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66-511: The American Institute of Certified Public Accountants has issued guidance to accountants and auditors since 1917, when, at the behest of the U.S. Federal Trade Commission and auspices of the Federal Reserve Board , it issued a series of pamphlets to the accounting community in regard to preparing financial statements and auditing (then referred to as "verification" and later "examination"). Verification of Financial Statements ,

132-448: A commission, board, or similar collegial body consisting of five to seven members who share power over the agency. (This is why many independent agencies include the word "Commission" or "Board" in their name.) The president appoints the commissioners or board members , subject to Senate confirmation, but they often serve terms that are staggered and longer than a four-year presidential term, meaning that most presidents will not have

198-432: A draft proposal (called an "exposure draft") or the final version to the public with two-thirds of ASB members in favor. The voting results are included in the meeting highlights published, and any ASB member who dissents from issuing a pronouncement may request that the reasons for dissenting be included in the exposure draft or final pronouncement. Federal Trade Commission The Federal Trade Commission ( FTC )

264-581: A driver of inflation for grocery prices. In August 2024, it announced it would be probing grocery prices to look for anti-competitive behavior and price gouging at chain supermarkets. In 2023, the FTC proposed a new rule that would ensure that the cancellation process of subscription services is as easy as the process of signing up. On October 16, 2024, the FTC announced the new rule, dubbed "click to cancel", requiring companies to make subscription services "as easy for consumers to cancel their enrollment as it

330-450: A fact that was only disclosed in legalese, buried within the end user license agreement. The FTC secured a consent decree in the case. In In re Gateway Learning Corp. the FTC alleged that Gateway committed unfair and deceptive trade practices by making retroactive changes to its privacy policy without informing customers and by violating its own privacy policy by selling customer information when it had said it would not. Gateway settled

396-480: A fine of US$ 50.1 million on OMICS companies. OMICS' lawyer said that this was an unfair allegation and that OMICS would sue FTC for $ 3.11 billion in damages, saying it had caused loss of revenue and reputation. In In the Matter of Sears Holdings Management Corp. , the FTC alleged that a research software program provided by Sears was deceptive because it collected information about nearly all online behavior,

462-526: A narrower sense, the term independent agency refers only to these independent regulatory agencies that, while considered part of the executive branch, have rulemaking authority and are insulated from presidential control, usually because the president's power to dismiss the agency head or a member is limited. Independent agencies can be distinguished from the federal executive departments and other executive agencies by their structural and functional characteristics. Their officers can be protected from removal by

528-595: A number of regulations (codified in Title 16 of the Code of Federal Regulations ). The broad statutory authority granted to the FTC provides it with more surveillance and monitoring abilities than it actually uses. The FTC is composed of five commissioners, who each serve seven-year terms. Members of the commission are nominated by the President and subject to Senate confirmation, and no more than three FTC members can be of

594-705: A report, among others. The Sarbanes–Oxley Act of 2002, as amended by the Dodd–Frank Act, changed the hierarchy of generally accepted auditing principles and standards. The legislation established that the new Public Company Accounting Oversight Board (PCAOB) and the Securities Exchange Commission (SEC) now had final authority over auditing regulation and public-auditor professional-practices standards for audits of public companies , also referred to as "issuers". Public accountants and firms who audit public companies were required to register with

660-578: A review of the price lists, on-site training of the staff, and follow-up testing and certification on compliance with the Funeral Rule ." In the mid-1990s, the FTC launched the fraud sweeps concept where the agency and its federal, state, and local partners filed simultaneous legal actions against multiple telemarketing fraud targets. The first sweeps operation was Project Telesweep in July 1995 which cracked down on 100 business opportunity scams. In

726-736: A total of 23 SAS. In October 1978, following extensive studies by the AICPA and its sub-committees, its governing council established the Auditing Standards Board as the maximum authoritative body in establishing GAAS, thereby consolidating and replacing all previous senior technical committees. It required all AICPA members and public accountants to adhere to the ASB’s pronouncements in relation to audit, attestation, and quality control. The ASB would now define auditor responsibilities and provide guidance to allow them to accomplish work and emit

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792-680: Is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection . The FTC shares jurisdiction over federal civil antitrust law enforcement with the Department of Justice Antitrust Division . The agency is headquartered in the Federal Trade Commission Building in Washington, DC . The FTC

858-695: Is responsible for the United States National Do Not Call Registry . Independent agencies of the United States government [REDACTED] [REDACTED] In the United States government , independent agencies are agencies that exist outside the federal executive departments (those headed by a Cabinet secretary) and the Executive Office of the President . In a narrower sense,

924-677: Is to be denied a written, retainable copy of the GPL. In 1996, the FTC instituted the Funeral Rule Offenders Program (FROP), under which "funeral homes make a voluntary payment to the U.S. Treasury or appropriate state fund for an amount less than what would likely be sought if the Commission authorized filing a lawsuit for civil penalties. In addition, the funeral homes participate in the NFDA compliance program, which includes

990-908: The Securities and Exchange Commission , the Federal Reserve , the Commodity Futures Trading Commission , the Federal Deposit Insurance Corporation , and the Consumer Financial Protection Bureau . Generally, the heads of independent regulatory agencies can only be removed for cause, but Cabinet members and heads of independent executive agencies, such as the head of the Environmental Protection Agency , serve "at

1056-412: The funeral home industry in order to protect consumers from deceptive practices. The FTC Funeral Rule requires funeral homes to provide all customers (and potential customers) with a General Price List (GPL), specifically outlining goods and services in the funeral industry, as defined by the FTC, and a listing of their prices. By law, the GPL must be presented on request to all individuals, and no one

1122-628: The 2021 United States Supreme Court case, AMG Capital Management, LLC v. FTC , the Court found unanimously that the FTC did not have power under 15 U.S.C.   § 53(b) of the FTC Act, amended in 1973, to seek equitable relief in courts; it had the power to seek only injunctive relief. In 2023, Project 2025 suggested that an administration could abolish the FTC. In November 2024, U.S. District Judge Amit Mehta agreed with Assistant Attorney General Jonathan Kanter and FTC Chair Khan, ruling

1188-584: The AICPA implemented significant changes to its standard-setting practices by consolidating all auditing pronouncements up to that date under Statements on Auditing Standards (SAS), and gave the Committee the title of senior technical committee on auditing matters while changing its name to Auditing Standards Executive Committee. From 1972 through 1978 the Executive Committee issued SAS as the authoritative guidelines and rules for auditing, issuing

1254-657: The Bureau of Competition, the Bureau of Consumer Protection, and the Bureau of Economics. The Bureau of Competition is the division of the FTC charged with elimination and prevention of "anticompetitive" business practices. It accomplishes this through the enforcement of antitrust laws, review of proposed mergers , and investigation into other non-merger business practices that may impair competition. Such non-merger practices include horizontal restraints, involving agreements between direct competitors, and vertical restraints , involving agreements among businesses at different levels in

1320-489: The Director. To assure that the different industries and sectors are represented, the AICPA has reserved nominations for different industry segments as part of its operating policies: Board members serve a one-year term, after which they are evaluated by the AICPA for their performance, and can then be re-appointed for up to 3 one-year terms, or dismissed by the AICPA. The AICPA may extend the term of service if, for example,

1386-637: The FTC authorized an administrative complaint against the merger between Microsoft and Activision Blizzard , Inc. The FTC alleged the deal would suppress competitors from accessing future content/games developed by Activision once the deal goes through. The FTC dropped its lawsuit on July 20, 2023. Microsoft had to restructure its deal to appease UK regulators. Microsoft reneged on promises it made in court filings by laying off 1900 employees in January 2024, signaling that it did not plan to let Activision Blizzard remain as independent as it had promised and leading

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1452-517: The FTC sued Meta (formally known as Facebook) for anticompetitive conduct under Section 2 of the Sherman Act , which prohibits improper monopolization of a market. The FTC accused Meta of buying up its competitors to stifle competition which reduced the range of services available to consumers and by creating fewer social media platforms for advertisers to target. In September 2013, a federal court closed an elusive business opportunity scheme on

1518-555: The FTC to continue to appeal the decision. In July 2021, the FTC voted unanimously to enforce the right to repair as policy and to look to take action against companies that limit the type of repair work that can be done at independent repair shops. In October 2024, following a comment by the FTC to the US Copyright Office , an exemption was granted allowing for repair of retail-level food preparation equipment, such as McDonald's ice cream machines . In December 2020

1584-597: The FTC's success in blocking or unwinding of hospital consolidations or affiliations: In 2011, the FTC successfully challenged in court the $ 195 million acquisition of Palmyra Medical Center by Phoebe Putney Memorial Hospital. The FTC alleged that the transaction would create a monopoly as it would "reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, substantially harming patients and local employers and employees". The Supreme Court on February 19, 2013, ruled in favor of

1650-469: The FTC. Similarly, court attempts by ProMedica health system in Ohio to overturn an order by the FTC to the company to unwind its 2010 acquisition of St. Luke's hospital were unsuccessful. The FTC claimed that the acquisition would hurt consumers through higher premiums because insurance companies would be required to pay more. In December 2011, an administrative judge upheld the FTC's decision, noting that

1716-408: The FTC. They were banned from processing credit card transactions, though the initial monetary judgment of $ 5.8 million was suspended due to the defendant's inability to pay. In 2016, the FTC launched action against the academic journal publisher OMICS Publishing Group for producing predatory journals and organizing predatory conferences . This action, partly in response to ongoing pressure from

1782-570: The PCAOB and follow all standards, principles, rules, and interpretations issued by the PCAOB in regard to public company audits and audit reports , as well as attestation and quality control. The PCAOB adopted the ASB's auditing and attest standards as its temporary auditing rules in 2003. The AICPA subsequently changed the designation of the leading GAAS-setting authority in February 2004. It designated

1848-611: The PCAOB as the authoritative body for GAAS related to public companies, while the ASB was designated for non-public companies. The Auditing Standards Board consists of 19 members (see table for current Board members), each nominated by the Director of the AICPA Audit and Attest Standards Staff and approved by the AICPA Board of Directors. The Board has a Chairman to direct Board meetings and to establish procedures, sub-committees, and perform other similar tasks in conjunction with

1914-547: The Rockford area and would have a market share of 64%. Later in 2012, OSF announced that it had abandoned its plans to acquire Rockford Health System. The commission is headed by five commissioners, who each serve seven-year terms. Commissioners are nominated by the president and confirmed by the Senate . No more than three commissioners can be of the same political party . In practice, this means that two commissioners are of

1980-601: The Securities Exchange Commission required public accountants to include a representation in their independent audit reports that the audit was performed in compliance with generally accepted auditing standards, and the Committee issued a booklet titled Generally Accepted Auditing Standards—Their Significance and Scope to adopt the SEC’s requirement. In 1963, the Committee issued Statement on Auditing Procedure No. 33 to consolidate and replace various pronouncements issued between 1949 and 1963, including pamphlets and statements. In 1972,

2046-849: The academic community, is the first action taken by the FTC against an academic journal publisher. The complaint alleges that the defendants have been "deceiving academics and researchers about the nature of its publications and hiding publication fees ranging from hundreds to thousands of dollars". It additionally notes that "OMICS regularly advertises conferences featuring academic experts who were never scheduled to appear in order to attract registrants" and that attendees "spend hundreds or thousands of dollars on registration fees and travel costs to attend these scientific conferences." Manuscripts are also sometimes held hostage, with OMICS refusing to allow submissions to be withdrawn and thereby preventing resubmission to another journal for consideration. Library scientist Jeffrey Beall has described OMICS as among

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2112-553: The agency also alleged that the companies created a rebate system that prioritized high rebates from drug manufacturers, among other factors. The agency stated that several PBMs failed to provide documents in a timely manner and warned that it could take the companies to court to force them to comply, during the announcment in the preliminary findings. In September 2024, the FTC sued the three largest pharmacy benefit managers (PBMs) for allegedly engaging in anti-competitive practices that increased their profits while artificially inflating

2178-473: The agency requested documents from the six largest PBMs as part of its investigation. The three largest – UnitedHealth Group's OptumRx , Cigna's Express Scripts and CVS Health's Caremark – manage about 80% of U.S. prescriptions. The top three PBMs share a parent company with a large medical insurance company . The FTC accused these companies of raising drug prices through conflicts of interest , vertical integration , concentration, and exclusivity provisions;

2244-459: The behavior of ProMedica health system and St. Luke's was indeed anticompetitive. The court ordered ProMedica to divest St. Luke's to a buyer that would be approved by the FTC within 180 days of the date of the order. In November 2011, the FTC filed a lawsuit alleging that the proposed acquisition of Rockford by OSF would drive up prices for general acute-care inpatient services as OSF would face only one competitor (SwedishAmerican health system) in

2310-488: The biggest pay raises. It also allows workers to leave abusive work environments and can prevent some doctors from having to leave medicine once they leave a practice. The ban was put on hold by U.S. District Judge Ada Brown on July 3, 2024, but then upheld on appeal by U.S. District Judge Kelley B. Hodge on July 23, 2024. On August 20, 2024, a federal court in Texas overturned the FTC's ban on non-compete agreements, which

2376-613: The commissioners – the Appointments Clause of the Constitution vests that power in the president. The Senate does participate, however, in appointments through " advice and consent ", which occurs through confirmation hearings and votes on the president's nominees. These agencies are not represented in the cabinet and are not part of the Executive Office of the president: Although not officially part of

2442-491: The company a monopoly, and ordering Google to sell its Chrome web browser. The FTC ruled to ban virtually all non-competes nationwide in April 2024. The agency estimates 30 million workers are bound by these clauses and only excludes senior executives from the ban on enforcing non-competes. The agency believes that this will allow workers to find better working conditions and pay, since switching companies, on average, provides

2508-542: The complaint by entering into a consent decree with the FTC that required it to surrender some profits and placed restrictions upon Gateway for the following 20 years. In addition to prospective analysis of the effects of mergers and acquisitions, the FTC has recently resorted to retrospective analysis and monitoring of consolidated hospitals. Thus, it also uses retroactive data to demonstrate that some hospital mergers and acquisitions are hurting consumers, particularly in terms of higher prices. Here are some recent examples of

2574-597: The courts. With the 1912 presidential election decided in favor of the Democrats and Woodrow Wilson , Morgan reintroduced a slightly amended version of his bill during the April 1913 special session. The national debate culminated in Wilson's signing of the FTC Act on September 26, 1914, with additional tightening of regulations in the Clayton Antitrust Act three weeks later. The new FTC would absorb

2640-412: The defendants from falsely representing that their journals engage in peer review, that their journals are included in any academic journal indexing service or any measurement of the extent to which their journals are cited. It also requires that the defendants clearly and conspicuously disclose all costs associated with submitting or publishing articles in their journals." In April 2019, the court imposed

2706-580: The first pamphlet dedicated exclusively to providing guidance for audits, was issued in 1929. With its opening paragraph, the guidance provided one of the most fundamental principles in auditing, stating that "the responsibility for the extent of the (audit) work required must be assumed by the auditor." In 1936 the AICPA revised its prior pronouncements and issued Examination of Financial Statements by Independent Public Accountants , which contained more detailed guidance on performing audit procedures for audits of small and mid-sized companies, while still emphasizing

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2772-498: The first speech on the House floor advocating its creation on February 21, 1912. Though the initial bill did not pass, the questions of trusts and antitrust dominated the 1912 election. Most political party platforms in 1912 endorsed the establishment of a federal trade commission with its regulatory powers placed in the hands of an administrative board, as an alternative to functions previously and necessarily exercised so slowly through

2838-651: The goals the agency must work towards, as well as what substantive areas, if any, over which it may have the power of rulemaking. These agency rules (or regulations), when in force, have the power of federal law. Independent agencies exist outside the federal executive departments (those headed by a Cabinet secretary) and the Executive Office of the President. There is a further distinction between independent executive agencies and independent regulatory agencies, which have been assigned rulemaking responsibilities or authorities by Congress. The Paperwork Reduction Act lists 19 enumerated "independent regulatory agencies", such as

2904-415: The governing statute, but the functional differences have more legal significance. In reality, the high turnover rate among these commissioners or board members means that most presidents have the opportunity to fill enough vacancies to constitute a voting majority on each independent agency commission within the first two years of the first term as president. In some famous instances, presidents have found

2970-712: The independent agencies more loyal and in lockstep with the president's wishes and policy objectives than some dissenters among the executive agency political appointments . Although Congress can pass statutes limiting the circumstances under which the president can remove commissioners of independent agencies, if the independent agency exercises any executive powers like enforcement, and most of them do, Congress cannot reserve removal power over executive officers to itself. Constitutionally, Congress can only remove officers through impeachment proceedings. Members of Congress cannot serve as commissioners on independent agencies that have executive powers, nor can Congress itself appoint

3036-530: The list price of insulin. The agency is seeking to prohibit the PBMs from favoring medicines because certain pharaceuticals make them more money. In February 2024, the FTC challenged the Kroger-Albertsons merger , arguing it would drive up grocery and pharmacy prices, worsen service, and lower wages and working conditions. In March 2024, the FTC released a report that found higher profit margins as

3102-585: The member is working on a long-term project and the AICPA believes that such participation is crucial for the completion of the project. ASB proposed pronouncements are discussed within the ASB membership, the AICPA and with the general public. The ASB meets periodically to discuss auditing issues and prepare and draft pronouncement proposals, and occasionally holds public hearings. The meetings are considered informal (no set of formal rules) to encourage open deliberation between its members,. Matters which affect public interest, such as proposals of new SAS, are open to

3168-513: The most egregious of predatory publishers . In November 2017, a federal court in the Court for the District of Nevada granted a preliminary injunction that: "prohibits the defendants from making misrepresentations regarding their academic journals and conferences, including that specific persons are editors of their journals or have agreed to participate in their conferences. It also prohibits

3234-454: The need to perform the audit based on the nature of the client, its size, and its internal control structure, among other attributes. On January 30, 1939, the Committee on Auditing Procedure was formed by the AICPA to evaluate, discuss, and issue guidance exclusively on auditing-related matters. This Committee is considered the antecessor of the Auditing Standards Board, and was the first to issue Statements on auditing standards and principles to

3300-442: The opportunity to appoint all the commissioners of a given independent agency. In addition, most independent agencies have a statutory requirement of bipartisan membership on the commission, so the president cannot simply fill vacancies with members of his own political party. The president can normally designate which commissioner will serve as the chairperson. Congress can designate certain agencies explicitly as "independent" in

3366-450: The opposition party. However, three members of the FTC throughout its history have been without party affiliation , with the most recent independent, Pamela Jones Harbour , serving from 2003 to 2009. (chair) Yale Law School ( JD ) Yale Law School (JD) Yale Law School (JD) University of Utah Law School (JD) University of Virginia School of Law (JD) Notes As of 2021, there have been: The FTC has three main bureaus:

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3432-419: The pleasure of the president" and can be removed without cause. The degree to which the President has the power to use executive orders to set policy for independent executive agencies is disputed. Many orders specifically exempt independent agencies, but some do not. Executive Order 12866 has been a particular matter of controversy; it requires cost-benefit analysis for certain regulatory actions. In

3498-483: The power to remove officials from agencies that were "an arm or an eye of the executive", it upheld statutory limitations on the president's power to remove officers of administrative bodies that performed quasi-legislative or quasi-judicial functions, such as the Federal Trade Commission. Presidents normally do have the authority to remove regular executive agency heads at will , but they must meet

3564-466: The president, they can be controlled by a board that cannot be appointed all at once, and the board can be required to be bipartisan. Presidential attempts to remove independent agency officials have generated most of the important Supreme Court legal opinions in this area. In 1935, the Supreme Court in the case of Humphrey's Executor v. United States decided that although the president had

3630-440: The public accounting community. In 1941 it issued a pamphlet titled Statements on Auditing Procedure , which discussed the auditor’s responsibility in applying judgment in audits. It was followed by a series of numbered pronouncements called Statements on Auditing Procedures , or SAP (the antecessors of Statements on Auditing Standards), issued between 1939 up to the early 1970s for a total of 54 SAP pronouncements. During that time,

3696-548: The public. The meetings and hearings are established by the ASB Chair, with public notices and meeting highlights and summaries printed in The CPA Letter , and on the AICPA website. A quorum comprises the majority of ASB members or their representatives, and other members of the AICPA are usually invited also. Proposed pronouncements are discussed in the ASB meetings, and the board members must vote before to issuing

3762-647: The request of the FTC, namely "Money Now Funding"/"Cash4Businesses". The FTC alleged that the defendants misrepresented potential earnings, violated the National Do Not Call Register , and violated the FTC's Business Opportunity Rule in preventing a fair consumer evaluation of the business. This was one of the first definitive actions taken by any regulator against a company engaging in transaction laundering, where almost US$ 6 million were processed illicitly. In December 2018, two defendants, Nikolas Mihilli and Dynasty Merchants, LLC, settled with

3828-489: The same party . One member of the body serves as FTC Chair at the President's pleasure, with Commissioner Lina Khan having served as chair since June 2021. Following the Supreme Court decisions against Standard Oil and American Tobacco in May 1911, the first version of a bill to establish a commission to regulate interstate trade was introduced on January 25, 1912, by Oklahoma congressman Dick Thompson Morgan . He would make

3894-611: The same industry (such as suppliers and commercial buyers). The FTC shares enforcement of antitrust laws with the Department of Justice . However, while the FTC is responsible for civil enforcement of antitrust laws, the Antitrust Division of the Department of Justice has the power to bring both civil and criminal action in antitrust matters. The Bureau of Consumer Protection's mandate is to protect consumers against unfair or deceptive acts or practices in commerce. With

3960-467: The staff and duties of Bureau of Corporations , previously established under the Department of Commerce and Labor in 1903. The FTC could additionally challenge "unfair methods of competition" and enforce the Clayton Act's more specific prohibitions against certain price discrimination, vertical arrangements, interlocking directorates , and stock acquisitions. In 1984, the FTC began to regulate

4026-409: The statutory requirements for removal of commissioners of independent agencies, such as demonstrating incapacity, neglect of duty , malfeasance , or other good cause . While most executive agencies have a single director, administrator, or secretary appointed by the president of the United States , independent agencies (in the narrower sense of being outside presidential control) almost always have

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4092-402: The term refers only to those independent agencies that, while considered part of the executive branch , have regulatory or rulemaking authority and are insulated from presidential control, usually because the president's power to dismiss the agency head or a member is limited. Established through separate statutes passed by Congress , each respective statutory grant of authority defines

4158-420: The written consent of the commission, Bureau attorneys enforce federal laws related to consumer affairs and rules promulgated by the FTC. Its functions include investigations, enforcement actions, and consumer and business education. Areas of principal concern for this bureau are: advertising and marketing, financial products and practices, telemarketing fraud , privacy and identity protection, etc. The bureau also

4224-598: Was established in 1914 with the passage of the Federal Trade Commission Act , signed in response to the 19th-century monopolistic trust crisis. Since its inception, the FTC has enforced the provisions of the Clayton Act , a key antitrust statute, as well as the provisions of the FTC Act, 15 U.S.C.   § 41 et seq. Over time, the FTC has been delegated with the enforcement of additional business regulation statutes and has promulgated

4290-741: Was originally scheduled to take effect on September 4, 2024. U.S. District Judge Ada Brown said the FTC did not have the authority to issue the ban, which she said was "unreasonably overbroad without a reasonable explanation." Victoria Graham, an FTC spokeswoman responded to the ruling by stating "We are seriously considering a potential appeal..." The FTC successfully blocked Nvidia from purchasing ARM holdings in 2022. The FTC has pursued lawsuits against companies to lower drug prices, including for insulin and for inhalers. The FTC launched its investigation into pharmacy benefit managers (PBMs) in 2022. In July 2024, it released an interim report on its 2-year investigation into pharmacy benefit managers ,

4356-468: Was to sign up." Khan said in a interview that the new rule is designed so that if consumers signed up online, they must also be able to cancel on the same website in the same number of steps. The rule’s final provisions will go into effect 180 days after it is published in the Federal Register . It also targeted airlines and credit card companies over junk fees and high prices. In 2023,

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