Relationship Between Economic Variables And Sub Sector Price Finance Essay - Free Essay Example

Sample details Pages: 6 Words: 1881 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? This chapter provides an outline of the research process designed to investigate the relationship between economic variables and Sub-sector price index. 3.1 The Data In this section, we will summarize our models data and present the methodology of our model. The daily data for interdependent and dependable variables e.g. FBM KLSE (Kuala Lumpur Composite Index), T-Bill band 4, Crude oil WTI (West Texas Intermediate) price, Gold Bullion LBM (U$ Troy Ounce) price, T-bill band 4, Kuala Lumpur Composite Index (KLCI) price index, and Sub-sector Price Index are collected from the DataStream and cover from period 17/04/2000 to 18/04/2011. There are 2610 daily observations obtained from DataStream. The data set is given in the Appendix of this paper. In relation on this, dependable variable are consists of ten (10) majors price index e.g., Consumer Product, Plantation, Finance, Trading and Services, Industrial, Industrial Products, Construction, Mining, Properties, and Technology. As can be seen from figure 1, there is an increasing trend on global gold price and reached its the highest point, $ 1,492.06, on April, 2011. The gold price was tending to increase since year October, 2008. We believe this trend will continues increasing due to strong demand and short supply gold in the commodities market. Moreover, some expertise research firms like GFMS, a leading global precious metals consultancy, released its 2011 Gold Survey and GFMS expects that gold will reach $1,600 by the end of 2011. Another independent variable, Crude oil WTI (West Texas Intermediate) price known as Texas light sweet, is a type of crude oil used as a benchmark in oil pricing. As refer to figure 2, the oil price increase significantly during year 2007 and the reasons behind can be explained by the Asian growing demand on oil to sustain their economy growth. The past researchers also been reported, that oil consumption in India was increased approximately 8.7% according 1998 and 6.5% according to 2006. Mehmet Eryigit (2009) has studied and found that in year 2007, USA has been consumed the 23.9% of the total oil, however total share of the world oil cons umption for China, India and Turkey in 2009 is only accounted 13.4% (China consumed 9.3%, India consumed 3.3%, and Turkey consumed 0.8%). Meanwhile, back to middle of year 2008 Sub-prime crisis was happened in U.S financial system and the crude oil price has reached to a minimum price $31, that is a minimum last trader price was reported since year 2004. After decreasing trend along the year 2008, early of 2009 crude oil price are in recovery stages and maintained a reasonable price between $ 65 -$ 100 per barrels. We expect the crude oil will continue increasing. The next independent variable is Market returns FBM Kuala Lumpur Composite Index (KLCI). The Kuala Lumpur Composite Index (KLCI) is used as a proxy for the performance of the Kuala Lumpur Stock Exchange and comprises the largest 30 companies listed on the Main Board by full market capitalization. The last independent variable is T-Bill band 4. T-Bill band 4 is type of money market instrument. The Malaysian Treasury B ills (MTB) issued by the Central Bank of Malaysia Are tradable on yield basis (discounted rate) based on bands of remaining tenure (e.g., Band 4 = 68 to 91 days to maturity). This instrument are represents the short-term interest rate in the Malaysia money market. The high or low interest rate will make bonds look more attractive than stock and consequently impact the stock price return. Don’t waste time! Our writers will create an original "Relationship Between Economic Variables And Sub Sector Price Finance Essay" essay for you Create order Figure 1: Gold Bullion LBM (U$ Troy Ounce) Price Figure 2: Crude Oil WTI (West Texas Intermediate) Price 3.2 Conceptual Framework 1. Crude Oil WTI 2. Gold Bullion LBM (U$Troy Ounces) 3. KLSE (Kuala Lumpur Composite Index) 4. T-Bill Band 4 Sub Sector Price Index Consumer Product, Plantation, Finance Trading and Services, Industrial, Industrial Products, Construction, Mining, Properties, and Technology.The conceptual framework of this study was derived from literature review where proven macroeconomic variables that effect FBM Kuala Lumpur Composite Index (KLCI) are used as independent variables, Crude oil WTI (West Texas Intermediate) future contract price, Gold Bullion LBM (U$ Troy Ounce) price, and T-bill band 4 had been widely used in evaluating relationship between macroeconomic variables and Sub-sector price index. Further to that, crude oil price is also proven to be a macroeconomic variable that direct impact to the conditional of the stock market. In fact, oil price can affect prices directly by impacting future cash flows or indirectly through an impact on the interest rate used to discount future cash flows. 3.3. Design of Study The Arbitrage Pricing Theory (APT) is an expansion model of Capital Asset Pricing Model (CAPM) Single -factor model. That is, it specifies risk as a function of only one factor, the securitys beta coefficient. In a reality, the risk / return relationship is more complex, with a stocks required return a function of more than one factor. For example, CAPM method is not suitable on this research because there are a various interdependent variables effect the dependent variables. Thus, we should adopt the APT (Arbitrage Pricing Theory) model to define and analyses these factors. A statistical technique that simultaneously develop a mathematical relationship between a single depend variable and two or more independent variables. With the four independent variables the prediction of Y is expressed by the following equation: Regression equation is; Multi-factor Model: Rit = ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€šÃ‚ + BetaMRtMRt + Betaoil Oilt + BetaGoldGoldt+ BetaT-billT-billt (1) Indicators: ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€šÃ‚  = Intercept / Alpha Rit = Return on major sub sector MRt = Market Returns Oilt = Oil Returns Goldt = Gold Returns T-billt= T-bill Returns Where the Sub sector price index is a dependent variable and it shows the return on the Sub sector price index. Beta is constant term and we have four (4) independent variables; Gold price, Oil price, Market returns, and short-term interest rate respectively. We used Ordinary Least Squares (OLS) method to evaluate the relationships between the Gold price, Oil price, Market returns, and short-term interest rate against the ten (10) sub sector price index. The market return was benchmark to the FBM Kuala Lumpur Composite Index (KLCI) composite share price index. Time series of short-term interest rate taken over the T-bill band 4, which is considered to be the short-term interest rate (risk-free interest rate). The first steps, we required to find the return of each independent and dependent variables using below formula: Daily return formula is calculated using as per below: Ri,t = (Pi,t Pi, t-1)/ (Pi, t-1) (2) Where; Ri,t is the price return of ith variable on time t Pi, t is the closing price of day t for variable i. Pi, t-1 is the closing price previous of day t for variable i. Then daily returns are aggregated that are our preliminary input to run regression analysis. The sample period for our study extends from periods 17/04/2000 to 18/04/2011. Then after, used the input and the multi-factor model to run the regression analysis on each interdependent and dependent variable to examine whether each of them have any significant relationship. In additional, sub-part of the analysis section will examine the Gold Oil ratio analysis, the purpose is to determining whether the current Gold Oil ratio is below th e benchmark ratio is either too cheap, or crude oil is too expensive otherwise when ratio is greater than benchmark, oil is either too cheap or gold. Sub-parts of the session will analysis on Gold ratio trend from period 17/04/2000 to 18/04/2011. The mean of gold oil ratio as an indicator for investor to decide whether the gold price is expensive, crude oil prices is cheap or the gold price is cheap, crude oil price is expensive. Using below formula: Gold Ratio = Gold Price0, t / Crude oil Price0, t (3) Where; Gold Price0, t is the closing price of day t for Gold. Crude oil Price0, t is the closing price of day t for Crude oil. CHAPTER 4 FINDINGS AND DISCUSSION This chapter presents the findings of the study and provide a through discussion and analysis of the findings. 4.1 Data Analysis To observe the effect of crude oil price, gold price, market returns, and short-term interest rates, the regression is calculated by using Ordinary Least Square (OLS) estimation procedure. Results are presented in Table 1. Referring to the result obtained from Ordinary Least Square (OLS) analysis, the result found that gold and market return have a positive significant statistical relationship with consumer price index at 5% significant level. These also make a same result for plantation price index. The result implies that gold and market return have a positive significant statistical relationship with plantation price index. Between, the trading and services index shows positive significant relationship with market returns but negative statistical relationship with gold. It implies, when the trading and service price index increase 1% the gold price will decrease 0.011%. Moreover, the regression model is statistically useful in explaining the variation in the Finance, mining, and technology price index with 95% confidence level. The result shows positive significant relationships with market returns. In additional, the industrial, industrial product, and properties price index regression model analysis results shows that market returns have a positive significant statistical relationship with three sub-sector price index. On the other hands, the industrial price index show negative significant statistical relationship with crude oil price at 5% significant level but the industrial product and properties have a positive significant statistical relationship with crude oil price. Finally, from the regression model analysis result found that, only the construction price index has a negative significant statistical relationship with t-bill at 5% significant level and others sub sector price index dont have any statistical relationship with the T-bill. 4.2 Subpart Analysis Gold/ Oil Ratio Gold Oil Ratio is an expressed mathematically as the per-ounce price of gold divided by the cost of a barrel of crude oil, the ratio was telling us how many barrels of oil can be bought with an ounce of gold. Even though oil and gold are thought to be hedging on inflation, their price movements arent in lockstep. Since the 2001 launch of the current bull cycle, the correlation between U.S. benchmark West Texas Intermediate (WTI) crude oil and the London morning gold fix is only 23 percent. In fact, its the lack of a tight correlation that makes the gold/oil ratio meaningful. The ratio can fluctuated over time; since 2002, one ounce of gold could have bought between 11 and 16 barrels of oil. In midyear 2008, as oil prices surged, gold scraped a historic low at a 6x multiple (a 6-to-1 ratio). After half year later, the ratio had shoot to the 23x level after massive de-leveraging sent oil prices down $100 a barrel. Over the longer term-say, the past four decades-the average m ultiple has been 15x. Signals: The gold-oil identifies: Buying opportunities (for gold) when the gold-oil ratio turns up at/below 7 barrels/ounce; and Selling opportunities when the gold-oil ratio turns down at/above 12 barrels/ounce. Table 1: Minimum and Maximum Gold Oil Ratio Record during the Period.  2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Max 15,18 15,74 13,85 11,67 8,94 11,08 12,54 23,11 28,05 17,55 16,29 Min 9,14 10,56 9,35 11,67 6,96 8,22 8,33 6,52 13,15 13,69 13,98             Table 2: Summary Table  Consumer Product Plantation Finance Trading services Industrial Industrial Product Construction Mining Properties Technology Market return ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ Oil ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ'Æ’- Gold ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ'Æ’- ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- T-Bill ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ'Æ’- ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒâ€¦Ã‚ ¡ = Significant at 5% ÃÆ'Æ’- = No significant at 5% Table 3: ANOVA Table: Components Consumer Product Plantation Finance Trading services Industrial Coefficient Intercept 0,0002420 0,0003258 0,0000982 (0,0000444) 0,0000733 KLCI PRICE INDEX 0,5623974 0,9784759 1,0645010 0,9994746 0,7729328 Crude oil (0,0054988) (0,0018498) 0,0025010 0,0026129 (0,0109819) Gold 0,0158866 0,0441310 (0,0037211) (0,0112407) 0,0098721 T-bil (0,0034387) (0,0048518) (0,0059951) 0,0023219 (0,0004433) Adjusted R Square 0,5606859 0,5041736 0,8081372 0,8927299 0,6798043  P-value Intercept 0,00310016 0,04191723 0,24917804 0,43452323 0,39876364 KLCI PRICE INDEX Crude oil 0,0931 0,7729 0,4634 0,2512 0,0016 Gold 0,0258 0,0016 0,6160 0,0233 0,1922 T-bil 0,4479 0,5845 0,2042 0,4613 0,9267 Components Industrial Product Construction Mining Properties Technology Coefficient Intercept (0,0000330) (0,0001192) 0,0006207 (0,0000617) (0,0006292) KLCI PRICE INDEX 0,7928138 1,1884864 0,8354046 0,9573352 0,9419663 Crude oil 0,0092151 0,0029884 (0,0115321) 0,0112074 0,0049796 Gold 0,0145574 0,0093185 (0,0493598) 0,0059426 0,0372188 T-bil (0,0030311) (0,0202644) 0,0016072 (0,0024516) (0,0004453) Adjusted R Square 0,6357414 0,6109031 0,0462843 0,5468360 0,3246577  P-value Intercept 0,73923273 0,44480430 0,30905151 0,66749650 0,00515217 KLCI PRICE INDEX 0,000000 0,000000 Crude oil 0,0203 0,6323 0,6369 0,0515 0,5801 Gold 0,0918 0,4929 0,3531 0,6349 0,0574 T-bil 0,5810 0,0191 0,9621 0,7582 0,9715

Assess the View That the Nuclear Family Functions to...

Assess the view that the nuclear family functions to benefit all its members and society as a whole. A nuclear family is universal and is defined as a two generational grouping; consisting of a father, mother and their children, all living in the same household. The idea of the nuclear family was first noticed in Western Europe in 17th century. The concept that narrowly defines a nuclear family is essential to the stability in modern society and has been promoted by modern social conservatives in the United States and has been challenged inadequate to describe the complexity of actual family relations. In this essay, I shall be assessing the views that the nuclear family functions to benefit all its members and society as a whole, from a†¦show more content†¦Therefore, functionalists argue, the nuclear family is a win, win situation for both the family members and the other institutions which make up society as a whole. 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Youth Tourism Free Essays

2. 3 Youth Tourism Youth tourism has been identified as one of the largest segments of global tourism, and is also seen as having considerable potential for future growth as student numbers rise and youth affluence increases (Buhalis and Costa, 2006). To cater for younger surf tourists, a number of companies now offer surf safaris, generally a charter bus which travels along a mainland coastline stopping at well-known surf breaks, with accommodation typically in backpackers and similar establishments. We will write a custom essay sample on Youth Tourism or any similar topic only for you Order Now As surfing becomes easier to learn, it seems likely that its popularity will continue to increase in future generations. In regards to marketing, specialist surf tour operators in the Indo-Pacific region for example, market principally through specialist surfing magazines, specialist surf travel agents, and directly via the internet. Some operate at only a single location, whereas others offer tours to a wide variety of different countries and destinations. Some surf lodges and surf charter boats sell their products through many different agents, whereas others have exclusive agency agreements with particular agents in individual countries (Buckley, R. C 2000). According to Richards and Wilson (2003) growing travel participation by young people is being fuelled by a number of factors, including increased participation in higher education, falling levels of youth employment, and increased travel budgets through parental contribution, savings, and combining work and travel. The search for more exciting and unique experiences, combine with cheaper long-distance travel, has also pushed youth travel ever further towards the geographical margins of the travel industry. In 1995, the European Travel Commission published a study specifically dedicated to Europe’s youth travel market covering 26 countries. The study was commissioned in response to a perceived neglect of the market both by the travel industry and by government authorities. It concluded that the 15 to 26 age group took around 80 million trips and made 100 million border crossings per year, representing a fifth of all international trips and around a quarter of all holiday travel (Horak and Weber, 2000). In a study of outbound travel of German, British and French young people, the WTO (2002) stated that outbound youth tourism accounted for 17% of all international trips in these markets in 2000, concluding that more and more young people are travelling abroad on holiday, to visit friends and to tudy, as well as for business (Richards and Wilson, 2003) In a study carried out by Tourism Australia (2008) â€Å"Tourism Australia defines the youth segment as males and females, aged between 18 and 30 years†. They stated that the youth segment have information at their fingertips such as the use of technology, they are innovators of new products and trends and accepting of change (www. tourism. australia. com Accessed 18/02/2011). When resorts bring a large number of guests to a destination they become inverse factories, bringing customers to their product which has been pre-assembled and resourced for their enjoyment rather than shipping the product out to customers around the world. Saveriades (2000: 154) as citied in (Murphy 2008), notes in his survey of residents in Cypriot seaside resorts, that it has been widely accepted that there have been changes in the lifestyle, traditions, social behaviour, and moral standards, especially of the younger generation. One of the reasons residents make such correlations is that tourism is highly visible (Murphy, 2008). According to Hinch and Highman (2004) water sports such as swimming, surfing, water skiing, and diving hold strong appeal for the youth market. In Peru, more than 20. 000 surfers are visiting the country every year, to enjoy the best waves of the country. Surf tourists to the area come mainly from Australia, USA and Brazil. There are a lot of surf schools and a young surfboard manufacturing industry and there is a connection between water-based sports, surfing and the youth market (www. urfertoday. com Accessed 22/03/2011). According to the UK Coast guide, surfing is a popular water sport which is growing in the UK at a rapid rate. It is estimated that there are now around 250,000 surfers in the country and the sport appeals to all ages and both sexes, not just the young but also the grey market. There has been a particular increase in female surfers, in recent years and there is a g rowing band of professional female surfers who compete in competitions worldwide (www. ukcoastguide. co. uk Accessed 22/03/2011). How to cite Youth Tourism, Papers

Distinguishing Relative Impacts Of Climate -Myassignmenthelp.Com

Question: Discuss About The Distinguishing Relative Impacts Of Climate? Answer: Introduction In the current global scenario, one of the key issues being emerged is the environmental degradation. With the initiation of rapid development around the world, the rate of pollution and emission is ever increasing, which is further contributing in the degradation of the management (Collins et al., 2013). Moreover, it is also to be noted that, impact of the environmental degradation and climate change will not have impact only on certain stakeholders; rather the impact will be holistic and will affect the entire global stakeholders. However, in the recent times, various steps and measures are being promoted by government and other key stakeholders to regulate the degradation of the environment. In accordance to the steps and measures being initiated to regulate the environmental degradation and climatic change, principles of sustainability are being promoted. In the recent times, every stakeholder is maintaining the sustainable approach to overcome the challenges being posed by the environmental issues (Urry, 2015). On the other hand, it is being determined that there are some regions that are more affected for the degradation of the environmental and change in climate compared to some other regions. One of these most affected regions is China. This is due to the reason that, China is the leading developing country in the world with having highest population in the world. Thus, they are witnessing extensive development growth and with the enhancement of their economy, the development is going on rapid pace. Thus, they are also one of the most affected regions in terms of the environment and climate. This report will discuss about the impact of the climate change and environmental degradation on China. Moreover, the responsible stakeholders for the climate change in China will also be identified and determined in this report. This report will discuss the steps and measures that can be initiated by the government and other stakeholders in regulating the climate change in China. Impact of climate change on China The impact of climate change is having holistic impact on different stakeholders and in different sectors. Thus, in order to determine the impact of the climate change, the following sections will discuss from the perspective of different sectors. Water resources One of the most affected areas in China by climate chance is the water resources of China. Northern China already faced drought and Southern China faced flood extensively. This is having negative implications on the agricultural activities (Hagemann et al., 2013). Frequent accounting of the drought and flood is due to the reason of the increased sea level. The average sea level in China is increasing due to the increase in the rate of melting of ice belt. Moreover, due to the climate change some of the rivers in China are facing the shortage of water flow, while some of the rivers are facing the issue of the overflow of the water. Due to all these reason the coastal regions of China are being affected (Haddeland et al., 2014). Degradation of forest Change in the climate is also having negative implications on the trees and plantation. This is due to the reason that, the increase in the temperature together with the increased rate of pollution is causing difficulty for the tree and plantation to grow and survive (Hanewinkel et al., 2013). Thus, forest land is rapidly reducing in China. In addition, along with the degradation of the forest land, the natural ecosystems are also be negatively impacted. Natural ecosystems including bird and animal species are facing the threat of extinction due to the change in the climate. Agriculture Agriculture is one of those sectors, which is directly influenced by the natural calamities and mishaps. Thus, due to the increase in the average sea level, forest degradation and irregular flood and drought are having negative implications on the agricultural activities (Wheeler and Von Braun, 2013). On the other hand, the production of crops is also being reducing due to the change in the climate. This is due to the reason that, the crops are not immune to the increased temperature. It is being estimated that, by 2030, the average production of crops will get reduced by more than 35 percent. Thus, on one hand, the population is rapidly increasing along with increase in the demand for food crops and on the other hand the agricultural production is getting reduced (Kurukulasuriya and Rosenthal, 2013). Thus, it is going to be a challenge for the populous country such as China. Natural disasters Due to the reason of the climate change and degradation of environment, China is also facing the increased amount of natural disasters such as earthquake, typhoon and flood (Grimm et al., 2013). Moreover, they are also facing the increased threat of extreme weather conditions. Thus, china is facing huge economical, infrastructural and social loss due to the frequent incidents of natural disasters. Impact on human beings The majority of the population of China is facing the threat of climate change. This is due to the reason that, occurrence of flood and other natural disasters is causing loss of life. Moreover, with the depletion of the forest lands, the pollution is increasing, which is also causing various diseases for the major portion of the population of China (Ye et al., 2013). In the recent times, China is facing the worst smog in last few years. The smog is causing health issues for the people along with creating barriers in daily life. Loss of capital China is also facing huge loss of investment and capital for the change in the climate and the degradation of the environment. It is being reported that, various business organizations had to halt their production process for months for the natural disasters (Adger et al., 2013). Infrastructure is also facing loss due to the frequent occurrence of the natural disasters. Thus, China is having the challenge of attracting more investments with having the chance of more emergences of natural disasters and climate related issues. Discussion Thus, from the above discussion, it can be concluded that, China is having huge and holistic impact due to the change in climate. However, there are some major areas being identified in China, which are more vulnerable to climate change and environment degradation than the other areas. According to the above figure, the major affected and vulnerable areas are the Beijing, Tianjin, Jiangsu, Shanghai and Zhejiang. Thus, the most developed and developing areas with having the most concentration of all the developmental activities are the most vulnerable areas in China in front of the climate change. Thus, it is a challenge for China to recover the major inflicted areas from the verge of the climate change and degradation of the environment. Responsible stakeholders for the climate change The above sections have discussed about the issues and challenges that are being faced by China in the recent time due to the change in climate. From the above discussion, it can be concluded that, the impact of the climate change is holistic and is having the more or less implications in different sectors. Thus, it is also important to determine the responsible stakeholders from the different sectors who are contributing in the increase of the environment degradation. Similar to the impact of the climate change, responsible stakeholders are also representing from different sectors. The following sections will discuss about the activities of various stakeholders who are responsible for the climate change in China. Common people Common people is the most important and key stakeholder in contributing the climate change in China. This is due to the reason that, the lifestyle of the common people is more or less responsible for the increase in the pollutions and emissions. As discussed earlier, the economy of China is being considered as one of the highest in the world and thus, with the enhancement of the economy, the purchasing power of the customers is increasing. This is leading to the growing demand for different products. For instances, people are more demanding for private cars rather than using public transport (Dulal and Akbar, 2013). This is leading to the increase in the pollution due to the reason that, increase in the number of private cars in road will increase the congestion and more consumption of the fossil fuels. On the other hand, the more will be the demand for private cars for the people, the more will be the demand for the fossil fuels. Hence, fossil fuels are fast depleting along with inc reasing the rate of emission in air, which is further contributing in the climate change. Increase in the population Another reason is the population explosion in China. As earlier discussed, China is the most populous country in the world. Thus, with having huge population, the demand for food crops and energy will also be more (ONeil et al., 2014). However, the more will be the demand for energy, the more will be the use of coal and other fossil fuels for the generation of the electricity. Thus, this lead to the situation, where fossil fuels are being used more and emission is also increasing. On the other hand, with the increase in the demand of the food crops, more lands are coming under the agricultural land. Thus, the forest land is fast depleting to make way for the agricultural activities. Industry Industry is one of the major contributors in the change of climate not only in China but also in the global business scenario. However, China being one of the leading developing nations in the world is attracting more investment in the industrial sector (Baatz, 2013). Moreover, the government is also working on various aspects to attract more foreign investments in industrial sector. Thus, it can be concluded that, rapid industrialization is leading to the use of more energy, more burning of fossil fuels, more grabbing of forest land and more emission of pollutants. It is being reported that, the emission from the industries is rapidly increasing is reducing the air quality. Government Though, government is having less direct role for the climate change, but the policies of them are responsible for the change in the climate and environment degradation. For instance, initiatives taken by the government of China in order to have rapid industrialization are the key source of pollution (Den Elzen et al., 2013). During the preparation of the Olympics 2008, government of China was accused for extensively occupying the forest land for development projects. This type of the initiative further increases the phenomenon of the climate change. Natural disasters It is discussed in the earlier sections that, frequent change in the climate causes more occurrence of the natural disasters. However, it is also to be noted, that natural disasters are one of the key reasons for the climate change. This is due to the reason that, natural disasters such as earthquake and volcano cause emission of huge pollution in the climate (Muttarak and Lutz, 2014). Moreover, the intensity of the natural disasters is so much that, it cause change in the whole ecosystems. Thus, the more will be the origination of the natural disasters in China, the more will be the impact on the climate change. Measures to be taken in order to regulate the climate change There are various measures that can be initiated by different stakeholders in order to regulate the impact and emergence of the climate change. The following sections will discuss about the various steps than can be initiated from the perspective of the different stakeholders. Initiation of the environment friendly vehicles The current business scenario is witnessing the rapid growth of the electric vehicles in the market. These vehicles are being perceived as the environment friendly alternative to the conventional vehicles. Electric vehicles are pollution free and thus, it is more beneficial for the environment (Bakker and Trip, 2013). Thus, it will be one of the recommended steps for the vehicle manufacturers to promote more electric vehicles in the market. The more will be the commercialization of the electric vehicles in the market, the less will be the emission of pollutants in the climate (Tie and Tan, 2013). Increase in the yield of the agricultural crops Another most effective and recommended step will be the increasing the yield of the existing agricultural land. This is due to the reason that, in the earlier sections, it is being discussed that, with the increase in the population in the country, the demand for the food crops is rapidly increasing (Singh, Singh and Sundaram, 2014). However, instead of acquiring the more forest land for the agriculture, the yield per hectare in the existing agricultural land should be initiated with the help of the latest technologies. Thus, if the existing agricultural land can meet the growing demand for the food crops, then there will be no need of acquisition of more forest land. Sustainable development It is also being recommended that, government of China should initiate the policy of sustainable development for the enhancement of the economy (Holden, and Banister, 2017). Initiation of the sustainable development will involve promotion of the environment friendly products for the population along with not using the commodities, which will have negative implications on the environment. Promotion of the renewable energy Renewable energy is one of the most effective means of regulating the climate change. In the recent time, there are various renewable sources of energies such as wind, water and bio fuel. Thus, it is the responsibility of the government to promote the use of the renewable source of energy in the mainstream market. Moreover, it is also one of the key responsibilities for the government to enhance the use of the renewable source of energy as the leading energy source in the country. This will help to reduce the dependency on the fossil fuels, which will in turn reduce the rate of emission and pollution. Raising public awareness Government should also initiate the policy of public awareness in order to increase the awareness of the common people regarding the degradation of the environment and climate change. The more aware will be the public in due to the environment, the more will be the chance of sustainable development. Common people having awareness will be more attracted towards the sustainable development. Promotion of the advanced public transport Public transport should be promoted in order to de-motivate the common people from using their private cars. Thus, it is important for the government to initiate more advanced public transport systems. In addition, the fare of the public transport system should be subsidized by the government in order to attract more people to use the public transport. The more will be the use of the public transport, the less will be the congestion in the road and less pollution. Conclusion Thus, from the above discussion it can be concluded that, China being one of the leading developing countries and having largest population in the world, they are more vulnerable to the climate change. This report discussed about the potential threats to be faced by China from climate change. Moreover, the responsible stakeholders that are responsible for the climate change in China are also being discussed in this report. In accordance to that, various recommended steps are being discussed in this report, which will help to regulate the impact of the climate change on the country. Reference Adger, W.N., Barnett, J., Brown, K., Marshall, N. and O'brien, K., 2013. Cultural dimensions of climate change impacts and auditing.Nature Climate Change,3(2), pp.112-117. Baatz, C., 2013. Responsibility for the past? Some thoughts on compensating those vulnerable to climate change in developing countries.Ethics, Policy Environment,16(1), pp.94-110. Bakker, S. and Trip, J.J., 2013. Policy options to support the adoption of electric vehicles in the urban environment.Transportation Research Part D: Transport and Environment,25, pp.18-23. Collins, M., Knutti, R., Arblaster, J., Dufresne, J.L., Fichefet, T., Friedlingstein, P., Gao, X., Gutowski, W.J., Johns, T., Krinner, G. and Shongwe, M., 2013. Long-term climate change: projections, commitments and irreversibility. Den Elzen, M.G., Olivier, J.G., Hhne, N. and Janssens-Maenhout, G., 2013. Countries contributions to climate change: effect of accounting for all greenhouse gases, recent trends, basic needs and technological progress.Climatic Change,121(2), pp.397-412. Dulal, H.B. and Akbar, S., 2013. Greenhouse gas emission reduction options for cities: Finding the Coincidence of Agendas between local priorities and climate change mitigation objectives.Habitat International,38, pp.100-105. Grimm, N.B., Chapin, F.S., Bierwagen, B., Gonzalez, P., Groffman, P.M., Luo, Y., Melton, F., Nadelhoffer, K., Pairis, A., Raymond, P.A. and Schimel, J., 2013. The impacts of climate change on ecosystem structure and function.Frontiers in Ecology and the Environment,11(9), pp.474-482. Haddeland, I., Heinke, J., Biemans, H., Eisner, S., Flrke, M., Hanasaki, N., Konzmann, M., Ludwig, F., Masaki, Y., Schewe, J. and Stacke, T., 2014. Global water resources affected by human interventions and climate change.Proceedings of the National Academy of Sciences,111(9), pp.3251-3256. Hagemann, S., Chen, C., Clark, D., Folwell, S., Gosling, S.N., Haddeland, I., Hannasaki, N., Heinke, J., Ludwig, F., Voss, F. and Wiltshire, A., 2013. Climate change impact on available water resources obtained using multiple global climate and hydrology models.Earth System Dynamics,4, pp.129-144. Hanewinkel, M., Cullmann, D.A., Schelhaas, M.J., Nabuurs, G.J. and Zimmermann, N.E., 2013. Climate change may cause severe loss in the economic value of European forest land.Nature Climate Change,3(3), pp.203-207. Holden, E., Linnerud, K. and Banister, D., 2017. The imperatives of sustainable development.Sustainable Development,25(3), pp.213-226. Hu, X. (2018).Where will climate change impact China most?. [online] World Economic Forum. Available at: https://www.weforum.org/agenda/2016/04/where-will-climate-change-impact-china-most/ [Accessed 16 Jan. 2018]. Kurukulasuriya, P. and Rosenthal, S., 2013. Climate change and agriculture: A review of impacts and adaptations. Muttarak, R. and Lutz, W., 2014. Is education a key to reducing vulnerability to natural disasters and hence unavoidable climate change?.Ecology and Society,19(1). ONeill, B.C., Kriegler, E., Riahi, K., Ebi, K.L., Hallegatte, S., Carter, T.R., Mathur, R. and van Vuuren, D.P., 2014. A new scenario framework for climate change research: the concept of shared socioeconomic pathways.Climatic Change,122(3), pp.387-400. Singh, S.S., Singh, A.K. and Sundaram, P.K., 2014. Agrotechnological options for upscaling agricultural productivity in eastern indo gangetic plains under impending climate change situations: A review.Journal of Agrisearch,1(2), pp.55-65. Tie, S.F. and Tan, C.W., 2013. A review of energy sources and energy management system in electric vehicles.Renewable and Sustainable Energy Reviews,20, pp.82-102. Urry, J., 2015. Climate change and society. InWhy the social sciences matter(pp. 45-59). Palgrave Macmillan, London. Wheeler, T. and Von Braun, J., 2013. Climate change impacts on global food security.Science,341(6145), pp.508-513. Ye, X., Zhang, Q., Liu, J., Li, X. and Xu, C.Y., 2013. Distinguishing the relative impacts of climate change and human activities on variation of streamflow in the Poyang Lake catchment, China.Journal of Hydrology,494, pp.83-95.

Audit Solutions for Chapter Essay Example

Audit Solutions for Chapter Paper I Focused on short-term prices; failed to perform long-term growth analysis; abdicated all responsibilities to management as long as stock price increased. Board of Directors Broad Role: the major representative Of stockholders to ensure that he organization is run according to the organization charter and there is proper accountability. Specific activities include: * Selecting management. * Reviewing management performance and determining compensation. Declaring dividends * Approving major changes, e. G. Mergers * Approving corporate strategy * Overseeing accountability activities. Inadequate oversight of Approval of management compensation plans, particularly management. Stock options that provided perverse incentives, including incentives to manage earnings. Independent, often dominated by management. * to spend sufficient time or have sufficient expertise to perform duties. * Continually re-priced stock options when market price declined. Management Broad Role: Operations and Accountability, Managing the organization effectively and provide accurate and timely accountability to shareholders and other stakeholders, Specific activities include: * Formulating strategy and risk appetite. Implementing effective internal controls. Developing financial reports. * Developing other reports to meet public, stakeholder, and regulatory requirements. I ;k Earnings management to meet analyst expectations. Granduncle financial reporting. Pushing accounting concepts to achieve reporting objective. * Viewed accounting as a tool, not 3 framework for accurate reporting. Audit Committees Of the Board of Directors I Broad Role: Provide oversight of the internal and external audit function and the process Of preparing the annual accuracy financial statements and public reports on internal control. We will write a custom essay sample on Audit Solutions for Chapter specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Audit Solutions for Chapter specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Audit Solutions for Chapter specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Specific activities include: Selecting the external audit firm. * Approving any non-audit work performed by audit firm. Selecting and/or approving the appointment of the Chief Audit Executive (Internal Auditor), * Reviewing and approving the scope and budget of the internal audit function. * Discussing audit findings with internal auditor and external auditor and advising the Board (and management) on specific actions that should be taken. * Similar to Board members did not have expertise or time to provide effective oversight of audit functions. Were not viewed by auditors as the audit client, Rather the power to hire and fire the auditors often rested with management. I Self-Regulatory Organizations: CPA, FAST Broad Role: Setting accounting and auditing standards dictating underlying tangential reporting and auditing concepts. Set the expectations of audit quality and accounting quality. Specific roles include: * Establishing accounting principles ;k Establishing auditing standard s ;k Interpreting previously issued standards * Implementing quality control processes to ensure audit quality, * Educating members on audit and accounting requirements. Peer reviews did not take a public perspective; rather than looked at standards that ever developed and reinforced internally. ;k CPA: Leadership transposed the organization for a public Organization to a trade association that looked for revenue enhancement opportunities for its members. Did not actively involve third parties in standard setting. FAST: Became more rule-oriented in response to (a) complex economic transactions; and (b) an auditing profession that was more oriented to pushing the rules rather than enforcing concepts. * FAST: Pressure from Congress to develop rules that enhanced economic growth, e. . Allowing organizations to not expense stock options. Other Self-Regulatory Organizations, e. G. NYSE, NASA Broad Role: Ensuring the efficiency of the financial markets including oversight of trading and oversight of companies that are allowed to trade on the exchange. Specific activities include: * Establishing listing requirements including accounting acquirement, govern ance requirements, etc. * Overseeing trading activities, Pushed for improvements tort better corporate governance procedures by its members, but failed to implement those same procedures for its governing board, management, and trading specialists. Regulatory Agencies: the SEC Broad Role: Ensure the accuracy, timeliness, and fairness of public reporting of financial and other information for public companies. Specific activities include: * Reviewing all mandatory filings with the SEC, * Interacting with the V-CAB in setting accounting standards, k Specifying independence standards required of auditors that report on public financial statements, * Identify corporate frauds, investigate causes, and suggest remedial actions. Identified problems but was never granted sufficient resources by Congress or the Administration to deal with the issues. External Auditors I Broad Role: Performing audits of company financial statements to ensure that the statements are free of material misstatements including misstatements that may be due to fraud. Specific activities include: * Audits Of public company financial Statements, * Audits Of non-public company financial statements, * Other accounting related work such as tax or consulting. Pushed accounting concepts to the limit to help organizations achieve earnings objectives. Promoted personnel based on ability to sell non-audit products. Replaced direct tests Of accounting balances with a greater use of inquiries, risk analysis, and analytics. * Failed to uncover basic frauds in cases such as World and Healthful because fundamental audit procedures were not performed. Internal Auditors I Broad Role: Perform audits of companies for compliance with company policies and laws, audits to evaluate the efficiency of operations, and audits to determine the accuracy financial reporting processes. Specific activities include: * Reporting results and analyses to management, (including operational management), and audit committees, Evaluating internal controls. Focused efforts on t)operational audits and assumed that financial auditing was addressed sufficiently by the external audit function. Reported primarily to management with little effective reporting to the audit committee. In Some instances (Healthful, World) did not have access to the corporate financial accounts. I 2-3. The board of directors is often at the top of the list when it comes to responsibility for corporate governance failures. Some of the problems with the road Of directors included: * Inadequate oversight Of management. * Approval of management compensation plans, particularly stock options that provided perverse incentives, including incentives to manage earnings. Non-independent, often dominated by management. * Did not spend sufficient time or have sufficient expertise to perform duties. * Continually re-priced stock options when market price declined. 2-4. Some of the ways the auditing profession was responsible were: * Too concerned about creating revenue enhancement opportunities for the firm, and less concerned about their core services or talents * Were willing to push counting standards to the limit to help clients achieve earnings goals Began to use more audit Shortcuts such as inquiry and analytical procedures instead to direct testing to account balance. ;k Relied on management representations instead of testing management representations. * Were too often advocates of management rather than protectors of users. 2-5. Cookie jar reserves are essentially liabilities or contra-assets that companies have overestimated in previous years to use when times are tougher to smooth earnings. The rationale is that the funds are then used to smooth earnings in he years when earnings need a boost. Smooth earnings typically are looked upon more favorably by the stock market An example of a cookie jar reserve would be over-estimating an allowance account, such as allowance for doubtful accounts. The allowance account is then written down (and into the income statement) in a bad year. The result is to increase earnings in the subsequent year. 2-6. Seers should expect auditors to have the expertise, independence, and professional skepticism to render an unbiased and justified opinion on the financial statements. Auditors are expected to gather sufficient applicable evidence to render an independent opinion on the financial statements. 2-7. The Serbians-Cooley Act was designed to clean-up; corporate America, especi ally in the realms of financial reporting. The overall intent was to encourage better corporate governance; to make the audit committee the auditors client; encourage the independence and oversight of the board, and improve the independence of the external audit profession. There were certainly many factors that led to the Serbians-Cooley Act, but the failures at Enron and World will probably be pointed to in the future as the major factors that led o the act being passed when it was. The Congress intended to develop a new reporting process that would provide just cause for the public to again trust financial statements and the audit processes leading up to the audit opinion. 2-8. The PEPCO is mandated by Congress to set standards for audits of public companies and perform quality control inspections of CPA firms that audit public companies. In order to carry out these responsibilities, the APACE requires all firms that audit LIST. Listed (public) companies to register With it. It performs annual inspections on all audit firms that audit more than 100 public companies each year. It performs less frequent inspections, usually once every three years, for audit firms that audit less than 100 companies annually. The PEPCO issues Inspection Reports for each inspection that is performed. The first part describes problems they encountered in their review;. 5 of audits and that part is made public. The second part describes problems that the firms have with their quality control process. The second part is not issued publicly unless the firms fail to address the problems pointed out within a reasonable time frame usually no more than a year. 2-9, Management has always been responsible for fairness, completeness, and accuracy attitudinal statements, but the Serbians-Cooley Act goes a step further by requiring the CEO and COOP to certify the accuracy of financial statements with criminal penalties as a punishment for materially misstated statements. The CEO and COOP must make public their certifications and assume responsibility for the fairness of the financial presentations. It thereby encourages organizations to improve their financial reporting functions. 2-10. Whistle blowing enables violations of a companys ethical code to be reported to appropriate levels in an organization, including the audit committee. Because of its presence, potential violators know that there is a real possibility and simple avenue by which inappropriate actions may be revealed. As such, it contains a preventive component that is indirectly helpful to the audit committee in fulfilling its corporate governance role. 2-11. There are a number of provisions that are designed to increase auditor independence. First, Rule 201 Of the Act prohibits any registered public accounting firm from providing many non-audit services to their public audit clients. Second, the audit committee became the client instead of management, and only the audit committee can hire and fire auditors. Third, audit partners are required to rotate every five years. Finally, the auditors are expected to follow fundamental principles of independence that have been enacted by the SEC (more details in Chapter 3). 2-12. Management is responsible for issued financial statements. Although other parties may he sued for what is contained in the statements, management is ultimately responsible. Ownership is important because it establishes responsibility and accountability, Management must set up and monitor financial reporting systems that help it meet its reporting obligations. It cannot delegate this responsibility to the auditors, 2-13. An audit committee is a subcommittee of the board of directors that is composed of independent, outside directors. The audit committee has oversight responsibility (on behalf of the full board of directors and its stockholders) for the outside reporting of the company (including annual financial statements); risk monitoring and control processes; and both internal and external audit functions. 2-14. An outside director is not a member of management, legal counsel, a major vendor, outside service provider, former employee, or others who may eave a personal relationship with management that might impair their objectivity or independence. The audit committee is responsible for assessing the independence of the external auditor and engage only auditors it believes are independent. Auditors are now hired and tired by audit committee members, not management. The intent is to make auditor accountability more congruent with stockholder and third-party needs. 2-15. The primary point of this question is for students to understand that the audit committees role is one of oversight rather than direct responsibility, Poor example, management is responsible for the fairness of the financial statements. Auditors are responsible for their audit and independent assessment of financial reporting. The audit committee is not designed to replace the responsibility of either of these functions. The audit committees oversight processes are to see that the management processes for financial reporting are adequate and the auditors carry out their responsibilities in an independent and competent manner. -16. The audit committee has the ability to hire and fire both the internal auditor and the external auditor _ However, in the case Of the internal audit unction, the audit committee has the ability to hire and fire the head of internal audit as well as set the audit plan and budget. The audit committee does not control regulatory auditors. But should meet with regulatory auditors to understand the scope of their work and to discuss audit findings with them. 2-17. The Serbians-Cooley Act applies only to public companies. Therefore, the Act does not require non-public companies to have audit committees. That is not to say that it does not happen or is not a good idea, however. Most stakeholders want an independent party to ensure that their interests are being considered, The CPA recommends audit committees tort smaller public companies. 2-18. The external auditor should discuss any controversial accounting choices with the audit committee and must communicate all significant adjustments made to the financial statements during the course of the audit In addition, the processes used in making judgments and estimates as well as any disagreements with management should be communicated. Other items that need to be communicated include: * All adjustments that were not made during the course Of the audit, Difficulties in conducting the audit, * The auditors assessment Of the accounting principles used and overall airiness of the financial presentation, * The clients consultation with other auditors, * Any consultation with management before accepting the audit engagement, * Significant deficiencies in internal control. 2-19. The audit committee needs to ensure that the auditor is independent with respect to the annual audit. In order to ensure that independence, the audit committee must consider all other services that might be performed by the external auditor and approve any such services, in advance. Fifth audit committee approves the services, they are in essence saying that the provision of he services will not impair the auditors independence. 2-20. Good governance is important to the external auditor for a number of reasons, including, but not limited to the following. Good governance ;k usually leads to better corporate performance, * reflects a commitment to a high level of ethics, integrity, and sets a strong tone for the organizations activities, ;k requires a commitment to financial reporting competencies and to good internal controls, * reduces the risk that the company will have materially misstated financial statements. If a client does not have good governance, there are greater risks associated tit the client. Boor example, their poor performance may lead to financial failure and lack of payment of the audit fee. Or their poor governance may lead to improprieties in financial reporting Which puts the auditor at risk in terms Of litigation (if the improprieties go undetected by the auditor). 2-21. The auditor might utilize the following procedures in determining the actual level of governance in an organization: * observe the functioning of the audit committee by participating in the meetings, noting the quality of the audit committee questions and responses, interactions with management regarding issues related to the audit, e. . Providing requested information on a timely basis, * quality of financial personnel in making judgments, * accounting choices that tend to push the limits towards aggressiveness or creating additional reported net income, the quality of internal controls within the organization. Review the minutes of the board of directors meetings to determine that they are consistent with good governance, review internal audit reports and especially determine the actions taken by management concerning the internal auditors findings and recommendations, * review the compensation plan for top management, k review management expense reimbursements to determine (a) com pleteness of documentation, (b) appropriateness of requested reimbursement, and (c) extent of such requests. ;k review managements statements to the financial press to determine if they are consistent With the companys operations. -22. Good corporate governance is correlated With increased corporate performance as measured by return on equity, or return on capital. Generally, good corporate governance reduces audit risk as it is less likely that the organization will suffer from problems of management integrity, or would have n environment that might allow or permit fraud. Less audit risk implies that the amount of work to render an opinion on the financial statements would also be less than that required for a company with poorer corporate governance. 2-23. The three categories of audit standards are general standards, fieldwork standards, and reporting standards. General standards cover the characteristics of the auditor technical training and proficiency, independence, and due professional care, Fieldwork standards provide guidance concerning planning and performing the audit. Reporting standards cover the essential elements of he auditors communication, including the opinion, the criteria against which the assertions were tested, and an explanation of the basis for the testators opinion. -24. Due professional care is the expectation that an audit will be conducted with the skill and care of a professional. The standard of due professional care plays a role in litigation against auditors. Plaintiffs will try to show that the auditor did not do what a reasonably prudent auditor would have done. To evaluate the standard, a third-party also decides whether someone with similar skills in a similar situation would have acted in the same w ay. -25. There are three important dimensions identified in Exhibit 2. : * Scope of Information on which assurance is provided, * Nature of Organizations on which assurance is provided, Company being audited. * Domicile of These three dimensions influence the identification of applicable auditing standards as follows: A U. S. Public company filing annual reports follows PEPCO standards. U. S. Non-public company issuing financial statements, follows CPA standards, A foreign company tiling financial statements in a different country follows International Standards or the standards of that country, * IS. S, companies reporting on other than financial information follows CPA Attestation or Assurance Standards, 2-26. Poor the most part, the standards issued by the SAAB are quite similar to that of the two LLC. S. Based audit standard setters. They differ in the following major ways: * The auditor must assess the appropriateness Of the accounting framework against which the audit opinion will be given (U. S. Standards require only that the auditor communicate if the accounting is not consistent With LIST. IGMP. ) SAAB utilizes a concept of Professional Skepticism rather than independence. The SAAB utilizes a concept of reasonable assurance compared with the U. S. Evidence on sufficiency of audit evidence and due professional care, *The AIMS standards include both audit standards and assurance standards. 2-27. The SAAB Audit Standards are quite consistent with that of the PEPCO as well as that of the CPA. Most of the concepts are the same, but are stated differently. They are very similar in the following ways: ;k Requirement of independence, * Gathering and evaluation of sufficient evidence, ;k Documentation of audit work, * Audit designed to minimize audit risk, ;k Due professional care vs.. Seasonable assurance, * Nature of the audit report The CPA and the SAAB have announced a plan to work towards convergence of existing and future standards. The PEPCO has not yet announced a plan for convergence. 2-28. An audit engagement applies to the development Of an opinion on an organizations financial statements. It is planned that the financial statements Will be used by t hird parties Who do not hue direct access to client data. The audit engagement is a form of positive assurance in which an opinion must be rendered. An assurance engagement differs from an audit in a number of important dimensions: It can apply to almost any assertion that management wants to make as long as there is agreed-upon criteria by which to test managements assertion. It is preferable that the criteria are generally accepted. * An assurance engagement generally requires a third party (although assurance can also be provided to the audit client), but it is an identified third-party as opposed to a potential user of financial statements, Assurance can be given on individual items of a companys financial statements, rather than the full set of statements. -29. Assurance engagements are designed to provide positive assurance, i. . The item being attested to is either properly presented, or is not properly presented. Poor example, one of the Big 4 firms provides assurance to the audience that the votes are properly maintained and counted for the Emmy Awards _ A limited assurance engagement does not contemplate a full audit or assurance engagement such that sufficient information (evidence) is gathered to warrant a positive statement about Whether the item being assured is, or is not, properly presented. Rather, based on a more limited amount of work. He auditor either states that nothing came to his or her attention based on the emitted procedures that indicates something is not fairly presented. This is often referred to as negative assurance. An even more limited assurance engagement is one in which the accountant expresses no assurance whatsoever on the item being reported. * Auditing Standards apply to the auditors task of developing and then communicating an opinion on financial statements and, where applicable, independent opinions on the quality of an organizations internal control over financial statements to the board, management, and outside third parties. Assurance Standards apply the auditors task of developing and communicating n opinion on financial information outside of the normal financial statements, or on non-financial information to management, the board, and outside third- parties. Assurance services are engagements in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users about the outcome of the evaluation or measurement of a subject matter against criteria. Attestation Standards is a term used by the CPA to describe assurance services that involve gathering evidence regarding specific assertions and communicating an opinion On the fairness Of the presentation to a third party. k Compilation and Review Standards refer to CPA Standards that apply only to non-public companies where the board or a user has requested some assurance on the fairness of presentation financial statements. These are referred to as negative assurance standards because the auditor does not gather enough evidence to support a statement as to whether the financial statements are fairly presented. -31. Independence means objectivity and freedom from bias. The auditor can favor neither the client nor the third party in evaluating the fairness of the financial statements The auditor must be independent in fact and in appearance. Independence in fact means the auditor is unbiased and objective. An auditor could be independent in tact it he or she owned a few shares of co mmon stock in an audit client, but might not appear independent to a third party. Independence in appearance means that a third party with knowledge of the auditors relationship with the client would consider the auditor to be independent. Professional skepticism, as used in the standards promulgated by the PASS, has a broader meaning in that it refers to all of the factors that valued affect an auditors ability to exercise proper skepticism in an audit engagement. The actors to be considered Vary from those associated With the individual, such as objectivity, to those associated with the structure of the firm. These are similar to the independence standards that emphasize both audit firm relationships to the client as well as objectivity. However, the SAAB emphasis on professional skepticism goes a bit further: an auditor could be Objective, but not necessarily exercise professional skepticism, i. E. Being open to potential explanations of events that are not consistent with the auditors prior experiences. Professional skepticism appears to be a broader term than independence.

How Hair Detangler Works and Recipes to Make It

How Hair Detangler Works and Recipes to Make It If you have long hair, chances are youve experienced the pain and frustration of trying to comb out snarls. Hair detangler is like a magical elixir, able to smooth away your cares with the spritz of a pump or wave of your hand. How does it work? Its an example of chemistry in action. Hair Detangler Basics Although there are many possible ingredients in hair detangler, they all work by altering the surface of your hair. Hair detangler is a type of hair conditioner that smooths your hair by coating it with an oil or polymer and/or by acidifying it so that the hairs surface tightens up, smoothing the scales on the hairs outer surface or cuticle and imparting a positive electrical charge to prevent the static that can worsen tangles. Common Chemicals in Hair Detanglers If you check the ingredients list of a hair detangler, youll likely see one or more of these ingredients: Silicone (e.g., dimethicone or Cyclomethicone), a polymer that adds gloss to hair by binding to its surface.Acidifier, a ​chemical that lowers the pH of the detangler, strengthening the hydrogen bonds between keratin molecules in hair, smoothing and tightening each strand.Hydrolyzed Protein helps to repair damaged keratin, smoothing the broken edges so strands of hair dont catch on each other as much.Cationic Surfactants binds to the negatively charged keratin, becoming the new smoother surface of the hair.Oils fill in the pores of dry or damaged hair, making it softer, more pliable, and less likely to tangle. Homemade Hair Detangler If you dont have detangler on hand, you can mix up some yourself. There are several options: Dilute regular hair conditioner. Spritz a mixture of 2 tablespoons conditioner in 16 ounces of water onto damp hair.Fill a spray bottle with the following herbal hair detangler mixture: 8 ounces distilled water1 teaspoon aloe vera gel10-15 drops grapefruit seed extract1-2 drops glycerin1-2 drops essential oil (e.g., lavender, jojoba, chamomile) Rinse hair with rainwater (usually acidic) or make your own acidifying rinse by adding 2 tablespoons apple cider vinegar to an empty 20-ounce water bottle. Fill the remainder of the bottle with water and use the mixture to rinse clean hair.Rub tangled dry hair with a dryer sheet prior to combing it out.

How has the world changed for hospitals Essay Example | Topics and Well Written Essays - 750 words

How has the world changed for hospitals - Essay Example Based on that, the existence of technological gadgets such as smart phones, tablets and other smart devices has had an impact in the overall running of hospitals. These gadgets not only act and/ or are used as mini computers (small computers) but they can also be used by medical staff to report immediate issues; send emails to other colleagues; chat online; communicate through instant messaging; make urgent calls and even do online research. With regard to online medical research, the dawn of the internet as well as the information age has enhanced all forms of research to be conducted online. For example, if a medical student or a registered nurse (RN) wanted to conduct online research, they could be in a very comfortable position to use their hand held gadgets to perform these tasks. A number of medical technologies have also taken the form of â€Å"smart† equipments. This means that the medical equipment being utilized by practice not only undertakes its usual tasks, but it also tends to perform computing requirements, evaluation as well as analytical operations to the data and information provided to it by the practitioner in the hospital. A good example is the implementation of electronic health records (EHR). These digital health records have the capability to capture all of patient information. In addition to that, they also have the ability to evaluate the data and information that doctors feed to their database. That is, they can be in a position to evaluate whether the prescription given to the patient is valid or not. If not valid, EHR can be in a position to notify by sending messages to the user informing them that the information provided is incorrect. Hence, the user can be in a position to correct the information provided. More to that is th e fact that each time better equipment is unleashed by medical equipment manufacturers that promises to work and perform even better and faster than the previous equipment. As