Since the 1960s, a growing number of people have been moving away from Essay - 2

Since the 1960s, a growing number of people have been moving away from villages and small towns to big cities in both developed - Essay Example In â€Å"The Root Causes of Migration† published by Maryland Catholic Conference, it illustrates the different and various reasons or purposes for moving permanently to the bigger cities. The most common reason is usually based on economics and financial matters. In the area of social science, there is a certain law which describes the different causes or factors for the occurrence of migration. Called Lee’s laws, it separates and breaks up the different factors into two sections called the push and the pull factors. The push factors are the different causes that influence and make people want to move away and be pushed out of an area. The people from the rural areas suffer from the lack of job opportunities, bad and awful environmental conditions such as pollution and being prone to natural disasters like fire, drought, flood, landslides, social unfairness such as bullying, teasing, racism, discrimination and even religious persecution. Other pull factors include loss of wealth, poor housing and conflicts or wars around the area. The pull factors are the opposite. They are the various reasons that attract people and pull them into an area. The most common reason for people to move into an area from rural areas is for better job opportunities. In the third chapter of â€Å"People on the Move,† there are also other reasons and purposes why people are attracted to settle permanently in amore urbanized location rather than staying in the rural parts of the country. Some of these are better living conditions. This mostly talks about the environmental conditions such as being less prone to environmental problems and natural disasters. Education is also one of the common reasons. During these modern times, people now highly value the quality of education that one gets because this is the gateway not only for their financial success in life, but also for their family’s freedom from poverty and financial struggles. In both developing and dev eloped nations, migration is being done and the numbers are getting higher and higher every year. The Philippines, which is a developing country in Southeast Asia, is experiencing such an increase in the number of migrants who came from the rural areas that are flocking to the most urbanized region in the country, the capital, Metro Manila. People in this country are getting poorer and poorer everyday and it is clearly evident. That is the reason why most of the people grab the chance and go to Metro Manila, which gives them a hope of a better opportunity and chance in finding good jobs that will somehow and in some way improve the financial status of their families. The intelligent, the skilled and the talented leave the provinces where they live in order to get better chances at life. This great migration that is currently happening in the Philippines has impacted and greatly influenced the development of the country. There are numerous effects that this migration has caused. When all of the brilliant and bright move and gather at one urban area such as in Manila, the provinces and the small towns and rural areas are left undeveloped and from slow, they become slower and slower. It is seen that in certain towns and municipalities, whatever it looked like a decade ago, it still looks the same until now because development is very slow in these areas. Additionally, in developing countries, once people

Position paper Lobbyists Research Example | Topics and Well Written Essays - 750 words

Position Lobbyists - Research Paper Example Efficiency and competence of his policy is a disputed issue because one group favors his economic policy specifically for inflation, while another group critically claim his policies as useless for the governmental system in the US. In this paper, we shall discuss the perceptions of two lobbyists, one in favor in and another one against the Reagans policies. The first lobbyist supported the economic decision of the inspiring president (including reduction in social and domestic marketing spending, with the increase in military spending) and emphasized on income tax reduction. Being an optimistic lobbyist, I believe that Reagans policies were appropriate with respect to the situations of the United States, where inflation has been badly influencing each aspect of citizens lives. Inflation victims were suffering from severe financial crisis along with the entire administrative system of the US (Alan & Davis, 2004). Additionally, his economic policies seem to be implemented with trust in the kindness of human nature especially at the corporate level. In the United States, it seems as if everyone is running fast to earn bread and butter and regulate other life processes (Magazzino, 2010). Major reason behind an Americans hurdle is that to handle tax and other needs together. Reduction is tax worked as an important beneficial change in the r egulation system that made citizens to pay only 28% rather than 70% in taxes. Further, lobbyist pinpointed that tax reduction will result in more financial advantages, and moneymaking chances will increase (Magazzino, 2012). Eventually, businesses will flourish and new employment opportunities facilitate new professionals to gain money and fame in the growing sectors. On the other hand, second lobbyist presents his arguments against Reagans policies that also included reduction in government spending and money supply intended to control inflation. Being an honest citizen and lobbyist I believe that a presidents policies

Since the 1960s, a growing number of people have been moving away from Essay - 2

Since the 1960s, a growing number of people have been moving away from villages and small towns to big cities in both developed - Essay Example In â€Å"The Root Causes of Migration† published by Maryland Catholic Conference, it illustrates the different and various reasons or purposes for moving permanently to the bigger cities. The most common reason is usually based on economics and financial matters. In the area of social science, there is a certain law which describes the different causes or factors for the occurrence of migration. Called Lee’s laws, it separates and breaks up the different factors into two sections called the push and the pull factors. The push factors are the different causes that influence and make people want to move away and be pushed out of an area. The people from the rural areas suffer from the lack of job opportunities, bad and awful environmental conditions such as pollution and being prone to natural disasters like fire, drought, flood, landslides, social unfairness such as bullying, teasing, racism, discrimination and even religious persecution. Other pull factors include loss of wealth, poor housing and conflicts or wars around the area. The pull factors are the opposite. They are the various reasons that attract people and pull them into an area. The most common reason for people to move into an area from rural areas is for better job opportunities. In the third chapter of â€Å"People on the Move,† there are also other reasons and purposes why people are attracted to settle permanently in amore urbanized location rather than staying in the rural parts of the country. Some of these are better living conditions. This mostly talks about the environmental conditions such as being less prone to environmental problems and natural disasters. Education is also one of the common reasons. During these modern times, people now highly value the quality of education that one gets because this is the gateway not only for their financial success in life, but also for their family’s freedom from poverty and financial struggles. In both developing and dev eloped nations, migration is being done and the numbers are getting higher and higher every year. The Philippines, which is a developing country in Southeast Asia, is experiencing such an increase in the number of migrants who came from the rural areas that are flocking to the most urbanized region in the country, the capital, Metro Manila. People in this country are getting poorer and poorer everyday and it is clearly evident. That is the reason why most of the people grab the chance and go to Metro Manila, which gives them a hope of a better opportunity and chance in finding good jobs that will somehow and in some way improve the financial status of their families. The intelligent, the skilled and the talented leave the provinces where they live in order to get better chances at life. This great migration that is currently happening in the Philippines has impacted and greatly influenced the development of the country. There are numerous effects that this migration has caused. When all of the brilliant and bright move and gather at one urban area such as in Manila, the provinces and the small towns and rural areas are left undeveloped and from slow, they become slower and slower. It is seen that in certain towns and municipalities, whatever it looked like a decade ago, it still looks the same until now because development is very slow in these areas. Additionally, in developing countries, once people

Sarbanes Oxley Act Of 2002 Accounting Essay

Sarbanes Oxley Act Of 2002 Accounting Essay The purpose of this report is to present the Sarbanes-Oxley Act, starting from the history of self-regulation and its regulatory bodies, presenting the governance scandals which triggered the Acts creation, emphasizing the requirements of Section 404 and concluding on recent crises. The history of self-regulation in the United States is structured in two parts: (1) Early Standards, including the Acts of 1933 and 1934, GAAS and GAAP, with short focus on peer review, and After seventy years of self-regulation many accounting frauds, governance scandals and bankruptcies shacked the U.S. market. Due to their relevance and impact on regulatory standards the cases of Enron and WorldCom were chosen to be discussed. After enacting the Sarbanes-Oxley Act of 2002, the U.S. Congress started a new era, by choosing to enforce a new independent body (PCAOB) to monitor the auditing companies. In relation with SOX the followings were considered: (1) SOXs summary, with its objectives and main sections, (2) Public Company Accounting Oversight Board (PCAOB), with its mission and enforced authority. Next, the analysis focused on the section 404 of SOX 2002 because is the provision which caused the most violent discussions from executives part. Due to the section impact on companies financial statements the report includes a short presentation of its rules with a larger analysis of implementation costs and benefits. Still, even if the SOX and the SEC regulated the market in order to protect the investors and to avoid future corporate frauds, the financial crisis revealed new scandals, out of which in this report are mentioned: (1) Bernard Madoffs Ponzi scheme, and (2) Bank of America Corporations lack of disclosure related to Merrill Lynch merger. Taking into consideration these scandals, changes of regulations must be considered for the future and, maybe, reconsiderations of auditors role as management strategic advisors. HISTORY OF SELF REGULATION IN USA I.1. Early Standards In the United States, at the beginning of the 20th century, the regulations for accounting and auditing were the same as United Kingdom regulations due to the fact that the major American corporations were branches of Britain companies (Benston G., et al., 2006). Still, the market experienced a low level of regulation (or almost absent), the succeeding events (stock market crash in 1929 and depression from 1930) indicating a strong need for regulating and disclosing policies to be established by the federal government. Securities Act of 1933 and Securities Exchange Act of 1934. The historical foundation for regulations of financial disclosure by corporations is considered to be the moment when, immediately after the market crash from 1929, the U.S. Congress enacted two major laws, the Securities Act of 1933 and the Securities Exchange Act of 1934. For the first time in history, those two rules contained pragmatic provisions regarding corporate investors and financial disclosure: Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing. People who sell and trade securities brokers, dealers, and exchanges must treat investors fairly and honestly, putting investors interests first.  [1]   GAAS. Starting with 1939, the first generally accepted auditing standards (GAAS) were drafted and adopted by the American Institute of Accountants (currently AICPA), through its Auditing Standard Executive Committee (AudSEC) (currently Auditing Standards Board). Because GAAS refers to risks assessment and ways to mitigate them, three areas of provisions were defined (Benston G., et al., 2006): (1) general standards for determining the auditors personal traits; (2) fieldwork standards for setting the audit analysis, evaluation of internal controls and audit evidences; (3) reporting standards for assessing the disclosures of financial statements and the audit opinions, respectively the application of GAAS to GAAP. GAAP. Starting with 1936-1938, the SEC entrusted the Committee on Accounting Procedure (part of AICPA) to issue a private-sector accounting standards in order to set-up an accounting system requested by the market needs. The first generally accepted accounting principles (GAAP) were developed in its initial form of Accounting Research Bulletins (ARB). Peer Review. In the early 1960s, the major consulting accounting companies started to form peer reviews for a better quality of accounting, auditing and attestation services performed by AICPA members  [2]  . This means that every CPA firm must be reviewed by another CPA firm. The latest company must independent from the reviewed company and must have qualified experience. The supervision of the peer review activities is assured by the Public Oversight Board (POB), an independent private sector body  [3]  , which, even if was created by SECPS members, is independent from the profession and the regulatory process. I.2. Regulatory Bodies Securities and Exchange Commission (SEC). The US Congress, through Securities Exchange Act of 1934, established SEC as an independent agency, having as main duty to define technical, trade, accounting, and other terms used in securities market, in the United States. The Commission is responsible for (1) interpreting federal securities laws; (2) issuing new rules and revising existing rules; (3) supervising the examination of securities players (brokers, investments advisers, other agencies); (4) monitoring private regulatory organizations in the securities area; and (5) complying U.S. securities rules with other American and foreign authorities  [4]  . Currently, the SEC is administrating the most important laws that standardize the securities industry, laws which are: (1) Securities Act of 1933, (2) Securities Exchange Act of 1934, (3) Trust Indenture Act of 1939, (4) Investment Company Act of 1940, (5) Investment Advisers Act of 1940, (6) Sarbanes-Oxley Act of 2002. The authoritative power of SEC implies laws enforcement in cases of fraud, insider trading, and any other infringements done by the individuals and companies on the securities area. American Institute of Certified Public Accountants (AICPA). If all preceding associations (like the American Association of Public Accountants, the Institute of Public Accountants, the American Institute of Accountants) are taken into consideration, than it can be stated that AICPA dates from 1887  [5]  . Associating all the certified public accountants (CPAs) in the U.S., the AICPA is the main non-government authoritative body in developing auditing standards (including technical rules and ethical codes) and other regulating services for CPAs. Furthermore, it has the authority to monitor and to enforce the law in cases of non-compliance with the standards. Auditing Standards Board (ASB). Within AICPA, the ASB is assigned to be the committee in charge to actually issue the standards and the regulations for CPAs, for non-public company audits, next to the necessary guidelines and the interpretations of the laws. Financial Accounting Standards Board (FASB). Over time, the mission to regulate the private sector by clear defined financial accounting standards passed from AICPAs Committee on Accounting Procedure to the Accounting Principles Board. By the end of 1960s the market development triggered an increasing demand for accounting standards updated in the same rhythm as the economical growth. As a result, since 1973, the Financial Accounting Standards Board has been created as a private, non-profit institution, founded with the purpose to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.  [6]   CORPORATE GOVERNANCE: FAMOUS SCANDALS In 2002, Ribstein L. argues in the Journal of Corporation Law that the traditional approach of corporate governance in large corporation must be established by government regulation. This approach is based on assumption that the shareholders, in order to protect their ownership goals, lack of tools to control the management actions. On the other hand, acknowledging the shareholders weakness, the managers are predisposed to take advantage of the situation by acting on their own personal interests and power. Companies financial statements are the mean through which the managers can show their contribution to the corporate overall growth. If in this judgment is included the fact that corporate management usually has had compensation formulae strongly related with companies financial performance (such as options on companys shares), the management tendency to manipulate companies financial statements becomes obvious, or, in other words, the management is highly interested to manage earnings (Kaplan R., 2004). After seventy years of corporate regulation, in 2001 and 2002 series of management frauds rocked the investors trust in the market. Scandals like Enron, WorldCom, Tyco, Adelphia, and Waste Management opened a new era of financial manipulation. What is essential to be mentioned is the fact that all these frauds were possible despite all the levels of supervision in place, such as executive directors, external auditors, accounting firms, debt rating agencies, or securities market analysts (Ribstein L., 2002). The most resonant scandal was Enron, which, after being one of the worlds biggest power dealers, revealed in October 2001 losses higher than $70 billion in equity value. WorldCom, which played an important role on telecommunication market, disclosed in March 2002 that its revenues are overstated by capitalizing expenses, losing $180 billion in shareholder equity. Both cases will be discussed in the following section, emphasizing on fraudulent operations and corporations weaknesses. II.1. Enron Short summary: Disclosure date October 2001 Charges False increased profits, hidden liabilities totaling over $1 billion by using off-the-books transactions. Manipulation of the Californian energy market during the electricity crisis, recording total profits of $2.7 billion from trading electricity and gas in western markets (Markham J., 2006). Extorting and gaming the power prices, as well as an overcharge of $175 million for electricity generated by Enron wind farms (Markham J., 2006). Securities fraud, wire fraud, money laundering, insider trading, and filing false income tax returns (for Enrons executives). Auditing firm Arthur Anderson With losses higher than $70 billion in equity value (Bryce R., 2002), Enron scandal is one of the biggest political scandals in American history. In 1985, Enron started its business as an important trader on U.S. energy market, developing its operations within: transactions with natural gas, constructions of power facilities and pipelines, telecommunications services, buying/selling commodities. Its rapid growth offered to the public media a sensation of unstoppable revenues and solid financial stability. Before the public disclosure from 2001, the revenues and the incomes reported by Enron were impressive (Markham J., 2006): in 1998 $31 billion in revenue and $703 million in net income after expenses; in 1999 $40 billion in revenue and $893 million in net income after expenses; in 2000 $100 billion in revenue and $979 million in net income after expenses. In fact, the revenues were not real, the financial image presented to the shareholders being an illusion. In order to hide its losses Enron stretched the limitations of accounting standards and took advantage of all the regulatory lacks. Due to its business specificity, the accounting recording was challenging. First aspect regarded the long-term contracts for which the current accounting rules obliged the company to forecast the future revenues. In this case Enrons income recognition was made at present (or fair) value, using mark-to-market accounting, regardless the prospective economic conditions. The second aspect was linked with Enrons reliance on structured financial transactions and, implicitly, on special purpose entities (SPEs). In this area the accounting standards were questionable, being debated by practitioners because of the difference which could be created between real economic situation and companies financial indicators. Behind this glowing image, Enron built a network of derivatives trading and transactions with SPEs, which generated substantial revenues not only for the company itself, but also for the companys directors involved in the SPEs partnerships. The report of investigation of the Enron Special Investigative Committee (Powers W., et al., 2002) mentioned the amounts by which Enrons employees were illicitly enriched: à ¢Ã¢â€š ¬Ã‚ ¦Fastow (i.e. Enrons CFO) by at least $30 million, Kopper (i.e. Enrons finance executive) by at least $10 millionà ¢Ã¢â€š ¬Ã‚ ¦. In October 2001 Enron had to recognize expenses of $1.01 billion after tax and two months later, Enron filed for bankruptcy. Enrons failure is a clear example of corporate governance malfunction. Managers were compensated with stock options based on the companys short-term performance with no other restrictions, compensation program that incentivized managers to increase the short-term performance regardless the long-term consequences. Next to Enrons management, part of the blame is assigned to external auditors (Arthur Andersen) and to parties responsible for the companys internal governance (see appendix 1 for a graphic representation of the links between Enrons managers and investors). Analyzing the implications of accounting rules over the Enrons scandal one statement must be made. U.S. GAAP are very extensive and, even more, rigid in its provisions, inspiring financial professionals to find creative accounting solutions to avoid the rules. II.2. WorldCom Short summary: Disclosure date March 2002 Charges Use of undisclosed and improper accounting that materially overstated its income before income taxes and minority interests by approximately $3.055 billion in 2001 and $797 million during the first quarter of 2002  [7]   WorldComs transfer of its costs to its capital accounts violated the established standards of generally accepted accounting principles  [8]  resulting in $3.8 billion fraud. WorldCom violated the anti-fraud and reporting provisions of the federal securities laws  [9]   WorldComs CEO Bernard Ebbers received from the company off-the-books loans of $408 million. Auditing firm Arthur Anderson In 1995 LDDC (Long Distance Discount Company) became WorldCom, one of the biggest telecommunication company on the U.S. market. Its CEO, Bernie Embers, joined the company in its early starts, in 1985. During his administration, the company experienced a period of high growth, with revenues reaching billions of dollars. In 1996, after the acquisition of MFS Communication Inc., WorldCom became the fourth biggest telecommunication company (Markham J., 2006), looking forward to using the opportunities offered by the new breakthrough innovations, such as fiber-optics and Internet. In October 1997 WorldCom announced the merger with MCI Communications for $30 billion. The company continued to grow, reporting earnings of $16 billion (Markham J., 2006) between 1996 and 2000, even if the SEC obstructed the company from considering deductible large amounts spend in research and development. In the early 2000, the entire telecommunication industry started to slow down, and, also, the stock prices were declining. The same happened in WorldComs case. By the middle of 2000, the stock price was almost half its 1999 price. Even so, WorldCom announced surprising profits (Markham J., 2006): $1.4 billion for 2001 and $130 million for the first quarter of 2002 (when in fact the company recorded losses). In March 2002, after an internal audit engagement, WorldCom announced the restatement of its financials figures due to inappropriate accounting recordings of the revenues between beginning of 2001 and first quarter of 2002, revenues which were not in compliance with GGAP provisions. In June 2002, the SEC charges WorldCom for $3.8 billion fraud  [10]  . As it was revealed by the SEC investigation, WorldCom used an accounting artifice to capitalize its line costs (e.g. fees paid by WorldCom to third party services providers) and, in this way, to keep companys earnings at expected levels. WorldCom filed for bankruptcy in July 2002, wiping out $180 billion in shareholder equity (Markham J., 2006). Ebbers was dismissed from the position of WorldComs CEO in April 2002  [11]  after admitting that he borrowed money from WorldCom in its attempt to cover his losses from buying WorldCom shares  [12]  . In 2005 Ebbers was sentenced to 25 years in jail. As presented by SECs WorldCom corporate monitor, Richard Breeden, in his report on the companys measures to restore its governance, WorldCom seemed to meet most of the governance standards of its time (Breeden R., 2003). The companys configuration included all the necessary structures required for corporate governance (such as audit committee, compensation committee etc.), with almost 80% of the directors fulfilling the independence requirements. But, in fact, most of these independents were very strong linked to Ebbers, through their incomes. So, corporate governance is not only accomplishing a checklist with requirements, but being deeply concerned about the independence impediments. In WorldComs case the management board failed to assess the companys risks and to draw corrective risk procedures. In Enrons case, the board allowed the CFO to participate in financial partnerships (e.g. SPEs), searching for his personal gain. In both cases, Enron and WorldCom, the CFOs failed to supply accurate financial data. Their fraud involvement was a real obstacle for which the problems were discovered too late. Hard interpretations of GAAPs provisions regarding net income and future earnings as well as unrealistic cash flow statements were present also in both companies. Furthermore, lacking of an appropriate internal control system, the adjustments in the companies financial reports were easy to be made by the high level employees. SARBANES-OXLEY ACT OF 2002 The scandals of accounting fraud, corporate misbehaviors, non-compliance with business ethics, and bankruptcies occurred in high-level companies like Enron and WorldCom revealed the markets strong need for deeper reforms in corporate regulations. In July 2002, the U.S. Congress ratified the Sarbanes-Oxley Act (known also as the Public Company Accounting Reform and Investors Protection Act of 2002) in response to the corporate crisis. One of the most important legislative action since the Acts of 1933 and 1934, Sarbanes-Oxley has as objectives to rebuild the investors trust in the market and to enhance the transparency and morality of public companies, avoiding future similar allegations. Through the Sarbanes-Oxley Act are addressed issues like managements legal liability, increased independence rules for internal governance agents, mandatory internal control audits, and increased managements responsibility for financial reporting. Furthermore, Sarbanes-Oxley increases the SECs power to determine that an individual is unfit to serve as an officer or director of a publicly-traded company, even in the absence of a judicial finding of a violation of the federal securities laws (Fisch J., 2004). Source: Anand S., 2007, Essentials of Sarbanes-Oxley, John Wiley Sons, Inc., ISBN 978-0-470-05668-4, page 23. Emphasizing on the importance of business codes of ethics, in 2003, Harvard Law Review explained the Acts provisions related to self-policing as a consequence of the general perception that these series of scandals and bankruptcies are not just a failure of the regulations, but a failure of management behavior. It was not enough anymore to just comply on formal managerial structure and independence requirements. Both, Enron and WorldCom had management boards that complied with independence standards, but were not able to work efficiently due to conflict of interests and strong relationships with CEOs. Furthermore, management boards must be deeply involved in companies business and must understand the risks, rather than simply remain independent (Fisch J., 2004). Enrons and WorldComs boards were far away from taking real actions against CEOs/CFOs practices or from reacting in real-time to companies difficulties. Considering the patterns of fraud cases and the fact that CEOs and CFOs acted as primary deceivers, the Sarbanes-Oxley Act states, as main provision, the necessity to increase top-managements responsibilities for the consistency of companies financial statements. IV.1. SOXs summary The Act requirements must be perceived by the companies as a starting point in building operational processes, with an enhanced internal control system through entire business. Complying with SOX is not a one-time project, but a continuous improvement process, with executives going beyond compliance and focusing on the quality of overall business operations (KPMG, 2004). Source: KPMG, 2004, Sarbanes-Oxley Section 404: An Overview of the PCAOBs Requirements, KPMG International Despite the fact that the Sarbanes-Oxley Act is structured in eleven different sections, the law itself must be understood as an overall, compact regulation, and companies must seek for complete compliance. Still, the Acts objectives are more obvious in certain sections, while other sections are important through their compliant difficulties (Anand S., 2007). The summary of the Acts titles is presented in appendix 2. Still, from the compliance point of view and relevance for the two fraud cases previously presented, the most important sections of the Act  [13]  are: Section 302 regarding the corporate responsibility for financial reports; In order to avoid deceiving financial statements Section 302 includes provisions related to internal controls and the management responsibility to evaluate the efficiency of these controls and to disclose any deficiency which might have a negative impact over the financial indicators. Section 401 for Disclosures in Periodic Reports; The financial statements must contain accurate information and must be issued to the public investors with a clear display in order to avoid any misrepresentation or incorrect statement. Also, the transactions, especially the liabilities, from off-balance sheet must be transparent and presented in the reporting file. Section 404 is related with the management mandatory evaluation and certification of companies internal control systems; This section raised many discussions, being one of the most controversial provisions of the Act. The main reason for these discussions was the character of this section which implies the highest amount of resources and efforts to be spend in order to obtain SOX compliance. As stated by Section 404, in annual financial statements, executive directors must declare their acknowledgement of the responsibility for establishing, implementing and maintaining the internal control system. The main purpose of this statement is to present the investors the internal controls structure and to assure them about its efficiency. Section 409 stating the necessity of real-time disclosures when important changes are made in companies financial indicators during the periods between quarterly reports. Without this section the investors would have to base their decisions on obsolete statements. Unlike Section 404, this section didnt implied heavy resource allocation. IV.2. Public Company Accounting Oversight Board (PCAOB) The Sarbanes-Oxley Act created the PCAOB, a private-sector, nonprofit corporation, having as mission to oversee the auditors of public companies in order to  protect investors and the public interest by promoting informative, fair, and independent audit reports  [14]   By creating the PCAOB, the self-regulating model of accounting industry was no longer valid, the responsibility and authority of creating standards and enforcing audits for public companies being transferred from the profession side (AICPA) to an independent party (PCAOB). Through its provisions, the Sarbanes-Oxley Act obliged, for the first time in regulating history, the auditors of public companies to be overseen by external and independent parties. The SEC maintained its authoritative power over the PCAOB, by naming the governing board and by amending the organizations bylaws, standards and budgets  [15]  . SECTION 404. MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS V.1. Section 404 Rules As stated by the SOX Section 404, there are a set of rules for management to follow in assessing the internal controls structure within the company. The broad definition of the term internal control refers to all the areas within an organizations business, but inside SOXs terminology, the internal control term is used strictly for defining the internal control over financial reporting. First of all, the management is responsible for creating the internal controls structure, in accordance with his business processes. An important aspect must be clarified here. Neither internal auditors, nor external auditors are in charge with developing the internal control keys. The companys CEO and the top-management team must take this responsibility and act in accordance as a whole. Furthermore, it is not enough just to create the system, but to periodically update it in order to keep up with the business changing rhythm. The assessment of internal controls must be made with a recognized framework. In the U.S. most companies uses COSO framework (the Committee of Sponsoring Organizations of the Treadway Commission framework), or COBIT framework (the Control Objectives for Information and related Technology framework). (We will not discuss these frameworks in this report.) The internal controls assessment must be performed annually, at the year-end. The external audit company must not reassess the internal control system, but perform an audit in relation with the managements appraisal. In other words, the external audit must not redo the entire internal control structure assessment, but only to rely on the managements performance regarding the internal control appraisal. Even so, senior management must obtain the full confidence that its assessment presents a true landscape of the internal control system, as of the year-end, with comfortable assurance that any material misstatement can be avoided or identified (The Institute of Internal Auditors, 2008). V.2. Consequences of Implementing Section 404 Costs of implementing SOX 404. Generally speaking, the costs derived from internal controls implementation and testing can be easily identified as payments for audit and compliance employees, time spent by operational employees and external audit fees. Still, in the first year of compliance, overall efforts were overwhelming due to work amount needed to be done, work which included analyzing documentation, verifying accounts balances, monitoring and evaluating controls keys performance and efficiency, establishing reporting structure. One important reason for which compliance process was so complex was the fact that a major part of the control keys were done manually, with very much time-consuming, and only a small part of control keys were IT-based. Next to these costs, Langevoort D. (2006) mentions the opportunity costs and the distractions, referring to the fact that some audit tests require direct observation of operations (e.g. cash processing) and explanations from in-charge personnel or manager. He is going even further by stating that direct control can create discomfort to employees which will impact the sense of trust and decrease the employees loyalty. As mentioned before, the compliance with Section 404 turned out to be the most expensive part of the entire Sarbanes-Oxley Act. In August 2004, the Financial Executives Institute revealed a study of 224 companies which indicated costs up to $3 million for the biggest companies (Rittenberg L., Miller P., 2005). Even more, in an article from BusinessWeek, William Zollars, chairman and CEO of Yellow Roadway, the U.S. largest trucking firm, explained that his company paid about $9 million to accountants for their work, amount which represented 3% of annual profits for 2004  [16]  . After first year of SOX implementation, an analysis carried out by the PCAOB concluded that the costs for compliance were high because, in many cases, too many audit tests were performed and documented by auditors, companies spending too much time on internal controls related to financial reporting processes (OBrien P., 2006). Still, as presented in the left hand picture, in January 2005, according to a survey developed by the Institute of Internal Auditors, 72% of respondents considered that the costs are higher than the benefits for SOX 404 first year of implementation. After six years of SOX compliance, in August 2008, Dodwell W. argues, in an article in the CPA Journal, that initial implementation expenses made by companies are paying off. Next to the costs presented above, the cost-benefit analysis should also consider: concen

Hamlet and Tragedy Essay -- essays papers

Hamlet and Tragedy Hamlet: A Tragedy When you think of William Shakespeare, Hamlet is the first thing most people think of, as his work. Hamlet is also a classic example of a tragedy. In all tragedies the hero suffers, and usually dies at the end. All good pieces of literature written way back when, are usually tragedies. The most important element is the amount of free will the character has. In every tragedy, the character must display free will. If every action is controlled by a hero's destiny, then the hero's death can't be avoided, and in a tragedy the sad part is that it could. Hamlet's death could have been avoided many times. Hamlet had many opportunities to kill Claudius, but did not take advantage of them. He also had the option of making his claim public, but instead he chose not too. In Hamlet, although Hamlet dies, it is almost for the best. His life was not worth living anymore, with his parents and Ophelia dead. Also, although Hamlet dies, he is able to kill Claudius and get rid of the e...

The Reasons For American Economic Prosperity In The 1920s :: essays research papers

Why was there economic prosperity in American in the 1920’s? I know that America on it’s surface was prosperous during the 1920’s. I know this because of the physical signs, and the evidence I have found supporting this concept. Some of the physical signs of the then prosperity are evident today, like the skyscrapers and Empire State building. There were the inventions of manufactured fabrics and materials such as Bakelite, artificial silk and Cellophane. Airlines carried almost half a million passengers a year, which compared to Europe at the same time, was a massive number of people. In this essay I will analyse all the reasons behind the economic prosperity in 1920. World War 1 assisted America’s latter prosperity. Throughout the war American industry benefited, because countries that couldn’t buy goods from Europe, did so from America. And along with this Europe bought products from America, products that they weren’t producing while they were fighting. Furthermore, during the First World War, American banks lent money to their European Allies. In the 1920’s, this was being paid back with interest. The war had also led to advances in technology, such as mechanism and manufactured materials. Production of Iron Ore, coal, petrol and wheat and exportation of chemicals, wheat, iron and steal all had increased considerably by the end of the war. By the end of the war, America had decided to isolate itself from the problems of Europe, and set itself about making the most profit in business. This isolationism built up the confidence of the American people. An increase in personal wealth, demand and output production all helped America’s prosperity. Banks were eager to lend money to businesses and individual’s. With this easy money, and the introduction of hire-purchase schemes, the demand for products increased. Consumer spending was incredibly high, which is reflected in the statistic that in 1920 there were 312 department stores, and by 1929 there were 1395. There was a consumer boom. Business profits rose by 80% during this period, which in turn raised share dividends by 65%. Also some women had continued working as they had done through the war. Both of these elements contributed to giving people again, more money to spend. However, the availability of money was not the only reason for increased consumer spending. New inventions such as vacuum cleaners, refrigerators and washing machines became available, and advertising over the popular radio encouraged consumers to spend more on everyday products.

Managing financial and non-financial resources

Universities are institutions where students pursue higher levels of education. This institution enables the students to   study and to conduct research work in various academic fields and after completing and qualifying in their studies   they are awarded academic degrees such as the bachelors degree, master degree and the doctorate degree.The institution is headed by a board of trustees who ensure that the operations of the institution are carried out effectively.   The chancellor is usually appointed to run the institution.   The institution has many departments which are headed by various deans who ensure that the students’ affairs   and the learning affairs of the institution are run effectively and efficiently.In case of public universities they are managed by the government through the   Higher   Education Boards which   review their financial needs and   their budget proposals and then they allocate appropriate fund according to the demand of the inst itutions departments expenses.   The private universities are usually sponsored by private persons thus their operations are not affected by the government since they carry out their activities independently.A budget is a plan of how an organization would like to achieve its goals in the future.   It consists of estimates that the management with its personnel sets so that the operations of the institution can     run effectively.   A budget process is the procedure that is followed by an organization or a government on how to create and to approve a budget.The administrator of an organization organizes   a meeting in order to ensure that all members of the organization participate in the preparation of the budget so that the following year’s activities are adequately addressed and then the financial managers ensure that appropriate funds are allocated against the activities of the organization.   The chief executive officers reviews and approves the budgets so that they can make appropriate amendments if need be.The allocation of resources of a university in the budget process is usually made in compliance   with the university’s strategic plans .   The deans and the directors of the university develop the budget using the proposals for the university faculty.   They consult department chairmen and unit heads so that they can provide a comprehensive budget which is helpful to the particular faculty concerned.   The university vice chancellor is the last person who approves the budget so that it can be made effective and hence he or she directs on how the budget is to implemented by various personnel in the institution..The expenditures of a university are forecasted, monitored and controlled using the following procedure.   The finance officer creates a valid account that relates to the activities that the university would like to achieve then an account number is created to those accounts .   The account is monitored b y carrying one monthly reconciliations of revenues and expenditures and then comparing actual revenues and expenditures to the budget so as to determine the variance so that corrective measures can be carried out. For example for the contracts and clinical activities   Ã‚  they are prepared using invoices which are used to monitor that the terms and conditions of a company are properly followed.In case there are deficit balances on the allocated accounts they are regulated using the accounts that are associated with them .A comprehensive budget for the institution is necessary   because   there are many activities that are carried out in the institution thus   it is important to   correct the deficits that an organisation has so as to enable the institution to carry out its activities effectively   and to   enable it to achieve its   goals in the future.   The management of the university carries out internal controls when preparing the budget.   An auditor is us ually appointed   carries out an   audit in   books of account   so as to ensure that the financial statements portray a true view and also ensure that the books of accounts are accurately and properly kept.   The budget can be forecast using the current years performance and the resources that are available in   the university.The manager of the institution can encourage people to share responsibility by involving them in the decision making process.   This can enable the employees of the institution to contribute their views, ideas about how to run the activities and this can help them to appreciate the operations of the company and they can enhance the implementation the ideas of an organisation.The managers of the institution can manage non-financial resources by employing qualified personnel to handle and oversee their operation since in one way or another they contribute to the success of the business. The management of the institution can also manage the non-fin ancial resources by preparing strategic budgeting approaches which can help them to align the necessary resources so as to enhance proper strategic plans for the institution.The approaches that are used in monitoring and controlling non-financial resources are :activity based costing it is an approach that is used in the measuring the   costs of activities of an organisation this approach enables a manager not to over or under estimate his costs because since either of the two can lead the managers to not to prepare their budget properly since specific funds are allocated to particular projects of a company and this enables the activities of the institution to be carried out effectively.The other approach that can be used in monitoring and controlling the non-financial resources are the use of the balanced scorecard it is an approach that is used in evaluating the performance of the employees of the institution. It enables the management to assess themselves whether they are perfo rming their activities as expected of them ,in case they don’t perform as expected of them they can take measures of preventing the   bad outcomes from happening in the future.The advantages of using this approaches is that they enable the management of the organisation to perform their activities effectively and once they adhere to what they   are expected to do   this   can enable the organisation to achieve its   goals and hence they enable it to have greater returns for the institution . The disadvantages of using this approaches is that they may be very costly for the organisation to implement because of inadequacy of resources to implement the projects , some people in the institution may   oppose the idea of implementing the project   because either they may   biased or they would   not like to accept changes in their institutions..People spend money for various reasons one is to satisfy their basic needs such as to purchase food, clothing and shelter . In case of     the universities the management   spends money in order to meet their current budgets of what they would like to accomplish in a given financial year, thus in their budget they allocate specific funds for specific projects that they would like to set up in the future .The institution may plan in its budget to build more lecture rooms in order to accommodate the increasing of students that are enrolling in the institutions, since these can be a good investment since in the long run it can generate returns for the institution since the students can enroll in it due to the availability of resources that enhance learning to take place effectively.In case of universities they prepare capital budget since their expenditure is mostly associated with the purchase of infrastructure that is most preferable for the organization.   The management of the institution can be able to select a type of investment for their institution based on the risk that is involved in se tting up the project and also with regard to how the plans of setting up the project have been designed so that enough resources are allocated so that the project can be effectively implemented.   An investment can be evaluated by using the following capital budgeting techniques.   One of them is the net present value technique, internal rate of return and the pay back technique.The capital budgeting technique that is called net present value can assist the management of an institution to make a decision on whether to accept an investment or not.   If an investment has a positive net present value then it means that an investor can invest in that project.   The rate of return of the investment should be selected depending on the riskiness of the project.   The riskiness of a project is determined by how the case   is   flowing in the institution, if the cash inflow is higher than the cash outflow then it is important to invest in the project since the returns of the pr oject are high.The internal rate of return is a capital budgeting technique that is used in measuring the efficiency of a project.   It is a discount rate that gives the same result as the net present value. If the internal rate of return is higher than the hurdle rate then an investment   can be implemented   using the rate.The financial tools can be used by the institution in carrying out its activities .The financial tools consist of financial ratios the enable an institution to compare its performance in its previous years performance so that they can take corrective measures if need be since the ratios are prepared using variables in the financial statements thus comparing their performance can be easy since the financial statements of a company are usually prepared annually.It is important to manage the resources of an institution because they enable it to achieve goals and objectives in the future .If the resources are properly managed   the an institution can be able to earn greater returns and hence it can continue to progress in the future.