findings. As a conclusion of this paper, we attempt to offer a perspective on the fruitfulness of future research on such topics such as the convergence of national accounting culture with international accounting standards.

2 Literature review and hypothesis development

An overview of the conservatism principle and its financial effects

Prudence is undoubtedly the most controversial accounting principle, because it systematically adopts a pessimistic outlook on economic transactions. Although the mechanics of prudence (or conservatism) may seem easily applicable in practice, the providers and users of accounting information usually concern themselves with questions such as: why this pessimistic approach to doing business and when is it suitable? Why this asymmetry in treating surpluses and deficits? Which are the pros for keeping the conservatism principle?

An abundant literature has sought to answer such questions regarding the benefits and deficiencies of prudent recognition of accounting elements. Some of the dedicated studies tackle conservatism from a conceptual perspective, while others provide empirical evidence on accounting conservatism.

Traditionally, prudence has been reflected in accounting by the proverb 'anticipate no profit, but anticipate all loses' [START_REF] Bliss | Management through accounts[END_REF][START_REF] Pae | The Link Between Earnings Conservatism and Balance Sheet Conservatism[END_REF]. Anticipating profits leads to an early recognition, even before there is legal claim to the revenues generating them. A conservative approach does not require all revenue to be cashed in, but all revenue-generating transactions to be easily verifiable (Watts 2003a). The influence of conservatism on accounting philosophy has been overwhelming. Thus, in 1967, Sterling (cited in Hellman 2008), noted that 'many academics and accountants are only moderately conservative or anticonservative when it concerns a theoretical discussion regarding accounting principles, but when it comes to the valuation of a specific asset, the recurrent phrase that something "is or is not conservative" is almost inevitable'. Apparently, Sterling's remark on the gap between the theoretical and applied views on accounting conservatism still holds today [START_REF] Hellman | Accounting Conservatism under IFRS[END_REF]).

In the context of empirical research, the definition from Bliss is interpreted as 'the accountant's tendency to require a higher degree of verification to recognize good news as gains than to recognize bad news as losses' [START_REF] Basu | The conservatism principle and the asymmetric timeliness of earnings[END_REF]. The verifiability imperative results in asymmetric earnings timeliness with respect to gains versus losses, resulting in a cumulative understatement of net assets (Watts 2003a). This interpretation allows for degrees of conservatism: the greater the difference in degree of verification required for gains versus losses, the greater the conservatism [START_REF] Watts | Conservatism in Accounting[END_REF]. In this respect, [START_REF] Basu | The conservatism principle and the asymmetric timeliness of earnings[END_REF] proved that the slope coefficient in the regression of earnings on returns is higher for firms reporting negative returns than for those reporting positive returns. [START_REF] Kwon | The demand for accounting conservatism for management control[END_REF] formulate the principles of traditional financial reporting in the context of efficient contracting, with a manager subject to limited liability, considering that 'the accounting system is more likely to report "low" when the outcome is low than to report "high" when the outcome is high' (p.32). Their definition is consistent with that of Basu's, considering that a higher verification is required for high outcomes (gains) than for low outcomes (losses).

For a sample of US firms followed over a three-year period, [START_REF] Pae | The Link Between Earnings Conservatism and Balance Sheet Conservatism[END_REF] found that earnings are generally conservative in the sense that the sensitivity of earnings to returns is greater for "bad news firms" (those experiencing negative returns) than for "good-news firms" (those experiencing positive returns). Balance sheets are generally conservative in that both mean and median market-to-book ratios exceed one.

LaFond & Watts (2007) investigated the effect of informational asymmetry between management and investors on accounting conservatism, suggesting that the asymmetric recognition of gains and losses in the current financial statements is increasing the level of information asymmetry. Similarly, [START_REF] Khan | Estimation and Empirical Properties of a Firm-Year Measure of Conservatism[END_REF] estimated a firm-year measure of financial reporting conservatism (C_Score) and provided evidence on its empirical properties as a metric and its predictive ability for future asymmetric timeliness. Specifically, firms with a higher C_Score have several characteristics associated with conservatism, such as a higher informational asymmetry and litigation propensity. [START_REF] Watts | Conservatism in Accounting[END_REF] reviews several explanations for employing prudence in accounting, such as: contracting, shareholder litigation, taxation and accounting regulation. The study reveals that when contracting and shareholder litigation explanations prevail in the existence of conservatism and its increase, the effect of taxation and regulation is weaker; earnings management could also produce some of the evidence on conservatism but it is unlikely to be the major explanation. These remarks support the idea that prudence may exist even in the absence of formal contractual use of financial statements. As long as income and net worth have an impact on managers' wealth, prudence will remain an optimal accounting principle.

Conservatism and national accounting culture

In a later article, Watts (2003a) offers further insight into the explanations of applying the conservatism principle, and formulates some implications for the accounting regulator. The particularity of this contribution resides in that it develops a general contracting explanation for conservatism that encompasses the existing dividend constraint explanation, and predicts that other contracts employed within the firm, such as managerial compensation contracts, will also generate conservatism. Furthermore, the study posits that, even without contracting considerations, an information perspective produces conservatism once the information costs of changed managerial behaviour are introduced. Watts (2003b) suggests that the contracting and shareholder litigation explanations are the most prominent. Evidence on the effects of taxation and regulation is weaker but consistent with those explanations. [START_REF] Ball | The effect of international institutional factors on properties of accounting earnings[END_REF] examined the variations in accounting conservatism for seven national standards, and argued that reported conservatism will vary depending on the institutional context. They hypothesize that a country's degree of accounting conservatism may vary according to the political and regulatory framework. For this reason, a codelaw/common-law classification can be used as an empirical proxy for cross-country institutional differences. The results indicated that market news is rapidly absorbed in stock prices for companies incorporated in common-law countries, in contrast with Roman law systems.

Giner and Rees ( 2001) extended Basu's model by examining the degree of conservatism implied by the use of current returns and lagged earnings. The analysis relied on a sample of firms from France, Germany and the UK, for the period between 1990 and 1998. The results indicate that lagged earnings explained current earnings better than current returns. However, the authors did not report any significant differences between the three countries, possibly indicating that accounting practices were already harmonized. [START_REF] Lara | The effect of earnings management on the asymmetric timeliness of earnings[END_REF] re-examined the above study, while adopting the unmanaged earnings measure (earnings minus discretionary accruals) rather than reported earnings. The latter authors provided evidence that there are significant differences between common-law and code-law countries, but only after correcting for the effect of discretionary accruals. They conclude that code-law based European country managers have an incentive to consistently manage earnings downward.

Another hypothesis of great interest refers to the influence of national culture on the degree of accounting conservatism. Using a nine-year panel comprised of 800 firms from 21 countries, [START_REF] Kang | The impact of culture on accounting choices: can cultural conservatism explain accounting conservatism?[END_REF] examined the relationship between cultural conservatism and accounting conservatism. Empirical evidence indicates that managers from more conservative cultural environments tend to make more conservative accounting choices. Furthermore, the interactions between national culture and the legal system are prone to explain prudence attributes. Results show that culture and the legal regime are independent variables, appropriate in explaining managers' conservative accounting choices. Specifically, the study highlights the fact that cultural conservatism plays a relatively more important role in explaining accounting conservatism in code law countries, where accounting is known to be less conservative (relative to common law countries), and vice versa.

International convergence of accounting standards has become a reality with growing impact on financial reporting and the functioning of markets. Thus, the inclusion of the prudence principle in a changing regulatory configuration is of particular interest to researchers. Therefore, [START_REF] Hellman | Accounting Conservatism under IFRS[END_REF] examined three situations: the judgment related to the recognition of deferred tax receivables pertaining to loss carryforwards under IAS 12, the judgment regarding the capitalisation and impairment of development costs under IAS 38, and the judgment regarding the use of the percentage of completion method and the zero recognition method during the completion of construction contracts under IAS 11. The author considers that the lower emphasis on consistent conservatism under IFRS will be replaced by an increased use of temporary conservatism. The temporary application of the conservatism principle (changes in accounting estimates) implies that profits will initially be understated, leading to the creation of a hidden reserve or to excessive provisions, followed by a subsequent overstatement of profits in later periods.

It has been argued that, comparative with national accounting, the temporary applications of the conservatism principle are built into the IFRSs to a greater extent. Moreover, companies' internal use of the IFRS mix of temporary and consistent applications of the conservatism principle may cause counter-intuitive interpretations of the underlying business activities, i.e. interpretations that may have negative effects on the controlling and motivation of managers.

The studies reviewed above have introduced several concepts gravitating around the conservatism principle: informational asymmetry, inconsistent recognition and measurement of financial elements, national accounting culture and the pressures for harmonization. The next section formulates the hypotheses of the study, while bringing into spotlight a very specific element of financial statements: provisions according to IAS 37. We believe that the recognition of provisions is intimately linked with accounting conservatism, and this is why we engage in establishing the connection between national culture and international accounting standards, through the analysis of the frequency and scale of this type of uncertain financial liabilities.

Hypothesis development

Provisions as a proxy for accounting conservatism

According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, a provision should be recognized when (a) an entity has a present obligation as a result of a past event; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation.

The present obligation may have either a legal nature (i.e. when it is found within contractual or regulatory bounds), or a constructive nature (i.e. when, by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities). The effect of possible new legislation is taken into consideration in measuring an existing obligation when sufficient objective evidence exists that the legislation is virtually certain to be enacted. In many cases sufficient objective evidence will not exist until the new legislation is enacted.

The amount recognized as a provision should be the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The estimates are determined by the judgment of the management of the entity, supplemented by experience of similar transactions and, in some cases, reports from independent experts. Where the provision being measured involves a large population of items, the obligation is estimated by weighting all possible outcomes by their associated probabilities. The name for this statistical method of estimation is 'expected value'. Where there is a continuous range of possible outcomes, and each point in that range is as likely as any other, the mid-point of the range is used.

Where the effect of the time value of money is material, the amount of a provision shall be the present value of the expenditures expected to be required to settle the obligation. The discount rate shall be a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

It is only those obligations arising from past events existing independently of an entity's future actions (ie the future conduct of its business) that are recognized as provisions (e.g. penalties or clean-up costs for unlawful environmental damage). In contrast, because of commercial pressures or legal requirements, an entity may intend or need to carry out expenditure to operate in a particular way in the future (for example, by fitting smoke filters in a certain type of factory). Because the entity can avoid the future expenditure by its future actions, for example by changing its method of operation, it has no present obligation for that future expenditure and no provision is recognized.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognized when it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset, while the amount recognized for the reimbursement should not exceed the amount of the provision. In the statement of comprehensive income, the expense relating to a provision may be presented net of the amount recognized for a reimbursement.

Beyond the generic recognition and estimation issues, IAS 37 also deals with two special types of provisions -those for onerous contracts and those for restructuring:

• The standard defines an onerous contract as a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. If an entity has a contract that is onerous, the present obligation under the contract shall be recognized and measured as a provision.

• A provision for restructuring costs is recognized only when an entity has a detailed formal restructuring plan, or has raised a valid expectation that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.

Domestic GAAP and the treatment of provisions

Beginning January 1, 2005, all European Union (EU) companies having securities listed on an EU exchange have been required to prepare consolidated (group) accounts in conformity with IFRS. Thus, the analysis of how certain IFRSs can be incorporated into national legislations represents an important avenue for research, mostly because standards like IAS 37 Provisions, Contingent Liabilities and Contingent Assets are at the core of the conservatism principle and incite to earnings management.

The next section of our research seeks to capture the regulatory differences in the treatment of provisions pertaining to the accounting standards of 17 European Union countries. Each Member State has its own domestic corpus of dedicated rules, all under the auspice of the Fourth Directive, which in this case is the lowest common denominator [START_REF] Peek | The use of discretionary provisions in earnings management: Evidence from the Netherlands[END_REF]. The significance of these differences may differ from one entity to another, depending on the actual economic transactions, the industry to which is belongs, or the chosen accounting policies. Moreover, the selection of the 17 countries is strictly linked to the sample of companies incorporated in these Member States, considering that only the largest firms in Europe were included in this study.

After a thorough analysis of national standards, three accounting professors agreed that the regulatory environments of our 17 sample countries could be classified according to the proximity between their national legislation and IFRS, as follows:

• An IFRS-compliant national regulation contains virtually identical rules to those of IAS 37 -United Kingdom, Sweden, Norway and Ireland;

• Conservative domestic rules regarding provisions are thought to increase the degree of accounting conservatism, by an anticipated and extended recognition of provisions in the financial statements -France, Germany, Switzerland, the Netherlands, Finland, Belgium and Austria;

• Liberal national accounting rules generally impose less than IFRS, and suggest a more superfluous treatment of provisions for firms incorporated in certain European countries -Spain, Italy, Denmark, Portugal, Greece and Luxembourg.

For example, in France, The General Accounting Plan imposes the recognition of legal provisions, which do not correspond to the regular object of a provision and which are measured according to State norms [START_REF] Dick | Les provisions pour risques et charges en France et en Allemagne à la lumière des évolutions internationales récentes[END_REF]. These include provisions: for exchange rate fluctuations, for investments in certain fields (e.g. mining), and for investments relative to the employees' participation. Among the ordinary provisions, unlike IAS 37, the French GAAP imposes the recognition of provisions for predictable and significant charges, which occur on a systematic basis, but not yearly, and which should not be included in full amount on a given year in the profit and loss account. On the other hand, there are fewer details than in IAS 37 on the measurement criteria of restructuring provisions. Unlike IAS 37 and IAS 21 on 'Effects of changes in foreign exchange rates', the French GAAP classifies as 'provisions for risks' all year-end latent losses concerning assets and liabilities expressed in foreign currency. Details are provided concerning yearly restatement of foreign exchange losses.

In the methodology and results section we will make use of the above classification, and report the findings for statistical tests applied to companies from these three groups of countries, seeking to find evidence in favour of the following hypothesis:

In the context of provisions for risks and charges, national accounting culture is still visible even when companies report in compliance with IFRS.

Sample selection and results

For the 600 companies included in the Dow Jones STOXX® 600 index, representing large, mid and small capitalization companies across 16 European Union countries and Switzerland, we followed the Industry Classification Benchmark (ICB) provided by Stoxx ltd. We excluded all those firms classified as belonging to the financial sector (143 entities), i.e. banking, insurance, mutual funds, or investment services. For the rest, we analyzed the consolidated financial statements and notes to the accounts, and eliminated 69 companies which either: (a) had reported under US GAAP -3 Swiss companies; (b) had not recognized any provisions -56 firms; or (c) were subsidiaries of other companies in our sample -10 cases. The final sample was comprised of 388 business groups from 17 countries.

We collected the cross-sectional raw data from the annual reports of the selected companies, for one fiscal year. Depending on the accounting period of each company, yearend dates varied between the 31 st December 2007 and the 30 th

Provisions for…

September 2008. We analyzed the information regarding a company's provisions from the notes to the annual accounts. The provisions are recognized strictly according to the IAS 37, thus excluding all elements dealing with accounting for employee benefits (IAS 19), income taxes (IAS 12), leases (IAS 17), or financial instruments carried at fair value (IFRS 7). Each company may recognize several types of provisions for a given fiscal year; the frequency of each category of provisions is provided in Table 1. In several cases the reported amounts were included under the heading 'Other provisions' and we were unable to classify them properly.

Main empirical analysis

The purpose of this article is to answer the following research question: do European firms belonging to contrasting accounting cultures recognize provisions in a significantly different manner when reporting under IFRS? In other words, is the national accounting regulation a major factor in the preparation of IFRS-compliant consolidated financial statements? In the previous section, we argued for a classification of national accounting systems into IFRS-compliant, conservative, and liberal, based on the treatment of provisions particular to each of these.

In accordance with the literature review, we employ only one test variable, namely the ratio of short-and long-term provisions to total liabilities (PLR). We use it as a proxy for the degree of uncertainty associated with the settling of a company's obligations. Moreover, the analysis implies that PLR can be a measure of the degree of country-specific conservatism infiltrated into the recognition and measurement of provisions under IFRS. The descriptive statistics presented in Table 2 highlight the main characteristics (mean, median and standard deviation) of the sample companies, when classified according to their country of incorporation. In line with the grouping of countries according to their degree of convergence between the national regulation and IFRS, the superscript next to each country designates the dominating attribute of the national accounting standards. Using PLR as a dependent variable and national accounting culture as a factor, a oneway ANOVA was performed to compare the degree of prudence across the three groups of countries. The results indicate that the influence of national regulation generates significant differences, F(2,385) = 10.613, p < .001, in the recognition and measurement of provisions under IFRS. However, the homogeneity-of-variance assumption was violated, with Levene's statistic W(2,385) = 9.936, p < .001; similarly, the Shapiro-Wilk test indicated that the normality assumption was untenable for any of the three groups of countries.

Table 2. Descriptive statistics concerning the provisions to liabilities ratio (PLR) for companies grouped by their country of incorporation

Performing log transforms on the dependent variable rectified the normality problem, as indicated by the respective normal probability plots. In addition, Levene's test of equal variances, W(2,385) = 1.112, p = .330, suggested that data transformation improves the results of assumption testing. The second omnibus F-test is qualitatively identical to the first, F(2,385) = 10.131, p < .001, reflecting a medium effect, Cohen's f = .233 (Cohen, 1988). A non-parametric ANOVA test (Kruskal-Wallis) was performed on the untransformed data, χ 2

Further tests and sample particularities

(2) = 18.416, p < .001, indicating that significant differences exist between the levels of prudence in the measurement of provisions, for companies belonging to different accounting cultures.

Since the homogeneity-of-variance assumption is not met for the untransformed data, we used Tamhane's T2 post-hoc test, which is generally insensitive to heteroscedasticity, skewness, or unequal sample sizes. Pairwise contrasts indicated that companies incorporated in countries with a conservative accounting culture were prone to recognizing significantly greater amounts (p < .001) of provisions than companies from IFRS-compliant or liberal accounting environments. In addition, it appears that liberal national accounting regulation does not influence companies in departing from the spirit of IFRS; thus there is no significant difference between the PLR averages of these last two groups of countries. The results presented above hold for any post-hoc test, either on the untransformed data or in logs.

It is crucial to remember that, for all sample companies, the measurement and recognition of provisions is done in accordance with IFRS for the preparation of consolidated annual accounts; our study does not apply to individual financial statements following the national accounting standards. The following discussion should clarify some of the particularities of our sample, in terms of distribution, outliers and possible causes for the existence of the significant inter-group differences in terms of accounting conservatism, and their effect on the comparability of consolidated financial statements.

In order not to overestimate the power of our test, it is important to acknowledge the interaction between industry characteristics and national accounting culture. For our variable of interest -PLR (i.e. the proxy for accounting conservatism) -Table 3 presents the descriptive statistics associated with industry classification for the sample companies. As expected, a one-way analysis of variance (ANOVA) revealed that the average PLR is significantly different across industries F(14, 373) = 3.106, p < .01; the non-parametric Kruskal-Wallis test of mean differences for independent samples confirms this result, χ 2 (14) = 43.269, p < .001. Significant differences between groups were examined using Tamhane's T2 post-hoc test, which is robust when equal variances are not assumed. The results for pairwise comparisons are presented in Table 3.

The uncertainty associated with liability recognition appears not to significantly discriminate between sectors. Chemical companies, having the highest average ratio of provisions to liabilities, can be considered to be significantly more prudent than media, telecommunications, food & beverage or retail firms. Even if mean PLR varies across sectors, the large variability within each sector leads to overlapping confidence intervals. Further analysis will try to reveal how extreme sector-driven PLR values impact the between-country differences of average conservatism scores. All three distributions for PLR scores grouped according to national accounting culture are positively skewed (see Table 4 for skewness and kurtosis statistics). Therefore, all outliers are above the top quartile.

We expect sector-specific conservatism to have a considerable influence on the shape of the distribution for company scores grouped according to national accounting culture. Accordingly, in Table 4 we further identify the industrial profile of each outlier. Thus, even if chemical companies do add a certain amount of positive skewness to the Conservative group, their influence is combined with the statistical impact of companies from several other sectors, like industrial goods and services, healthcare, utilities, technology or oil and gas. It appears that seven sectors carry outliers with respect to the distribution of PLR for companies belonging to a prudent accounting culture, therefore allowing us to conclude that abnormal distribution of scores in the Conservative group is not caused by the influence of one particular sector. Note. The normal distribution has a skewness of 0 and an excess kurtosis of 0.

Conclusions

Our contribution rests on a large body of work regarding earnings management, but on a very meagre scientific base in relation to the measurement of accounting conservatism in a national setting. We identified the degree of uncertainty associated with the settling of a company's obligations as a proxy for accounting conservatism. This degree of uncertainty was measured as the ratio of short-and long-term provisions to total liabilities (PLR), and was hand-collected for 388 large companies incorporated in 17 EU member states. We further classified the respective countries in three groups, according to how provision recognition is handled by national accounting regulation. Thus, we concluded that there is a certain "domestic accounting culture", classified as IFRS-compliant, conservative or liberal.

The results indicate that companies incorporated in countries that are classified as 'conservative' do attribute a significantly higher degree of uncertainty to their total amount of liabilities. If we take into account that all the companies in our sample prepare their annual accounts in compliance with IFRS, we can conclude that national accounting culture -when classified as prudent -exhibits a significant influence on the IFRS policies that companies apply with regard to the recognition and measurement of provisions. In other words, even if the International Financial Reporting Standards are the common accounting language of listed companies in Europe, the chapter on provisions is still a matter of managerial discretion, whether influenced by traditional accounting practices or by other factors. Data collection for an extended time span should bring further insight into determining the degree of uncertainty associated with the settling of a company's obligations. Moreover, this avenue of research is generous enough to include financial institutions as well. Finally, identifying a connection between the quality of a company's corporate governance and its degree of accounting conservatism is another direction of future research, in the context of establishing the economic causes and consequences of adopting a prudent stance within the annual accounts.

Table 1 . The classification and frequency of provision types recognized under IAS 37.

 1

		Frequency		Percent
		(no.	of	(sample	size:
		companies)		388)
	Litigation	242		62,4
	Restructuring	208		53,6
	Warranties	134		34,5
	Environmental	118		30,4
	Onerous contracts	110		28,4
	Properties	106		27,3
	Personnel costs	105		27,1
	Abandonment	47		12,1
	Marketing	46		11,9

Table 3 . The descriptive statistics and post-hoc tests associated with sector-specific accounting conservatism for the sample companies.

 3

	Sectors	No. of	PLR	PLR	PLR
		companies	Mean	Std.	Median
				Dev.
	Automobiles & parts	12	7.48	4.31	7.21
	Basic resources	23	4.79	4.24	4.23
	Chemicals (1)	19	12.12	8.41	11.34
	Construction and materials	31	5.74	3.45	5.69
	Food & beverage (2)	21	3.57	2.31	3.10
	Health care	24	6.47	8.66	2.76
	Industrial goods and services	85	6.16	5.01	5.14
	Media (2)	20	3.26	2.77	2.39
	Oil & Gas	30	6.62	6.29	3.17
	Personal & household goods	24	6.24	6.10	5.36
	Retail (2)	20	2.49	1.88	1.14
	Technology	12	6.07	5.73	4.47
	Telecommunications (2)	19	3.47	2.93	2.28
	Travel & leisure	19	6.32	7.84	4.81
	Utilities	29	6.54	9.10	4.10

Notes.

Differing indices indicate significant differences between PLR means, p < .05.

Table 4 . The distribution of PLR scores grouped by national accounting culture, with an analysis of outliers.

 4

	National	PLR Distribution			Outliers
	accounting	Skewness	Kurtosis	Count		Belonging to sector
	culture	(Std. Error)	(Std.	(above	top
	(No. of		Error)	quartile)
	companies)
	IFRS-compliant	1.30	2.22	4		3 x Oil & Gas
	(147 companies)	(0.20)	(0.39)	(PLR > 15 %)	1 x Basic resources
	Conservative	2.08	5.60	16		5 x Chemicals
	(179 companies)	(1.82)	(0.36)	(PLR > 16%)	4 x Industrial goods and
						services
						2 x Utilities
						2 x Healthcare
						1 x Personal & household
						goods
						1 x Technology
						1 x Oil & Gas
	Liberal		14.06	3		1 x Oil & Gas
	(62 companies)	(0.30)	(0.59)	(PLR > 14%)	1 x Travel & leisure
						1 x Healthcare


Avencia Sánchez-Mejías

Yuli Watanabe

Raquel M Fernández

Manuel López-Alonso

Guillermo Antiñolo

Nadege Bondurand

MD Salud Borrego
email: salud.borrego.sspa@juntadeandalucia.es

Involvement of SOX10 in the pathogenesis of Hirschsprung disease: report of a truncating mutation in an isolated patient

Keywords: SOX10, Hirschsprung disease, neurocristopathology, Waardenburg syndrome, enteric nervous system

SOX10 protein is a key transcription factor during neural-crest development.

Mutations in SOX10 are associated with several neurocristopathies such as Waardenburg syndrome type IV (WS4), a congenital disorder characterized by the association of hearing loss, pigmentary abnormalities and absence of ganglion cells in the myenteric and submucosal plexus of the gastrointestinal tract, also known as aganglionic megacolon or Hirschsprung disease (HSCR). Several mutations at this locus are known to cause a high percentage of WS4 cases, but no SOX10 mutations had been ever reported associated to isolated HSCR patient. Therefore, nonsyndromic HSCR disease was initially thought not to be associated to mutations at this particular locus. In the present study, we describe the evaluation of the SOX10 gene in a series of 196 isolated HSCR cases, the largest patient series evaluated so far, and report a truncating c.153-155del mutation. This is the first time that a SOX10 mutation is detected in an isolated HSCR patient, which completely changes the scenario for the implications of SOX10 mutations in human disease, giving us a new tool for genetic counselling.

Introduction

SOX10 encodes a 466-amino-acid transcription factor belonging to an evolutionary conserved protein family, which contains a central high mobility group (HMG) DNA-binding/DNA-bending domain and a C-terminal transactivation domain [START_REF] Pevny | Sox genes find their feet[END_REF][START_REF] Wegner | From head to toes: the multiple facets of Sox proteins[END_REF]. In a manner similar to all members of this family, SOX10 exerts its function through binding to the promoters or enhancers of its target genes, alone or in association with other transcription factors [START_REF] Kuhlbrodt | Sox10, a novel transcriptional modulator in glial cells[END_REF][START_REF] Kamachi | Mechanism of regulatory target selection by the SOX high-mobility-group domain proteins as revealed by comparison of SOX1/2/3 and SOX9[END_REF]. SOX10 is a key transcription factor during neural-crest derived cells migration and differentiation, and MITF, TYR, TRP2, MPZ, GJB1, RET and EDNRB are known to be target genes for SOX10 regulation [START_REF] Kuhlbrodt | Sox10, a novel transcriptional modulator in glial cells[END_REF][START_REF] Kamachi | Mechanism of regulatory target selection by the SOX high-mobility-group domain proteins as revealed by comparison of SOX1/2/3 and SOX9[END_REF][START_REF] Bondurand | Interaction among SOX10, PAX3 and MITF, three genes altered in Waardenburg syndrome[END_REF][START_REF] Bondurand | Human Connexin 32, a gap junction protein altered in the X-linked form of Charcot-Marie-Tooth disease, is directly regulated by the transcription factor SOX10[END_REF][START_REF] Peirano | The glial transcription factor Sox10 binds to DNA both as monomer and dimer with different functional consequences[END_REF][START_REF] Lang | Sox10 and Pax3 physically interact to mediate activation of a conserved c-RET enhancer[END_REF][START_REF] Ludwig | Melanocyte-specific expression of dopachrome tautomerase is dependent on synergistic gene activation by the Sox10 and Mitf transcription factors[END_REF][START_REF] Zhu | Spatiotemporal regulation of endothelin receptor-B by SOX10 in neural crestderived enteric neuron precursors[END_REF][START_REF] Murisier | The tyrosinase enhancer is activated by Sox10 and Mitf in mouse melanocytes[END_REF]. SOX10 modulate gene expression of pluripotent neural-crest cells that migrate from the neural tube throughout the embryo along several pathways during embryogenesis. Those precursors give rise to enteric neurons and glia, some of the craniofacial skeletal tissue, melanocytes of the skin and inner ear, in addition to other cell types [START_REF] Douarin | The Neural Crest[END_REF].

The first pathogenic mutations described for SOX10, was associated with the Waardenburg syndrome type IV (WS4, OMIM 277580) [START_REF] Pingault | SOX10 mutations in patients with Waardenburg-Hirschsprung disease[END_REF], a congenital disorder characterized by hearing loss and pigmentary abnormalities due to an abnormal proliferation, survival, migration, or differentiation of neural-crest-derived melanocytes, combined with absence of ganglion cells in the myenteric and submucosal plexus of the gastrointestinal tract, also known as aganglionic megacolon or Hirschsprung disease (HSCR, OMIM 142623) [START_REF] Read | Waardenburg syndrome[END_REF]. The association of WS to intestinal pseudoobstruction instead of HSCR disease is also observed in some WS4 patients [START_REF] Pingault | Peripheral neuropathy with hypomyelination, chronic intestinal pseudo-obstruction and deafness: a developmental "neural crest syndrome" related to a SOX10 mutation[END_REF]. Several subtypes of WS are defined on the basis of the presence of additional symptoms, being known as WS2 the presentation of clinical features of WS alone.

WS4 phenotype has been reported to be caused by SOX10 point mutations as well as gross deletions, presented in 45-55% of patients [START_REF] Bondurand | Deletions at the SOX10 gene locus cause Waardenburg syndrome types 2 and 4[END_REF]. Most of such SOX10 point mutations responsible for WS4 generate premature stop codons arising as de novo events in the patients [START_REF] Verheij | Shah-Waardenburg syndrome and PCWH associated with SOX10 mutations: a case report and review of the literature[END_REF]. Of note, no SOX10 mutations have been ever reported to date associated to isolated HSCR patient.

On the other hand, heterozygous SOX10 mutations are associated with a large range of phenotypes beyond WS4, including WS2 (pigmentation defects and deafness but no HSCR), and clinical features that reflect an involvement of the central and/or peripheral nervous system regrouped under the name of PCWH (Peripheral demyelinating neuropathy, Central dysmyelinating leukodystrophy, Waardenburg syndrome, and Hirschsprung disease; OMIM 609136) [START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF]. Taking the phenotype variability observed so far, SOX10 may be regarded as an interesting candidate gene in other neurodegenerative disorders and neurocristopathies. In this sense, the implications of SOX10 in the pathogenesis of HSCR have been largely discussed. A correlation between HSCR phenotype in WS4 patients and severity of SOX10 mutations has been observed [START_REF] Sham | Novel mutations of SOX10 suggest a dominant negative role in Waardenburg-Shah syndrome[END_REF]. However, since no SOX10 mutations could be detected in a series of patients with isolated HSCR, non-syndromic HSCR disease was initially thought not to be associated to mutations at this particular locus [START_REF] Pingault | SOX10 mutations in patients with Waardenburg-Hirschsprung disease[END_REF]. In the present report we have sought to completely determine if SOX10 plays any kind of role in the pathogenesis of HSCR, by a screening of both point mutations and gene-dosage anomalies of its coding sequence in a series of 196 HSCR patients, the largest patient series evaluated so far.

Materials and Methods

Patients and control subjects

In this study we have included a total of 196 patients presenting with HSCR (22% female, 78% male), in one of those patients HSCR phenotype was associated to Waardenburg-Shah syndrome, while in the remaining 195 cases were isolated HSCR. 176 were sporadic cases, while 20 were familial cases belonging to 13 different families.

In addition, we have also analyzed a group of 150 normal controls comprising unselected, unrelated, race, age, and sex-matched individuals. An informed consent was obtained from all the participants for clinical and molecular genetic studies. The study conformed to the tenets of the declaration of Helsinki.

PCR, dHPLC analysis, sequence analysis, and QMF-PCR

Genomic DNA was extracted from peripheral blood leukocytes from patients and healthy controls, using standard protocols. Primers were designed for the mutational screening of the SOX10 coding region, the intron/exon boundaries and the 5' and 3' untranslated regions (UTRs). Primers and PCR conditions are available on supplementary table 1. The mutational screening was carried out on an automated dHPLC equipped with a DNA separation column using the WAVE DNA Fragment Analysis system (Transgenomic, Omaha, NE). Those samples with aberrant wave profiles were subjected to sequence analysis using an automated sequencer ABI 3730 and the software SeqScape Ver.2.5. (Applied Biosystems, Foster City, CA). When a novel sequence variant was detected, the exon harbouring the change was also screened in a group of 150 normal controls, as well as in all available family members of the proband, in order to evaluate the putative pathogenicity of the sequence variant underlying such profile.

To evaluate gene-dosage anomalies within SOX10 coding sequence we used a modification of the QMF-PCR method described elsewhere [START_REF] Bondurand | Deletions at the SOX10 gene locus cause Waardenburg syndrome types 2 and 4[END_REF]. We amplified in a multiplex reaction the three coding exons of SOX10, exon 4 of POLR2F, and a region located 5' of SOX10, using QIAGEN multiplex PCR kit (Qiagen, Germantown, MD). In addition, two control amplicons were used: DSCR1, located on chromosome 21, and F9, located on chromosome X. Primers and PCR conditions are available on supplementary table 2. Fragment analysis was performed using the 3730 DNA analyzer (Applied Biosystems, Foster City, CA) and for data analysis we used GeneMarker v 1.6 (Softgenetics L.L.C) comparing patients tested with controls. Dosage quotients under 0.6 were considered as indicating potential deletions.

Plasmids, Cell Culture, and Transfection

The pECE-SOX10, pECE-SOX10-E189X, pECE-PAX3, pECE-EGR2, pGL3-MITFdel1718, and pGL3-Cx32 vectors were described elsewhere [START_REF] Bondurand | Interaction among SOX10, PAX3 and MITF, three genes altered in Waardenburg syndrome[END_REF][START_REF] Bondurand | Human Connexin 32, a gap junction protein altered in the X-linked form of Charcot-Marie-Tooth disease, is directly regulated by the transcription factor SOX10[END_REF]. To generate pCMVMyc-SOX10, the human SOX10 cDNA (GenBank accession number AJ001183) was amplified by PCR using the primers 5'-TTGCTAAGAATTCATGGCGG-AGGAGCAGGATATC-3' and 5'-AATAATGCGGCCGCCTTCTCCTCTGTCCAGCCTG-3' and pECE-SOX10 as a template. The PCR product was then cloned in the pCMV-Myc (Clontech, Mountain View, CA) after EcoRI and NotI digestion. The mutations c.112_131del and c.153-155del were introduced independently within the pECE-SOX10 and pCMV-Myc-SOX10 constructs by site-directed mutagenesis using the Quick Change Site Directed Mutagenesis Kit (Stratagene, La Jolla, CA). The nucleotide sequence of each construct was verified by direct sequencing as described above.

HeLa cells were grown in DMEM supplemented with 10% fetal calf serum and transfected using Lipofectamine PLUS reagents (Invitrogen, Carlsbad, CA).

Reporter Assays

Cells were plated on 12-well plates and transfected 1 day after with 0.150 g of each effector and reporter plasmid. The total amount of plasmid was kept constant by addition of empty pECE vector. Twenty-four hours after transfection, cells were washed twice with PBS, lysed and extracts were assayed for luciferase activity using the Luciferase Assay System (Promega, Madison, WI) as described before [START_REF] Bondurand | Interaction among SOX10, PAX3 and MITF, three genes altered in Waardenburg syndrome[END_REF][START_REF] Bondurand | Human Connexin 32, a gap junction protein altered in the X-linked form of Charcot-Marie-Tooth disease, is directly regulated by the transcription factor SOX10[END_REF][START_REF] Girard | Sumoylation of the SOX10 transcription factor regulates its transcriptional activity[END_REF]. As far as competition assays are concerned, increasing amount of mutant SOX10 plasmids (0.150, 0.300 or 0.600 g) were mixed with a fixed amount of wild type SOX10 (0.150 g) and the reporter pGL3-Cx32 plasmid (0.150 g). DNA per well was kept constant by adding empty pECE vector.

Immunostaining

Cells were plated on 24-well plates and transfected 1 day after with 350 g of each SOX10 construct. Twenty-four hours after transfection, cultures were fixed in 4% PFA for 10 minutes at RT. After washing twice in PBS + 0.1% Triton X-100 (PBT), they were incubated with blocking solution (PBS + 1%BSA +0.15%glycine) at 4ºC overnight.

Primary antibodies were diluted in blocking solution as follows: SOX10-N20 (goat; Santa Cruz Biotechnology, Santa Cruz, CA) 1:50, c-Myc (mouse; BD Biosciences, Palo Alto, CA) 1:100. Incubation with primary antibody was performed at 4ºC overnight.

After several washes with blocking solution, secondary antibodies were added for 2 hours at RT at the following dilutions in blocking solution: anti-goat Alexa Fluor 568 (Invitrogen, Carlsbad, CA) 1:1/500, anti-mouse Alexa Flour 568 (Molecular Probes, Eugene, OR) 1:100. Cells were mounted in Vectashield medium containing DAPI (Vector Laboratories, Burlingame, CA) and fluorescence images were examined with a Leica DMR epifluorescence microscope. Alternatively Cells were counter stained with TO-PRO-3-iodide (Molecular Probes; 1:5000 in PBS), mounted using Vectashield without DAPI, and examined with Zeiss Axioplan 2 confocal microscope. Images were analysed using Metaphor software package.

Results

We have analysed the coding region of SOX10 in 196 HSCR patients, using dHPLC and QMF-PCR technology. We failed to detect any gene-dosage anomalies in our HSCR cases; however a total of 12 sequence variants were detected (Table 1). 10 out of 12 variants consisted on synonymous, intronic changes, or variants located in the untranslated regions of the gene. Because those variants generate no alteration at the protein sequence level, it was more probable that their pathogenic mechanism, if any, would affect transcript stability or RNA splicing. However, we found no evidences for those variants to produce any alteration of transcriptional and/or splicing processes when they were submitted to several Splice Sites and Transcription Factors Binding sequences prediction interfaces (http://www. fruitfly.org/seq_tools/splice.html; http://www.fruitfly.org/cgi-bin/seq_tools/promoter.html; http://www.ebi.ac.uk/asdsrv/wb.cgi).

The most interesting findings in the present study are two novel SOX10 mutations, c.112_131del and c.153-155del. Both of those heterozygous mutations cause a frameshift that alters the mRNA sequence generating a totally different protein sequence starting at position 38 and 52 respectively. In addition the mutations introduce premature termination codons at positions 58 and 108 respectively. As a result, both of those truncating proteins are lacking the HMG DNA binding domain, the two independent nuclear localization signals within this domain, and the C-terminal transactivating domain (Figure 1), essential for the protein function. One of the two mutations (c.112_131del) was detected, as a de novo event, in a female WS4 patient.

More interesting is the finding of the mutation c.153-155del in a male patient presenting with isolated short-segment HSCR. As long as this is the first report of a truncating SOX10 mutation in an isolated HSCR case, a more detailed inspection of the whole clinical data of the patient at the age of fifteen was fulfilled. This examination failed to detect any other phenotypic features such as pigmentary abnormalities, chronic intestinal pseudo-obstruction, microcornea, coloboma, nerve lesions, peripheral demyelinating neuropathy, or central dysmyelinating leukodystrophy associated with SOX10 mutations [START_REF] Verheij | Shah-Waardenburg syndrome and PCWH associated with SOX10 mutations: a case report and review of the literature[END_REF][START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF]. Heterochromia irides were also discarded as both eyes were brown. To rule out any slight lost of hearing in this patient with no auditory problems an auditory brainstem response was performed demonstrating no sensorineural deafness in this patient. Mutation c.153-155del was inherited from his unaffected mother. No additional point mutations were detected in this patient in other HSCR susceptibility genes; namely RET, GDNF, NRTN, PSPN, ARTN, EDNRB, EDN3, NTF3, NTRK3 or PHOX2B.

To test the functional consequences of the two mutations reported here, we first attempted to visualize the localization of the protein SOX10, wild-type (wt) and mutants (mt) within the cell. We introduced the two mutations independently into the SOX10 cDNA and performed immuno-fluorescence experiments on HeLa cells transiently transfected with wt and each of the mt construct. The results revealed aberrant localization of both mutant proteins into the cytoplasm, in contrast to wt protein located only in the nucleus (Figure 2). Due to the small protein size of the two mutants, and in order to avoid a possible misrecognition of the antibody used, we replicate the experiments using the myc-SOX construction and the same results were observed (Figure 2). Mutant proteins could be also localized in the nucleus, as it was expected due to small protein size. Proteins below 40 kDa are known to cross the nuclear pores complexes via passive diffusion [START_REF] Görlich | Nucleocytoplasmic transport[END_REF]. The molecular mass of our two mutant were predicted to be 5.76 and 10.67 kDa respectively by Compute pl/Mw tool Expasy (http://expasy.org/tools/pi_tool-ref.html), explaining the presence of the mutants in the nucleus. To confirm that the mutant proteins present in the nucleus were not functional, we analysed the transactivation capacity of both mutants on two promoters previously shown to contain monomeric or dimeric SOX10 binding sites, MITF and Cx32 respectively [START_REF] Bondurand | Interaction among SOX10, PAX3 and MITF, three genes altered in Waardenburg syndrome[END_REF][START_REF] Bondurand | Human Connexin 32, a gap junction protein altered in the X-linked form of Charcot-Marie-Tooth disease, is directly regulated by the transcription factor SOX10[END_REF]. Cotransfection of either promoter with wild-type, c.112_131del or c.153-155del SOX10 mutants and/or SOX10 cofactors (PAX3 and EGR2) revealed that both mutants failed to transactivate these reporter construct, alone or in synergy with the cofactors, as promoter activation was drastically reduced (Figure 3A,B). To determine the ability of SOX10 mutant proteins to interfere with wild-type SOX10 function, we also we carried out competition assays by co-transfecting mutant and wildtype SOX10 expressing vectors together with the pGL3-Cx32 reporter plasmid. As previously described, E189X mutant decreased the transcriptional activity of wild-type protein [START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF]) in a dose dependent manner. However, the two mutants reported here showed no such effect (Figure 3C).Their lack of dominant negative activity may explain why they are associated with a weaker phenotype.

Discussion

All the members of the Sox protein family contain a HMG box as their DNAbinding domain. This HMG box contains three -helical regions arranged in a twisted L shape for sequence-specific recognition, leading a large conformational change in the DNA. Two independent nuclear localization signals in the protein are located at the extremities of this DNA-binding domain [START_REF] Kuhlbrodt | Sox10, a novel transcriptional modulator in glial cells[END_REF]. SOX10 protein also includes a transactivation domain, a sequence of 113 amino acids in the carboxyl-terminal region, required for transcriptional activation [START_REF] Kuhlbrodt | Sox10, a novel transcriptional modulator in glial cells[END_REF]. Several in vitro studies have shown the functional consequences of different SOX10 mutations located all over its coding sequence, as no hot spots have been found for mutations at this locus [START_REF] Kuhlbrodt | Sox10, a novel transcriptional modulator in glial cells[END_REF][START_REF] Verheij | Shah-Waardenburg syndrome and PCWH associated with SOX10 mutations: a case report and review of the literature[END_REF][START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF][START_REF] Bondurand | A molecular analysis of the yemenite deaf-blind hypopigmentation syndrome: SOX10 dysfunction causes different neurocristopathies[END_REF][START_REF] Hilleren | Mechanisms of mRNA surveillance in eukaryotes[END_REF]. Most of nonsense mutations affecting the first few exons of the gene encode small aberrant mRNAs that are eliminated before translation, generating haploinsufficiency due to nonsense mediated decay of truncated mRNA, leading to WS4 phenotype [START_REF] Verheij | Shah-Waardenburg syndrome and PCWH associated with SOX10 mutations: a case report and review of the literature[END_REF][START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF][START_REF] Hilleren | Mechanisms of mRNA surveillance in eukaryotes[END_REF]. In contrast, mutations affecting the last exon, which encode the transactivation domain, escape this mechanism and show a dominant negative effect resulting in more severe PCWH phenotype [START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF]. However, the recent observation of whole SOX10 deletions in patients presenting with PCWH suggests that mechanisms other than NMD might explain phenotype variability [START_REF] Bondurand | Deletions at the SOX10 gene locus cause Waardenburg syndrome types 2 and 4[END_REF].

The two frameshift mutations reported here are lacking all functional domains, since wild-type sequence protein expands only to position 37 and 52 respectively. Our in vitro functional assays demonstrate not only that mutant proteins have an aberrant cytosolic localization, but also that transactivation and dominant negative activities are absent in the two mutants tested. Therefore, we propose haploinsufficiency as the most plausible mechanism leading to WS4 and isolated HSCR in the two respective patients.

The association between syndromic HSCR and SOX10 gene has been well established, since most of the patients harbouring heterozygous mutation at this locus present with HSCR as a part of their clinical features. In fact, very few patients with a mutation at SOX10 not presenting with HSCR, or other enteric phenotypes, have been reported [START_REF] Pingault | SOX10 mutations in patients with Waardenburg-Hirschsprung disease[END_REF][START_REF] Bondurand | Deletions at the SOX10 gene locus cause Waardenburg syndrome types 2 and 4[END_REF][START_REF] Bondurand | A molecular analysis of the yemenite deaf-blind hypopigmentation syndrome: SOX10 dysfunction causes different neurocristopathies[END_REF][START_REF] Pingault | SOX10 mutations in chronic intestinal pseudo-obstruction suggest a complex physiopathological mechanism[END_REF][START_REF] Touraine | Neurological phenotype in Waardenburg syndrome type 4 correlates with novel SOX10 truncating mutations and expression in developing brain[END_REF][START_REF] Sznajer | A de novo SOX10 mutation causing severe type 4 Waardenburg syndrome without Hirschsprung disease[END_REF], although SOX10 mutations show a wide phenotypic heterogeneity. Interestingly, for these patients with isolated WS features (WS2), tissuespecific compensation in the ENS by other SOX family proteins has been suggested, so that SOX10 mutations could only affect a certain portion of neural-crest-derived cells. Other genes, responsible for WS4 phenotype, have shown to produce HSCR phenotype alone, as it occurs in patients with heterozygous mutations in EDNRB and EDN3 genes (Svensson et al., 1999;Attie et al., 1995;Edery et al., 1996;Hofstra et al., 1996;Verheij et al., 2002). Nonetheless, no mutation at SOX10 gene has been found in an isolated HSCR patient until now. This finding suggests that SOX10 mutations responsible for central and peripheral myelin disorders without clinical features of WS or enteric alteration might be found in those patients despite the negative results found so far (Pigault et al., 2001). The c.153-155del mutation presented here is the first SOX10 mutation reported in an isolated HSCR patient without any other additional WS feature. It is difficult to explain how the mutation in this patient might affect the portion of neural-crest-derived cells colonizing the gut, responsible for ENS formation, and not other neural-crestderived tissues. The possibility for the patient to be a mosaic seems unlikely, as the mutation was inherited from his healthy mother, who shows no clinical features of WS or HSCR phenotypes after a careful anamnesis and detailed clinical examination. The lack of clinical symptoms for the mother could be explained by the sex-dependent penetrance of mutations generally observed in HSCR. Another possibility to explain this phenomenon could be a germline mosaicism for the mother, although the mother refused to be tested for that possibility, in any case this phenomenon would not explain the penetrance of her condition but rather affect the recurrence risk of the family.

The lack of symptoms suggestive of WS in the HSCR patient harbouring a SOX10 mutation might be also explained by the nature of the mutation itself. It was demonstrated that mutations leading to a truncation of SOX10 protein before the HMG domain rather than having a dominant negative effect, are functionally equivalent to a null mutation and generate haploinsufficiency in the cell [START_REF] Inoue | Molecular mechanism for distinct neurological phenotypes conveyed by allelic truncating mutations[END_REF]. These mutations tend to be correlated with milder HSCR and WS phenotypes, and this could be the case for the c.153-155del. Haploinsufficiency could be more dramatic in the ENS development than in other neural-crest derivatives (melanocytes of the skin or inner ear), in which the reduced amount of normal protein might be supplied by a redundant function in other members of SOX protein family with a differential expression pattern, such as SOX8, LSox5 or SOX22 [START_REF] Hong | Sox proteins and neural crest development[END_REF]. In fact, functional redundancy between SoxE group of genes (SOX8, SOX9 and SOX10) has been proposed. Moreover, loss of function of Sox8 gene in Sox10 heterozygous mouse embryos increases penetrance and severity of colon aganglionosis [START_REF] Maka | Identification of Sox8 as a modifier gene in a mouse model of Hirschsprung disease reveals underlying molecular defect[END_REF]. This is the first time that a SOX10 mutation do not give rise to any feature suggestive of WS, so that additional phenomena might be occurring in this patient to explain the distinct phenotype observed, such as an enhanced expression of the wild type allele in the non affected tissues. In addition, given that Hirschsprung disease is the paradigm of a complex and polygenic disease, we could also propose an involvement of other modifier genes still unidentified, that together with SOX10 would act to produce isolated enteric phenotype.

In summary, the most relevant result of our study has been the detection of a SOX10 mutation in a patient presenting with isolated HSCR, which points out the association of this gene with the pathogenesis of HSCR per se, not only as a part of a syndromic trait. This finding gives a new perspective of the SOX10 role in HSCR and constitutes a new step towards the dissection of the polygenic nature of this disease. Table 1. SOX10 sequence variants detected in the present study. Competition assays were performed by increasing amounts (1X, 2X and 4X) of mutant SOX10 expression plasmid (E189X, c.112_132del, and c.153-155del), that were mixed with a fixed amount of wild-type SOX10 expression plasmid and cotransfected with the GJB1 promoter luciferase reporter plasmid (C). Reporter-gene activations are presented as fold induction relative to the empty expression vector (pECE). Results represent the mean±SEM from three experiments, each performed in duplicate.

Tables

Figure 1 .

 1 Figure 1. SOX10 Protein. Representation of SOX10 protein with the transactivation domain and the HMG box, which shows the sequences for the two frameshift mutations found in a WS4 and isolated HSCR patients respectively.

Figure 2 .

 2 Figure 2. Subcellular localization of wild-type and mutant SOX10 proteins in transfected cells. SOX10 expression is detected in red and DAPI fluorescence reveals nuclei in blue in HeLa cells transfected with wild-type or mutant (c.112_132del and c.153-155del) Myc-SOX10 and SOX10 expression vectors.

Figure 3 .

 3 Figure 3. Transactivation capacity of wild-type and mutant SOX10 proteins. The MITF promoter (pMITF) (A) or the GJB1 (pCx32) promoter (B) luciferase reporters were transfected in Hela cells in combination with wild-type (WT) or mutant SOX10 proteins (c.112_132del, c.153-155del and E189X), and/or PAX3 (A) or EGR2 (B).

Acknowledgments

We would like to thank all the patients who participated in the study as well as their families for their collaboration. This study was funded by Fondo de Investigación Sanitaria, Spain (PI070080, and PI071315 for the E-Rare project) and Consejeria de Innovación Ciencia y Empresa (CTS 2590). The CIBER de Enfermedades Raras is an initiative of the ISCIII. ASM is predoctoral fellow founded by Instituto de Salud Carlos III, Spain.