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This COCO method is thought to be more concrete and user friendly method of Internal accounting control system. The concept of managerial accounting has been mentioned in this COCO framework. What is Internal Control? Internal control can be explained as any action taken by an industry to assist increases the likelihood that the purposes of the industry will be achieved.
The shareholders on the other hand are the business owners since they have vested interests in the running of the business. The external auditors are not associates of the organisation like the internal auditors but their function is more of the same, to look into the organisation’s books of accounts and assess whether a true and fair view and give an audit opinion.
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Tammy should therefore, has to consider other factors such as shipping cost, location of the store, reputation of the brand, service availability and may be other individuals’ experience so as to purchase a better home for entertainment center. SOLUTION 2 Purchasing cost Cash price=$1500+ ($450 for 48 months) =$23,100 Value of the Loan at the End=$4,000 Total Interest= (1500 X .04 X 4) = $240 Buying Cost= (21,600+240)-4000=$19,340 Leasing Cost Lease Payment= (450 X 36) =$16,200 Interest= (500 X .04 X3) =$60 Charges=$600 Leasing Cost= Lease Payment +Interest +Charges Leasing Cost= (16,200+80+600) = $16,860 SOLUTION 3 Purchase price=$180 Rate=5% earned on savings Time=10 years Future value=?
Critically assess how the use of IFRSs contributes to increased transparency for stakeholders, and the extent to which IFRSs can influence economic stability. You should develop your arguments in the context of appropriate accounting theory. The international business scenarios has evolved in the last decades more than it had for many previous years.
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Financial ratio analysis is considered one of the most effective methods of analyzing the financial performance of any company. By systematically using different ratios, an analyst can actually get an insight into the overall performance of the firm while at the same time highlighting the areas where further improvements are required.
BP formulated the main financial management decisions that devoted to a wise use of capital and a careful selection of sources of the capital in order to enable the company to expand in the direction of reaching its goals. The main financial management decisions are grouped into three broad categories that include; Investment, financial and dividend decisions that influence the effectiveness of the BP in the Community.
It also includes the types of markets and the reasons for the valuation of stock at fair prices, higher prices, or lower prices. The reason for including these details in the assignment is that it is necessary to understand the basic information about the behaviors of stock markets before making any decision about the buying and selling decisions.
A better budget relies on realistic assumptions and does not deviate from reality. It incorporates all the matters which are imminent and possibly could happen in the near term. It includes all those matters which are under the control of the company, such as which products to produce, and where to allocate the resources.
As a member of the AICPA, Harold Potter has some responsibilities to his customers and the wider society. This is because the AICPA has rules that each member has to adhere to. In the case at hand, there are nine cogent issues that are either breaches or high risk events that could make Harold Potter liable to several actions by the AICPA which could be as severe as getting his membership taken away from him.
The company has continued to grow over the past years as its lights have never ceased to shine bright due to there positive interaction with their customers and employees. The positive relation with their customers is due to the company’s ability to offer quality services at a fair cost.
These Annual Reports are of great assistance to many different stakeholders and potential investors. The stakeholders and potential investors review these Annual Reports to analyze the current and predict the future performance of an organization by reviewing the trend carried out by the organization and the market trend.
True shareholder value is the most desired position of a firm’s equity and debt to the real replacement value of its assets. According to Copeland, et al (1990), “the most significant factor is that the rate of return on invested capital relative to the weighted average cost of capital and the amount the company invests in new capital at this rate to generate growth” (Armitage & Ha, 1995, p.2).
In order to obtain the economic profits,the cost of capital must be less than the return on the firm’s capital employed.This paper candidly evaluates the uses of Economic Value Added model in a business as well as its strengths and weaknesses.
This is indicated by the performance of the company’s products in international markets, especially the US food and beverage market. The following analysis of the company will be focused on its financial performance and operational performance in the year 2010, with reference to trends developing over the previous 3 years.
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The bank’s formation took place in 1870 amidst economic turbulence. It is at this period in time when socio- economic transformation was radically taking place and industrialization was at the helm. The major driving force to its formation was the dire financial needs that the industries demonstrated.
Most banks have cut down their lending rates by up to 25%, with some going as high as 30% against their former lending portfolios. For many banks, the prospect of dishonored loans has resulted in stringent tactics that are aimed at curbing this crisis and improving their lending services to the few who meet their requirements.
Thus financial reporting framework helps to reduce the information asymmetry that exists between the management and the shareholders. It narrows down the financial knowledge to a level that the shareholders can interpret. Financial reporting is an interpretation that generally applies to transactions, management team uses its knowledge.
An annual report comprehensively provides stakeholders and other interested individuals or institutions an overview of a company’s activities and financial performance throughout a given year, usually the one preceding the current year. As such, annual reports contain reports by the chairperson, the CEO, and the auditor.
It is up to the return expectation and risk appetite of the investor to choose the right product. For high risk taking investors, there are products that invest in stock markets and other volatile markets. Funds that focus on bonds, debt instruments etc. are preferred by low risk taking investors.
It therefore enables borrowers and savers to meet in the most efficient manner. It is also fundamental to note that this market facilitates economic transactions by hedging and trading in resources and goods. An efficient financial market will enable capital allocation to investments that provide maximum return.
Interest rate changes affect individual savers and banks directly and indirectly. The monetary regulatory authority has to consider all these factors before determining the interest rate. I. Long Term Savings and Investment products of retail banks and non-banking financial intermediaries (NBFI’s) Long term investments are those investments which are made for a solid period of time.
The main mission of EITF is to assist the FASB to recognize the rising issues and determine them with a unique set of practices (Financial Accounting Standards Board, n.d.). Influence of Emerging Issues Task Force on Generally Accepted Accounting Standards Emerging Issues Task Force (EITF) was formed by FASB to provide appropriate responses to the rising financial issues as it tries to resolve them without the involvement of FASB.
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There is a strong relationship between risk and return in finance. In fact, most financial theories and assumptions are based on the relationship between risk and return. In very simple financial theory as the risk of an investment increases so does the expectation of return from that entity. Therefore all investments strive to lower their risk to increase the possibility of increasing their investment pool.
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Throughout the years, this act has successfully prevented and managed these illegal practices and in the process has helped maintain the credibility of corporate America. This paper shall discuss the act, including its pertinent details and essential provisions, as well as its reasons for passage and application.
This discussion seeks to answer - How a selected accounting theory has contributed to the development of existing accounting practice? This would show how an accounting theory such as proprietary theory or entity theory could help in the development of accounting practice. The discussion focuses on the strengths, weaknesses and limitations of the proprietary and entity theories.
Mergers and acquisitions have become a new strategy for organizations in the present competitive world to have a firm stand in the market. Organizations struggling to make a mark in the market often take the help of other large organizations to revive their current situations. On the other hand, the company is in a strong position achieve its expansion policies through such strategic measures.
They are made to ensure that the financial statements are based on the matching principle and revenue recognition concept . These requires that revenues be recorded when earned and expenses are matched to the accounting period, when the revenue they helped produce, was earned .
In the year 1979 in their research paper Lev and Sunder raised the issue that the ratio analysis done by the researcher is often motivated by the tradition and convenience, they generally not consider the theoretical background of the variables of the concerned ratio.
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Contents Introduction 2 International Economy 2 Reporting Standards 3 Differences 3 Case Study 4 Inventories 4 Revenue Recognition 5 Introduction The international economic scenario has changed over the past few years. The reason for this change is the advancement of technology and especially information technology.
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In its basic form, cost volume analysis allows the company to understand how the changes in the costs and volumes actually have an impact on the operating as well as net income of the firm. This sort of approach therefore can allow a firm to estimate the level of sales required to generate a specific and targeted level of income.
This creates a risk to sales department that may result to loss of revenue due to misclassification of clients; bad debtors may be classified good thus raising the dad debts percentage within the firm. The firm should identify ways of prescreening new clients, either by examining their previous bank statements, statements of financial position and consulting their business partners to establish their credit rating.
SER support from the various stakeholders is essential for the company in order to ensure that business continues to exist. Stakeholders of the company are varied – they are investors, lenders, creditors, employees, managers, the environment in which the company operates, government, the general public, and the local community.
Damiani Group was founded by Enrico Damiani in Italy, back in 1924 aiming to deliver a wide range of jewelry products. The business has developed itself over the years through its prestigious brands; Salvini, Alfieri, St. John, Bliss, and Calderoni. The company has expanded itself into the overseas market by opening international subsidiaries in the United States, Japan, Switzerland and a few other Asian countries.
It mediates them to financial institutions to realize or implement growth and ambition at the international level. Entities that have not adopted the framework yet should aspire for its implementation through local business organization efforts that would lobby its adoption in the jurisdiction if this is not yet accepted as well as through their own initiatives.
Some of these variances in presentation can be seen in the comprehensive income statement presentation. There are several examples to illustrate this. IFRS 5, for example, requires that post-tax loss/income be part of the disclosures in the statement of comprehensive income or be put in another income statement’s contents where this is applicable.
The conceptual framework convergence process of IASB and FASB has its critics but the both the standard setting bodies aim to increase the comparability of financial disclosures among different countries which serves the investors’ interest. The discussion and development of conceptual frameworks help in understanding and refining the previous theories.
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The vitality and logical structure of the field of accounting makes it an appealing discipline to pursue one’s academic direction and professional life in. I have always valued the acquisition of academic education but believe that professional experience provides a new level of exposure about the processes and modes of performing operations.
A budget is used in business organizations for developing plans for production, sales, training, and almost all other activities. It can be used for managing administrative operations and motivating employees to perform coherently with the organizational goals. It can deliver a criterion where employees are encouraged to achieve their targets.
The risk equation does not define the variables as single numbers in the probability distribution. This risk assessment leads to an output of ranging risks prior to the experiences of the receptors. Proper probabilistic risk assessments require an adequate description of the input parameters. PRA purely employs probability and probability distributions.
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GSK is a UK based MNC which its presence in the pharmaceuticals and consumer health care. The GSK group prepares its consolidated statements in accordance with the IFRS and the company’s financial statements follow the guidelines of UK GAAP. The second part includes the main uses and types of users of accounting information.
In this context of understanding, the pharmaceutical industry will play a prominent role. Two of the giants of this industry are Merck (MRK) and Eli Lily (LLY). Emerging in Germany in 1891, Merck has a long-standing history in chemicals and pharmaceuticals, and today produces over $40 billion in annual revenue.
………………………5 Difference between IFRS and ASPE ……………………………………………………………… 6 Similarities between IFRS and ASPE……………………………………………………………….. 6 Specific Financial Statement Disclosure Issues ……………………………………………….
To bring out these details, the report shall develop a marginal costing statement that clearly points out the cost per unit of producing each item of the new footwear product, a break-even analysis table, and a graph that shows the time that the project will take to break even, a cash budget that shows how cash will be utilized across the first 12 months, etc.
Society can include institutions, social groups, shareholders of organizations, cultures, and society in general. The role of stakeholders in society is the focal point of financial accounting and social and environmental theory. The primary issue concerning social and environmental theory is the way society determines developments, goals, and innovations in accounting practice.
Finance and Accounting
Ratio analysis is a useful tool for analyzing a company, to predict about its future, but the result might get wrong if the factors of the variables are not taken in consideration. LEV and Sunder (1979) raised some basic questions like the structural relationship of the analyzed firms, the size of the firm; these factors are taken in consideration or not.
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Capital budgeting techniques are applied in the determination of projects. There are two major types of capital budgeting techniques. The first types are the non-discounted methods where there is no determination of the present values of the future expected cash flows. Examples here include the payback period and the accounting rate of return.
Over the years, experts have come up with various portfolios in order to allow the investors and observers to determine, manage and minimize the risk associated with certain investments. Standard deviation is one of those tools, which are used widely for risk management of investment portfolios (Crouhy, Galai & Mark, pp, 44-45, 2006; Martellini, Priaulet & Priaulet, pp.
Examples of such property are with the inclusion of land that is held for the prospected use in indefinite future or for the purposes of its appreciation in value, a building being leased under the type of lease known as operating lease or even any given property that has been developed or constructed for future utilisation as an investment property.
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Therefore both companies; Pepsi and Coca-Cola need to be aware of this fact and they should analyze and evaluate their cost of production and operational costs. Management should only take debt if the opportunity cost of the investment is higher than the cost of debt however they have to keep in mind their optimal capital structure.