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• A bedrock belief overturned: A widely used Internet encryption technique has been found to be cracked, heightening concerns over online-security.  The technique, called a "hash function," has been used for years by Website operators to scramble online transmissions of credit-card information, Social Security numbers and other sensitive data.  The system, involving an algorithm, or mathematical formula, was thought to be impenetrable.  But last month, a team of researchers from Shandong University in eastern China began circulating a draft of a paper showing that a key hash function used in state-of-the-art encryption could be less resistant to an attack by hackers than had been thought.  Hash functions generate digital fingerprints, or "hashes," of documents or data.  As with fingerprints, the uniqueness of the hash is what makes hash functions a great tool for verifying the authenticity of information.  But the Chinese team found different pieces of data that yielded the same hash when team members used a hash algorithm called SH-1 and their method generated the identical hash far more efficiently than experts thought possible.  SH-1 is a federal standard promulgated by the National Institute of Standards and Technology and used by the government and private sector for handling sensitive information.  It is believed to be the most widely used hash function and is regarded as the state of the art.

Cryptographers say exploiting the flaw for malicious purposes doesn't seem practical, even using a lot of computing power.  But if someone were to exploit the flaw, the most immediate threat would be to applications involving "authentication."

• Americans' pulse: Should companies be required to inform you immediately if your sensitive information has been lost or stolen?

• You are from California if 

(Part 4 of 7) 

Your car insurance costs as much as your

  house payment, 

Your hairdresser is straight, your plumber 

  is gay, the woman who delivers your mail 

  is into S&M, and your May Kay rep is a 

  guy in drag, and

You can't remember......Is pot legal?

• For more of the Generalist, please visit our website at ARKCPA.COM. 

• theGeneralist, a one-page monthly publication of the accounting firm of A. R. Kakhsaz Company, is in its 11th year of providing information, presented fairly and accurately, from sources we can depend upon and trust.

• A recent IRS ruling emphasizes that there is no right to a refund or a deduction for Social Security taxes paid based on arguments that a taxpayer has waived the right to receive Social Security benefits of has donated Social Security taxes or benefits to the government.

• Foreign investors purchased a net $91.5 billion in U.S. securities in January.  That's the largest amount since May 2003 and the second-largest ever.

• Lexus has been America's best-selling luxury-vehicle brand for the past five years, mainly because of the success of its RX 330 "crossover."  But when it comes to sedans and coupes, Lexus has lagged behind BMW.  But wait until new replacements come out for the eight-year-old GS sedan and one of my favorites, the sporty compact sedan IS 300.

• U.S. public schools per-pupil cost averaged over $8,000 in school year 2002-03.

• Russia offered to pay for plastic surgery, in addition to its $10 million reward, to disguise anyone willing to turn in the top Chechen warlord Basayev.

• There is a correlation between the amount of mercury pollution and the number of autism cases, found a study.

• IBM unveiled a service to send junk e-mail (or spam) back to the machine that generated it.  This approach, in effect, counterattacks the spammer.  Isn't that cool?

• Linguists and longtime watchers of President George W. Bush say that he has much improved his accent, pronunciation of words and his English language altogether.  That's truly admirable.  Remember, he once said: "By the way, when the President says something, you better mean it."

• We see more in numbers than just numbers...

Ali R. Kakhsaz, CPA, MAcc

www.arkpca.com