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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.
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.
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Instability prevailing within the banking system can lower the growth of a country by causing higher uncertainty. However such banking regulations proved to be less influential during the occurrence of the current financial crisis. Such banking regulations could not prevent the crisis which resulted from the recent economic downturns and overall global meltdown.
If one takes into consideration the economic developments wrenched in the last three decades, one notices a significant breakthrough as to studying the relationship between knowledge and economic growth on one hand and between innovation and economic growth on the other hand.
The timing and measurement of revenue, and the associated expenses, are subject to detailed guidance in the GAAP and general guidance in the IFRS, which specifies the conditions for recognizing revenue before, at, and after the time of sale. The seller necessity is to have earned revenues in the sense that it has performed, or substantially performed, its obligation to the buyer, and it can constantly estimate the cash or cash equivalent value of assets received from the customer.
A futures contract would give the fund managers the obligation to buy or sell. This option would give the managers the ability to hedge against future economic risks by enabling them the option of exercising the contract at the end or prior to the settlement date, the holder of a futures position has to offset his position by selling a long position.
Social Accountability
Introduction
Since the emergence of economic crisis, the concept of Corporate Social Responsibility (CSR) and social accountability has emerged as an important consideration amongst the corporate member and regulators around the world.
The benefits of diversification into foreign markets are explained by the standard portfolio theory of the finance and investment economics. This theory provides evidence of the apparent economic gains associated with investing in foreign equities. The systematic risk of foreign investment is lower.
Countries should always attempt to borrow external resources at an affordable rate of interest, which would make the debt service obligations easier to handle. India’s external debt burden has been moderate for the last few years. As of 2011, it stood at US $ 305.9 billion, which amounted to 17.3 percent of the GDP.
The rationale behind a firm valuation is that the value of a firm can easily be destroyed with financing or investments methods, and ill-judged acquisitions. The valuation of a business is highly dependent on the purpose. These purposes may include: valuing a target of acquisition, valuing a company in distress, and valuing a private company.
It is a well recognised fact that for a company to be successful it needs to protect the interest of the stakeholders, employees, internal as well as external customers and the environment in and around the company (Broadley, 2006). Foreign investors feel better in an environment where the basics of the corporate governance is defended and practiced.
Although both projects are yielding a negative NPV, but the second option is giving a smaller negative number, hence we can safely conclude that the company should wait for 5 more years before buying the latest technology crane ALII. NPV shows us that the project would yield more cash inflow than outflow, but the negative number shows us that the outflows would be greater than the inflow.
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The world of accounting is subject to change. The accounting professionals used to conduct research to make the process of accounting more robust. The accounting process needs to be a perfect one as all the stakeholders of the company are depending on the financial statements produced by the company accountants.
Would IT costs be operational or fixed, or would these costs be allocated in a lump sum or on a granular level. This essay aims to evaluate the processes in allocation of IT costs and the purpose why it is required. The paper will also evaluate the benefits and how organizational decisions can affect cost allocation.
The paper is in a position of defining the internal audit’s scope, authority to the acquiring of resources and information, as well as a proper structure of reporting to the executive. It also means that the individuals involved do not assess their individual work or even that of those to that they are answerable.
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It is not easy to escape the requirement for personal investment and financial. In this time, world economies have advanced to an extent that the affordability of the State support at times of infirmity, unemployment or old age is being questioned since it is driven in large part by the desire to adjust and adapt to the demographic challenges.
The IASB implements the IFRS, replacing the successful IAS, to improve comprehension and information transfer among the different users of the financial statements. The research centres on the IASB implemented of the IFRS. The research focuses on the IASB implementation of the objective and rationales (including characteristics) to heighten the professional look of the financial statements in terms of usefulness to the financial statement users.
It has been recognized that the main source of the Eurozone debt crisis was largely due to the vulnerability of individual financial systems that were possessed by each Eurozone country. For instance, the unsustainable budget deficit in Greece and the large public debt in Portugal contributed significantly towards the debt crisis of the Eurozone.
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The European debt crisis brings as a result of how Europe had made an attempt to solve the financial crisis faced by most countries and as a result an immediate end to their prosperity and put them in great debt. In an attempt by European to defend itself against collapse has created a new crisis untenable and into debts that are not easily serviceable.
The extra fund to be allocated to the security operation will cost the state more they can by raising through taxation and the federal government local government pass fund. This fund has remained noncommittal to adding to the state with more funds, rather, it has adopted a policy to reduce states funding. An external way is proposed to finance the budget deficit financed by a collection of taxes.
The interconnectivity that comes with technology enables easy access to people and markets across borders. Globalisation in financial terms refers to “intensification and stretching of economic interrelations across the globe” (Steger, 2010, p. 49). Globalisation simply refers to opening up of trade avenues, development of advanced means of communication, internationalization of financial markets, and increased movement of persons, goods, capital, and data across the world (Scholte, 2005).
The three companies chosen for financial analysis are Accenture, Wal-Mart, and McDonald’s. “Accenture is a global management consulting, technology services and outsourcing company, with 257,000 people serving clients in more than 120 countries” (Accenture, 2012).
The operations of public accountants are stipulated by state law and must meet the set codes. On the other hand, private accounting refers to the act of a salaried individual accountant being employed by a specific firm to handle its accounting functions (Warren 6).
Sentiments by economist such as Milton Friedman have attempted to assert that profitability is the core agenda for businesses (Friedman, 1970). However, contemporary businesses have the potential to engage in social responsibility and spur profit growth. Introduction The mix of ethics and business in the same breadth is at times seen as an oxymoron.
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In addition to administrative and statutory regulatory provisions, the banking industry has been subject to pervasive “informal” regulation. The major argument against the government’s involvement in this industry has been that the government interrupts private industries. Critics of the bailout programs argue that free markets ought to establish which banks carry on, which fail, etc.
The trends for the foreign exchange indicate that XJP lost 60 million Renminbi in 2003 and other 70 million in 2004 (Moffett, Stonehill & Eiteman, 2008, p. 253). Foreign exchange gains and losses have a significant impact for XJP’s corporate performance, since it fully depends on how the foreign currencies behave towards each other to make its profits or suffer losses.
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There should be an improvement in work and authority to facilitate the gap between the management and workers in terms of critical decisions. Furthermore, there is also the case of self-payment of post-employment benefits through fictitious accounts that may require the implementation of systems that guard against such actions.
The underdeveloped countries will be represented by Nigeria. I will get the prices of the respective currencies from the financial exchange website and graph the data. The data to be considered will be from June 2008 until June 2012. In order to get credible data, I will retrieve data from the New York Stock Exchange Market, Frankfurt Stock Exchange, London Stock Exchange.
The profit margin dropped from 17.78% in 2009 to 14.85% in 2010. This shows that the company is experiencing serious problems, for example, because of increased operating costs. This trend, if it continues, will send a very negative message to the potential investors as well as the current shareholders since it may lead to a reduction in their returns.
In the year 2001, a widespread evaluation regarding the IAPC was commenced and in the year 2002, it was re-established as the IAASB. In the year 2003, IAPC was accepted as a series of restructuring regarding the auditing guidelines to further reinforce the setting-standard procedures. The IAASB mainly contributes to delivering auditing process-related information clearly to the public as much as possible.
The other structural reforms facilitated by the International Monetary Fund in South Korea included the usual: “trade liberalization, capital account liberalization, reform of corporate governance, corporate structure, and the labor market, and the provision of information on foreign exchange reserves and other financial data” (Lim 4).
CORPORATE REPORTING ESSAY Name Module Instructor Date 1. Development of regulation for corporate reporting The idea of the existence of corporate reporting has been said not to be evidence proof or evidence that there will be an accumulation of the benefits that comes with corporate reporting.
Among these statements include balance sheet, income statements and cash flow. Practically, financial ratios are calculated to help in analyzing trends, as well, as to conduct a comparison of the company’s financial performance with other companies in the same industry (Lewellen, 2004).
Whoever undertakes to audit the legal issues should have a clear target of evaluation and analysis. Should be bound to given cord of principals in his attempt to come up with the analysis and research (Guta, 2004, p.341). Some of the values expected of the professional accountants are integrity, having the objective in the work they undertake, practicing the independence during the execution of the duty, generating the confidence in the analysis they do, and also should show or should be a professional in the field of law.
Global Hardwood Company (GHC) is an international company that operates in more than one country. The company began as a single-family business but it expanded and became a public limited establishment. The GHC is headquartered in an attractive marketplace within the town of the English Midlands.
Bankers and policymakers, of late, have been keen to make clear commitments to lift debilitating uncertainties that have weighed down on the global financial systems. Globalization seems to be in retreat with de-globalization being in vogue, especially with countries that remained insulated as far as their financial systems are concerned; for example, China and India, suffering the least damage economically.
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Companies are supposed to adopt integrated approaches to build a strong framework with IFRS. To b in a position to achieve this, they require to be having a fully a solution that is fully integrated that should be ideal to support the adoption of IFRS. Adoption of both IFRs and VAS calls for technical, operational, and strategic changes.
As time passes on, the roles of the accountant keep changing. In addition, they become more diversified enabling the roles of the accountant to be viewed in varied forms of activities. Management accountant hence applies several forms of concepts and practices in the process of budgeting.
There have been arguments that it is impossible to produce fair value information where activity level reduces. However, the standard gives guidance in this regard. Some arguments indicate that information may not be reliable if entities operate in the same market and arrive at different conclusions on whether there has been a significant decrease in the level of activity
Data of five different stocks have been taken into consideration for the same and 5 years of data have been taken into account. Different statistics provision could be taken into account for the same like Average return, Standard Deviation, Correlation and other.
There are different theories of decision-making presented by different experts. These theories might be found in the existing literature. The proponents of some of the major theories of decision making are G. P. Huber (1981), and T. K. Das and B. S. Teng (1999). The most commonly used models of decision-making are the rational model, the model of bounded rationality, and the garbage can model.
Free cash flow is expressed as cash from operations net of capital expenditures necessary to maintain the company’s growth. Free cash flow= cash from operations- capital expenditures. The free cash flow represents the financial ability of the company; that is its ability to engage in investment activities that go beyond the planned investment activities (Walter, Harrison, & Horngren, 2003).
Notably, Facebook was initially restricted to Harvard students, but has since increased in popularity and it is now used worldwide. Interestingly, it has become popular due to its capability of availing relevant information to users. The social site was founded by Mark Zuckerberg together with other students at Harvard University in the year 2004.
Table 1 reports the results of the Augmented Dickey-Fuller test of unit root for the stock indices and exchange rates of both the UK and Pakistan. The test has further been applied at different levels as well as in the first difference form. The findings will be reported in terms of each country starting with the UK first then Pakistan.
It is prudent for organizations to completely evaluate every capital investment decision through sound appraisal methods. The main reason for doing this is that these investments involve a commitment of large sums of funds; they take a long time, require much commitment from the management and are irreversible.
Studies conducted on various businesses in the Gulf Corporation Council nations provide multiple results. Empirical findings indicate a negative association between family ownership and market performance as per the regression conducted on family-owned businesses in the GCC (Karam, 2010).
The economic power of almost all the individuals in the globe has increased over time. With the rise in purchasing power, the demand for comfort and luxuries has increased significantly. It is reported by many researchers that at present demand for alcohol, especially beer is growing in both the developed and developing economies in the world.
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The various areas in which the auditing function has lacked competency as per the prescribed financial reporting standards have been discussed. The secondary data sources have been used to study the previous studies and the empirical literature on the incompetency of the auditors and the adverse consequences faced by the public due to their activities.
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There are several studies in accounting that have emphasized on the introduction of accounting system in the public sector for sustaining and enforcing the mechanism of competition-based resource allocation. Public sector organizations have also introduced development measurement system and methodologies of performance improvement in order to demonstrate higher accountability.
Business and Strategic Analysis: It includes analysis of a clear statement of the company’s activities, an analysis of the economy, the industry, and the company’s place in the industry, the company’s competitive and corporate strategy, and the implications of all of these for its future profitability.