Importance of sport Essay

Nowadays importance of sports is increasing in the world especially in Pakistan because physical activities are being reduced due to modern techniques and machinery age. At the present time sports is also having high importance equal to education. Our Government is also focusing on the importance of sports so the children should be active and pay attention on importance of sports. Government is also trying to provide us facilities as much as they can. Our government is also making many sport centers all around our country so that citizens take benefits of it and mainly our government had make sports an essential part in our curriculam.Sports is also importance like the education .Educationalist had also discovered that sports are important for our health and our fitness. In the past time we were having limited facilities but now we have more multiple facilities but now there are vast varieties of sports like Cricket, Baseball, Football, Soccer etc†¦.But unfortunately we could not give much time to sports due to indoor games, mobile, net and etc†¦There are many benefits of sports too like playing sports everyday makes us active and healthy which is very much good for our health. Playing sports is essential for everyone in this world because it is the main thing which makes us fit and active in every field of life. We should balance three things in our life the first one is education second one is our prayers and the third one is sports. There are too many benefits of playing sports everyday some of them are as following one of them is greater confidence and self awareness. We can show our talent and our skills to the world which can build good relationships between us and people which build up our confidence level and social contact. We can improve our health, fitness and overall well-being by playing every day early in the morning. If we will not continue this practice in our daily life so we will feel isolated and we will feel loneliness. Playing sports every day will increase our ability to deal with stress and it will reduce the symptoms of anxiety and depression.We should keep playing every day.Someone had said that:†Champions keep playing until they get it right†. It can make our habit of tolerance so that we can accept challenges from others because in sports sometimes someone has to lose or wins that`s why this makes us be patient and tolerant and also makes us to do struggle in the every field of life. The main moral of it is that it makes us to face  challenges and keep motivate us to do more struggle. It is useful means of entertainment and physical activity. This will make us healthy and gives us energy and strength. The main meaning of it is that mental and physical growth. Sports have a quality to build our character. Sports and games give us opportunity to grow our life. During sports there is a benefit that we can learn many things like maintain mental balance and our hopes. Nowadays sports have been commercialized. They have become a good means of earning. Sports have a great importance or have value. The man who does good will be showered with name, fame and wealth. Sports facilities are being developed in rural and urban areas. Sports infrastructure are being developed by many organization which are working day and night on sports facilities for us only so we should take advantage from it. Sports can make us prevent from diseases. It can remove our tiredness and can make us fresh. They can improve our blood circulation. Sports are very much important for our Youth.The sports have other name called bodily exercise. Sports not benefits only body but mind too. The health of the body is essential for success in life. An unhealthy person man is also sad, gloomy and therefore loses his confidence but a healthy man or person will always active and attentive so that’s why he didn’t lose his confidence. The great advantage of Sports is that they combine exercise with thrill and with excitement. Sports develop and encourage the spirit of man.

Stress’ Impact on Student

Stress’ Impact On Student Mentality By Courtney Johnson ,October 16, 2012 It’s that time of year again. The semester’s first round of exams forces students into late night study sessions, shoving activities with friends to the side and creating more stress than students prepare for. Eventually, students stretch themselves so thin that the effectiveness of their work begins to suffer, and their own confidence in themselves starts to lack. This is anxiety’s way of silently creeping into the otherwise happy and healthy student mentality.Most students are able to manage their time and balance their workload with other responsibilities. Yet, there are some students whose lives spiral downward, and they lose the optimistic perspective to assist in effectively managing their time. College students have a high risk of developing a number of different anxiety disorders — a direct result from excess responsibilities in their life. Disorders such as obsessive compulsive disorder, panic disorder and social anxiety disorder can lead to depression, eating disorders and a change in one’s overall health.Yet, college students tend to worry most about their future career, school and friends, classified as generalized anxiety disorder or everyday anxiety. Different people react to this differently: Some cry, some get angry, some lose sleep and others lose their sense of reality completely and become a frazzled robot mechanically going through the motions of everyday life, focusing solely on school and work. While thinking about school and life after college is important, it does not have to be a rat race.With the right perspective and methods for coping with stress, students can learn how to manage their anxiety without feeling overly burdened from school. Popular methods that most students use to aid their anxiety levels are working out and practicing yoga. Working out is a great way to release endorphins in the brain that better oneâ₠¬â„¢s perspective about themselves and their outlook in the world. Yoga is a great weapon against stress because it uses breathing and meditation help to relax the mind and muscles.For students who may have tried these approaches, yet need more encouragement, Boynton Health Service has a mental health clinic that offers a variety of counseling options for students. One of these options that students might find most helpful is the Boynton Mindfulness Group, which â€Å"helps people explore methods for handling stress through mindful awareness. † According to the Mayo Clinic, mindfulness is defined as focused, deliberate attention to a task or thought to quiet the mind and eliminate distractions.Group sessions for the Mindfulness Group at Boynton include meditation strategies and lessons on the difference between responding to stress and reacting to stress. Boynton also offers a specific group for students suffering from severe anxiety, giving them the opportunity to meet and s peak with counselors in person and emergency sessions over the phone. The key to managing stress and anxiety is acknowledging it, speaking up and asking for help. These are all helpful strategies for the myriad of stressed out students silently panicking around every corner of campus this time of year.The University of Minnesota offers a number of services to aid students in managing stress and anxiety when they encounter it. Working out and practicing yoga at home can be just as beneficial; it simply depends on the student’s case. The different pressures placed upon the shoulders of students are very prevalent this time of the semester. Doing well in school is the ultimate goal, but building a case for life post-graduation is important, too. Controlling perspective and learning how to cope with these pressures is the key to minimizing student anxiety. http://www. mndaily. com/2012/10/16/stress%E2%80%99-impact-student-mentality

The Virgin of Vladimir

http://www. flickr. com/photos/t-a-a/5340663023/  Ã‚  Ã‚   The Virgin of Vladimir Byzantine painting was not realistic in its representations of the divine and super natural. (Online Lectures) The final results were paintings and mosaics that had a blending of some naturalistic elements and abstractions. (Online Lectures) The unifying element was that the works were depictions of the Divine for the Church. (Online Lectures) The Virgin of Vladimir an image depicting a mother and child was given to the Russian ruler by the Byzantine emperor somewhere between 1130 and 1135. This image later became known as the Virgin of Vladimir which is believed to have been one of St. Luke’s original paintings painted from real life. (Unknown) As of today it is now considered to be the work of a twelfth century Byzantine artist, to date its true creator is still unknown. This icon has come to be considered the most important and most powerful icon in Russia. (Unknown) This is one of the most copied icons over generations. This icon was credited with protecting Russia in several battles. F. S. Kleiner) Because of this, the Virgin of Vladimir was held in close regards by rulers of Russia. (Unknown) Whenever the capital moved, the icon moved as well. It eventually ended up in Moscow in the late fifteenth century. The Virgin, as seen in the example image that I choose, is holding the child in a tender embrace while looking out to the viewer. It has been said that she is acknowledging Christ’s future sacrifice for all of mankind. This image exhibits all of th e characteristic Byzantine traits: her straight long nose and small mouth, the golden rays in the infant’s drapery; the decorative sweep of the unbroken contour that encloses the two figures; and the flat silhouette against the golden ground. †   (F. S. Kleiner)   This work of art is unified. The artist used actual proportions in this painting; the child is proportionally smaller than the mother. The vividness of the hues of yellows and oranges worked well creating a harmonious piece of art. Overall, I think that this is an interestingly balanced piece of art. Works Cited Kleiner, Fred S. and Mamiya, Christin J. Gardner's Art Through the Ages: A Concise History of Western Art. Belmont, CA: Wadsworth Publishing, 2007. â€Å"Byzantine Art. † Online Lectures: History of Art in Early Civilization ART1020 XD. Web. 3 September 2011. Unknown. Art Through Time: A Global View . unknown unknown unknown. 4 September 2011 ;http://www. learner. org/courses/globalart/work/219/index. html;.

A monograph about artichoke Essay Example | Topics and Well Written Essays - 3250 words

A monograph about artichoke - Essay Example ECONOMIC IMPORTANCE 15 A. Cynara 15 B. Helianthus tuberosus 17 C. Stachys affinis 18 VII. PHARMACOLOGICAL SIGNIFICANCE 18 A. Cynara 18 a. Antimicrobial Activities 21 b. Antioxidant Activities 22 c. Cholesterol Biosynthesis Inhibition 22 d. Cardioprotection 23 e. Hepatoprotective and Choleretic 23 f. Dyspepsia 24 g. Anti HIV 24 h. Anticancer 25 B. Helianthus tuberosus 25 A. Stachys affinis 25 Conclusion: 25 REFERENCES 28 TABLE OF FIGURES Figure 1: Globe Artichoke Flower 8 Figure 2: Globe Artichoke Thistle 8 Figure 3: Jerusalem Artichoke Plant 9 Figure 4: Jerusalem Artichoke Tubers 9 Figure 5: Chinese Artichoke Plant 10 Figure 6: Chinese Artichoke Tubers 10 Figure 7: Lineage of Cynara 14 Figure 8: Lineage of Helianthus tuberosus 15 Figure 9: Lineage of Stachys affinis 16 Figure 10: Immature Floral Head of Globe Artichoke 18 Figure 11: The three routes in phenylpropanoid metabolism (1, 2 and 3) proposed for Chlorogenic acid (CGA) synthesis (Camino, 2007) 21 ARTICHOKES I. INTRODUCTION Co mmon names, in contrast to scientific names approved by the binomial nomenclature lead to grave confusion in the identification and study of living organisms. A common name indiscreetly applied to varied plants is artichoke. The name artichoke refers to three groups of taxonomically distinct plants; the globe artichoke (Cynara), Jerusalem artichoke (Helianthus tuberosus) and the Chinese artichoke (Stachys affinis). While in the latter two the edible part is the tuber, in the former the floral bud is edible. Accordingly the word artichoke also refers to the edible bud of the globe artichoke as well as the edible tubers of the Jerusalem artichoke and the Chinese artichoke. A comparative account of the three plants is presented in table 1. When unspecified the term artichoke refers to globe artichoke or Cynara, a genera of the family Asteraceae that is characterized by the presence of an inflorescence or floral head. Cynara, also known as ‘thistles’ due to the presence of leaves with sharp prickly margins comprises of ten species, all thistle like perennial plants. Table 1: Chief Characteristics of the Three Artichokes Globe artichoke Jerusalem artichoke Chinese artichoke Scientific nomenclature Cynara Helianthus tuberosus L. Stachys affinis Bunge Family Asteraceae Asteraceae Labiatae (Lamiaceae) Edible part Floral bud Tuber Tuber Habitat Light, warm soil with sunny edges Rich and damp areas Wet and submersed areas Distribution Mediterranean basin Eastern North America E. Asia- China, Japan Medicinal use Anticholesterolemic, antirheumatic, cholagogue, digestive, diuretic, hypoglycaemic, lithonotripic Aperient. Aphrodisiac, diuretic, stimachic, tonic Anodyne II. HISTORICAL SURVEY A. Cynara Whether Cynara was known to ancient civilization cannot be ascertained. Though artichoke finds mention in ancient literatures, but the varied names used and the equally diverse descriptions have lead different researchers to interpret the ancient authors in differen t ways. While DeCandolle suggests that cultivated globe artichoke was unknown to ancient world, Foury on the basis of writings of Pliny and Columella,

INTELLECTUAL PROPERTY COURSEWORK ASSIGNMENT Essay

INTELLECTUAL PROPERTY COURSEWORK ASSIGNMENT - Essay Example Thus the objective of the copyright law was essentially to provide a monopoly for authors and creators in order to protect their creative works and reward them for their efforts. However to examine, whether the existing copyright legislation in the UK provides for a full enjoyment of this monopoly right by the authors and creators in the present day circumstances is the object of this paper. Copyright law is concerned with the protection of the expression of ideas of individuals which take the form of creative works. However the copyright law does not offer any protection to the original ideas themselves. The following scope of 'copyright' as outlined by the UK Patent Office (2001) will eliminate the confusion on the coverage of the copyright law: "Copyright gives the creators of a wide range of material, such as literature, art, music, sound recordings, films and broadcasts, economic rights enabling them to control use of their material in a number of ways, such as by making copies, issuing copies to the public, performing in public, broadcasting and use on-line. Copyright also gives moral rights to be identified as the creator of certain kinds of material, and to object to distortion or mutilation of it. The purpose of copyright is to allow creators to gain economic rewards for their efforts and so encourage future creativity and the development of new material, which benefits us all" (UK Patent Office 2001) Copyright Law in the UK: As already observed the copyright does not subsist in an idea but subsists in the particular form of representation of the idea. The peculiarity of the copyright law is that the copyright arises without cost or registration at the moment the representation of the idea is completed by its author. With a view to obviate the difficulties in protecting the monopoly rights of authors and creators in the form of a unique protection right, the Copyright Designs and Patents Act 1988 were enacted. "Under UK law the representations of creativity in which Copyright subsists are: original literary, dramatic, musical and artistic works; sound recordings, films, broadcasts, and cable programmes" Difficulties in Claiming Protection under Copyright Law in the UK: The word 'copy' in the term 'copyright' does not imply the copying of the whole work but to constitute an infringement it is enough a substantial portion of the of the material in which the copyright subsists is taken for the use of others. Therefore the first difficulty arises in deciding whether infringement is to be counted on the basis of quantity or quality. Though being debatable the courts may take the older view that the matter needs to be judged on the basis of quality rather than quantity. But still the onus of proving the infringement lies on the author or creator to claim the legal protection. In some cases it may be difficult to determine whether a particular creation can be regarded as a 'work of artistic craftsmanship'. The classic example in this case lies in the case of Henshaw -v- Restawhile where a new sofa with a frame covered by appropriate materials was designed by a team of craftsmen. In order to

The Poet Laureates of Los Angeles Essay Example | Topics and Well Written Essays - 250 words

The Poet Laureates of Los Angeles - Essay Example My Endurance finds that common ground in his nostalgic imagination, full of â€Å"booze and madness.† Being aware of working people letters, he points that he is even more â€Å"worse off† than most of them, writing to him on the paper â€Å"often torn† with an â€Å"unsharpened pencil or in ink.† Afterwards, he comes into a powerful realm of his inner world, transferring into â€Å"a young boy to write my stuff now.† So, his secret and common ground of his mental world and poetry is in his ability of thinking independently, changing things by the outstanding will for creativity of the imagination. On the other hand, Wanda Coleman’s The California Crack can be treated as a wonderful mystery, full of allegories, symbols, allusions and phantasms. Inspired by usual acid crack (â€Å"acid trails and flashes†), after imaginary days of â€Å"dripping,† her hero introduces sweet memories about his childhood (â€Å"†¦about his mother pinching him†), visualizing his everyday facts (â€Å"the lesbian he loved†¦Ã¢â‚¬ ); finally, his presentiment of something ugly comes true when bed getting split and the earth â€Å"opens the soft moist mouth of a scream.† In the expressive way, Wanda insists on the importance of â€Å"earth† feeling and â€Å"memory† pre-presence for our everyday balance and stability. To sum up, two LA poets single perspective must be examined in their considerations within these two poems, The Secret of My Endurance and The California Crack. Supposedly, their inner dimensions – imaginary and allegoric one – bring them to a harmony of existence leading to non-conflict coexistence in the everyday life of

M-Commerce Essay Example | Topics and Well Written Essays - 750 words - 1

M-Commerce - Essay Example 25). In simple words, it can be defined as the process of carrying out business tasks using the Internet (Norton, 2001, p. 371). In their paper, Lee, Hu, & Yeh (2003) outline that in the past few years a large number of business organizations have decided to make changes to their existing e-commerce and m-commerce systems. For this purpose they have spent a lot of funds in their website structures and have an enhanced marketplace share through incorporating the facility and technology support for m-commerce (Lee, Hu, & Yeh, 2003). Without a doubt, in the past few years the trend of online social networking, music, business, and gaming is increasing and emerging in the digital content marketplaces and more than 70% of the web-based people have no credit card on the other hand they have a mobile phone. So this is a real fact behind this way of paying for the online purchase and the majority of business organizations has uniquely positioned this new idea, for this new and innovative business model, mobile technology structural and knowledge team capability to enable web and mobile business in the world to augment digital content sales, attainment latest consumers and marketplaces (IGI-Global, 2009). For example, the mobile payment method uses the technology that allows payment by mobile phone. This operation is carried out through the Near Field Communications or NFC. A Near Field Communications chip makes possible the small range wireless radio contact between the cell phone and the reader (in a related system to Oyster journey cards in London), which activates the payment. Bank or credit card particulars can be stocked up in a variety of methods; however the GSMA helps to maintain them on the mobile phone’s SIM card. In addition, the mobile phone can be taken anywhere, or consumers are able to type a pin code concerned in the mobile phone to allow larger

How has President Barack Obama influenced separation of powers Research Proposal

How has President Barack Obama influenced separation of powers - Research Proposal Example From the past presidents’ experience, it is easy to predict how the administration of Barack Obama will influence the separation of powers theory, in addition to some unique circumstances of his presidency, the most important of which will be explored by this paper. Peter McNamara wrote that Woodrow Wilson believed the president must become a popular and national leader for the purpose of imposing order and system on the government’s policy agenda. (Galderisi, Herzberg and McNamara 1996, p. 194) The idea is that only the president could provide these qualities because the Congress is simply incapable of order and system. The problem is the president cannot deliver this when he is unpopular because the separation of power has made for a stalemate between the executive and the legislative branches. Barack Obama does not have this problem as he enjoy an unprecedented popularity among the American public. For instance, he has at least 70 percent approval rating in the recent Gallup poll just before his inauguration. (Ibanez 2009) The tide of positive public opinion behind a president can silence opposition from the Congress especially today when the media serves as a public forum wherein people has immediate access to information and could e xpress their sentiments and opinions. An aspect of Obama’s popularity comes from his ability to reach to people from all walks of life – he is easier to be seen as nonpartisan. The new president has a knack to mobilize public support as demonstrated by his meteoric rise from the unknown to having won the American presidency. Obama’s popularity is boosted by the fact that the Democrats – his party – has the majority in Congress. This means that he has the support of his party for his policies and he would encounter less resistance from opposition. A democrat in the White House and a Democrat Congress would mean less friction because both follow the same ideology. Presidents have long used

Siemens Case Study. Exam Study Example | Topics and Well Written Essays - 2000 words

Siemens . Exam - Case Study Example Further investigation into the corruption cases involving Siemens shows that there are more cases in its overseas branches where the company maintains slush funds for the purpose of paying bribes as was the case in Greece, where it had a large amount of euros set aside for bribes to win contracts and tenders. The cases involve different governments covering sensitive areas such as intelligence and surveillance. In this cases, top government official in Greece reaped massive gains. Other counties involved in the scandal other than Greece include Germany, Switzerland, Italy and the USA for paying large sums to win contracts. Defenses by the company towards the bribery charges indicate the lack of ethics and it actually admits to have paid bribes to different companies and different government officials. One of the main defense claims was that it was never a crime to bribe a company outside of Germany, in the cases that occurred prior to 2002. This covered cases that occurred from 1999 and up until 2002, in which case the bribery became public knowledge in 2003. The validity of the claims made by Siemens were questionable and were deemed to be invalid following the existence of regulation outlawing bribery of companies outside of Germany before 2002 as it was still effective before 1999. The ethical standing of Siemens in this case indicates that the company is ethically corrupt when a utilitarian approach is used to define the case of Siemens. This is where the company overlooked the effects of its action towards other well deserving companies prior to bribery to win foreign contracts. As such, the company sought the cheapest way to bring business to itself while ruining other companies instead of following the right channels as expected. The main concern for the company lies with the shareholder and its ability to maintain their wealth as well as increase it. Therefore, this drives the company towards bribery as the immediate economic benefits are appealing and rewarding, while the long-term can be borne by future leaders of the same company saving shareholder a lot of immediate trouble in poor share sales. Using the different theories of ethics to discern this issue brings utilitarianism into perspective, as it is the only theory that focuses on the product and not on the means through which it is achieved. In any case, when it does pay attention to the means through which objectives are achieved, it only does so in relation to the cheapest and most convenient way and not on its impact on others. Thus, Siemens paid attention to the utilitarian theory that saw it ignore fundamental knowledge on bribery to bring unfair advantage and profits to itself denying other firms their own fair chance at winning contracts the legal way. In addition, the company could have used other means to secure contracts in foreign countries without having to pay bribes such as improving their own conduct, as considering the amount of funds used in bribes and com paring it to the profits, legal business would result in better returns. This denies the executives a proper defense since it does not even safeguard the interests and needs of the shareholders since when caught

Dispersed Team Dynamics Assignment Example | Topics and Well Written Essays - 500 words - 5

Dispersed Team Dynamics - Assignment Example Conflicts generally occur when there is difference in opinions and interest between individuals. According to a study by Lambregts (2011), there are more chances of conflicts in collective activities in which regular communications and interpersonal relationships are less feasible as in virtual teams (pp.10-11). The conflicts may be of different nature. In a virtual team frame, usually there are many independent groups working on a linear relationship with the management at the headquarters. Therefore there can be conflicts among groups, individuals in the same group or individuals across different groups. Different scholars have varying opinions about the category of conflicts in a virtual team. According to Kankanhalli, Tan and Wei (n.d.), conflicts within a team can either be relationship conflicts or task conflicts. Personal conflicts occur as a result of increasing tensions and frictions between employees due to mutual disagreement on a particular issue or due to egos and emotio nal clashes during the routines. Task conflicts generally arise around the methods and processes associated with the given assignments and the responsibilities to accomplish them. According to Professor Lindred Greer (as cite in Petersen (2014), the physical distances and the cultural differences among the team members can affect the quality of communication, and the responses to disagreements can reflect in the negative productivity of the team. The basic reason for this aspect is the unavailability of individuals for personal interactions at the required times of response to proposals and complaints in the process. Conflicts are capable of self-replication when they are not resolved promptly. Hence it is important for the leaders to create a mechanism to forecast the possibility of issues within the team. A typical analysis of the nature of conflicts can work as a measure to predict the possibility of

An Early Marriage Essay Example for Free

An Early Marriage Essay An early marriage, is an issue where argued by many now a days. Some people are advocated for early marriage because it is healthy. Prophet Mohammed said that it is better to marry early, but if you can’t then you should fast instead if you still can’t control your desire. I believe that early marriage had a lot of advantages. But people would argue that younger married couples are not matured enough to take the responsibilities. But this is not a big issue to argue for, since a most succeeded marriages in the past 10 years are a younger married which lasted longer. Personally, any person should have a step to marry early. People says , married earlier is the best way to destroy your life in such a young age besides drugs. Young people are not ready for responsibilities. They have not done any thing important in their life. But , I believe if people waited until they were older to marry theyd be a lot more careful about selecting a mate. That would be a terrible blow to the divorce industry. Although divorces didnt depend on the age of the couples. It depends on how they faced and solved their problems. Moreover, I would say that it would be nice to have your children younger, and will be able to join them in many things, be closer to understanding their generational viewpoints, fashion, trends, etc. When your children have your grandchildren, you will be young grandparents able to enjoy your grandchildren, do more things with them, live longer to see them prosper as well. The nice thing is that once your children leave home, you will be still young enough and most likely healthy enough to do more things such as travel, or physical activity. Others says , that many females refuse to live with in lows , so as a consequences males most ready to assist their own financial situations first before they getting married, which may cause to delay marriage . Well, it is all about whether they want to get married and your partner is supportive or not. It is about maturity levels, how much they care for each other and how much they want the marriage to work. You have those marriages which do turn out to work. These marriages seem to work because the couple has worked things out and have thought out every way possible to keep this marriage going and will work out the problems that come their way. If the couple is prepared, most likely the marriage will continue to go strong it both spouses take an equal part of the marriage and work it out.

Price Guarantee Essay Example for Free

Price Guarantee Essay Introduction Price guarantees have become a popular promotional tool for attracting new customers or selling new products to existing customers. Many business organizations are now adopting the price guarantee concept in their pricing policies. Most notable among them is Walmart. General implications of price guarantees Price guarantees can take two forms. One is price matching in which lower prices are immediately matched. The other is price beating in which lower prices are undercut by a certain percentage of the difference. Both forms of price guarantees however have immense implications as far as market expansion and market retention are concerned. Obviously the assurance that they are getting the lowest possible prices will have a major impact on how the customers do business with the organization offering price guarantees. The effect of price guarantees is especially pronounced nowadays because of the extensive use of the internet that customers make in arriving at their purchase decisions. Because of the widespread availability of information on the internet, consumers can easily compare prices and find out which company is offering the lowest prices. However it takes time-consuming research on the part of the consumer especially if the product in question has intense competition. All businesses these days having products and services to sell are advertising their existence online, so the consumer looking for a particular product widely available in varying prices will have to go through all those dozens of websites in order to make a worthwhile price comparison and arrive at the lowest possible price available to him or her. However if there is a company out like Walmart which guarantees that the price it is offering is lowest available now and that even if market prices should go down in the future, the consumer will get refunds, then consumers will just fall in love with that offer because of all the time and energy saved. As a result of the assurance on the part of Walmart that the product is selling at the lowest possible price now or even in the future, consumers will rush to spend all their money on Walmart offerings. According to the above, offering price matching or price beating seems to have an extremely positive impact on the mindset of the consumers. However not all consumers are looking for the lowest possible price and this is especially true if the product in question is a status symbol, that is, the product is an issue of image with the consumer. In that case, quality rather than price will be the prime consideration. Consumers putting quality before price will be asking themselves why a certain company is offering such low prices. The suspicion that these consumers would be harbouring is that the quality of the product is in question. Quality defects make products difficult to sell, however an assurance of the lowest possible price will tend to make most consumers blind to minor defects that are not readily apparent. Some consumers will suspect that a particular company is adopting the policy of price guarantee in order to allay suspicions of product quality. Benefits of price guarantees Price guarantees can create customer goodwill as the customers are sure that they are getting the best deal possible. Price guarantees are especially applicable in the retail industry as price is the only differentiating factor in this case. The nature of the service involved in the retail industry is such that quality hardly varies from one company to another. Therefore the only way for retail companies to make themselves stand out from the crowd is to differentiate themselves through price. This is the reason that price guarantees have become so popular in the retail industry and the customers are not complaining. They have no reason to because, as mentioned before, they no longer have to surf for hours and hours or walk miles and miles of aisles for the best deal. They will just buy whatever they need from Walmart because whatever they are buying, Walmart’s prices are the best possible they can get. There is no possibility of post-purchase regrets. This is the best of all possible worlds. As will be elaborated upon later on, price matching or price beating make it pointless for sellers to lower their prices as any benefits to be gained from the lower prices will be cancelled by the competing seller who is offering price guarantees. Thus price guarantees are a means of price signaling. It is this price signaling which assures the customers that they are getting the best possible deals. Price guarantees have become so prevalent these days that customers expect companies to offer price guarantees. As a result, offering price guarantees has become the very act of survival for companies particularly in the retail industry. While this may be greatly beneficial for the consumers, the situation is somewhat different for the suppliers. If there is one retailer for example who buys a television set for â‚ ¤150 and offers it to the market for â‚ ¤250 with price guarantee, then another retailer who happens not to have the buying power of the other retailer and buys the same set for â‚ ¤170 will have to set the price also at â‚ ¤250. The second retailer might want to undercut the first by setting a lower price, â‚ ¤240 for example, but the second retailer would have little to gain from this as price guarantee offered by the first retailer means that the first retailer would only either match the lower price or beat the lower price. This price cutting can go on all the way down to the purchase price of the second retailer beyond which it cannot go. This is a discounting game which the first retailer will always win because of the price guarantee it offers. In this way price guarantees ensure that there is no price cutting going on in the market and that customers always get the best possible deal. Legal implications of price guarantee Price collusion has become a greater threat than ever now that the internet is facilitating connectivity at an unprecedented level not only between buyers and sellers but also between sellers. So it has become easier than ever for the sellers to reach some sort of an agreement online and raise their prices simultaneously. Occurrences have been noted whereby sellers have been known to discuss their prices online and raise their prices the next day. Such price collusion is obviously anti-competitive and so illegal. Price matching can also raise issues of price collusion in a roundabout way. What might happen is that sellers might already be selling their products at a heightened price level and one seller might offer a price guarantee in one product category while another seller might offer a price guarantee in another product category. Thus sellers might be colluding to create their own niches in specific product categories. This impairs the market forces of supply and demand as the price setting mechanism and should become the focus of regulatory agencies to identify and regulate. Ethical implication of price guarantee According to the invisible hand theory, consumers demand for a lower price while suppliers ask for a higher price and accordingly adjustments take place and in the process an agreement is reached between consumers and suppliers whereby both the buyers and the sellers are buying and selling respectively at the same price. This is the underlying structure of the free market economy. However the element of price guarantees can strike at this very foundation of the free market economy. What happens is that price matching, for example, discourages the other sellers from lowering their prices as the seller offering the price guarantee will only lower its own prices accordingly. Thus the phenomenon of price guarantees can perpetuate high prices at the expense of product quality and manufacturing efficiency. Manufacturing efficiency results from the learning curve. As companies gain experience in manufacturing their products, there is a learning curve which makes their manufacturing operations more efficient. As a result, products become cheaper to produce. According to the laws of supply and demand, this would allow suppliers to lower their prices and sell more. Not so however when there is one seller in the market practicing price matching. That seller has a pact with the buyer that the buyer will never find a lower price elsewhere and that if the buyer does find a lower price, the seller will immediately either match the new lower price or beat it. As a result of this pact, all the buyers in the market will be rushing to that seller offering price guarantees rather than to the other sellers who are offering lower prices. Inasmuch as offering price guarantees implicitly chips away at the very foundations of demand and supply as the price-setting mechanisms, the act is clearly unethical. The use of price guarantees can be put to other unethical means as well. There have been several news items where shops offering price guarantees have been known to lure customers to their geographical sites where these same customers are then set upon by sale executives in order to make them purchase expensive items. Conclusion Whether or not buyers suspect price guarantees encouraging tacit price collusions, buyers prefer sellers who are offering price guarantees. This is especially so with the advent of the internet where price information is available at the click of a mouse. Inasmuch as price guarantees turn heads in the buyer community, price guarantees hold great benefits for the seller. By using price guarantees sellers no longer have to resort to online discounters to offer lower prices and can reach the customer directly. In spite of the anti-competitive issues that arise as a result of the implementation of price guarantees, these guarantees, ethically and legally practiced, can strengthen the flow of trade and commerce. BIBILIOGRAPHY Pindyck, Robert S., and Daniel L Rubinfeld. Microeconomics. South western college pub. 2007. Varian, Hal R. Microeconomic Theory. McGraw Hill/Irwin. 2005. Mankiw, N Gregory. Principles of Microeconomics. McGraw Hill/Irwin. 2005. Colander, David C. Microeconomics. McGraw Hill/Irwin. 2005. Nagle, Thomas T., and John Hogan. The Strategy Tactics of Pricing: A Guide to Growing More Profitably . South western college pub. 2007. Baker, Ronald J. Pricing on Purpose: Creating Capturing Value. McGraw Hill/Irwin. 2005. McConnell, Campbell R., and Stanley L Brue. Economics. South western college pub. 2007.

David Ricardo: The Comparative Advantage

David Ricardo: The Comparative Advantage As a successful classical economist of the 1700 to 1800s, David Ricardo is known for many of his contributions to political and classical economics including the theory of comparative advantage. The theory of comparative advantage suggests that a person can have a comparative advantage at producing something if he or she can produce it at a lower cost than anyone else. On a larger scale, the comparative advantage has played a large role in free trade, and providing markets with goods and services that would have otherwise been unavailable (Library of Economics and Liberty, 2007). This report will discuss the complications and advantages of the comparative advantage, David Ricardo’s background and theories, the comparative advantages effect on the economy, the political aspect of the theory of comparative advantage, and how it has developed over time. The Comparative Advantage The Comparative Advantage has had a direct effect on international trade and voluntary trade. The theory explores how to create mutually beneficial gains through trade between countries through comparing opportunity costs. Consider the following equation for opportunity cost:, if both China and Canada produce steel and wool, but China produces steel at a lower opportunity cost than Canada (meaning that they give up less monetary assets, goods, or labour costs to produce it), and Canada produces wool at a lower opportunity cost than China, each country has a comparative advantage against one another. This is where mutually beneficial gains of each country comes into play, if Canada chooses to trade some of the wool they have produced for metal, they are gaining more metal then they would have if they had chosen to create both the wool and metal themselves (Cohen Howe, Scarcity, opportunity cost, and trade, 2010). The benefits of the comparative advantage are simple, when a person wak es up in Canada on a cold winter morning and enjoys a glass of orange juice and a cup of coffee, they are enjoying the benefits of the comparative advantage theory. This is because Canada is not able to produce cocoa beans or grow oranges, therefore countries such as Brazil and the USA have a comparative advantage, and Canada must import these goods from them. In Canada much of what makes up the gross domestic product comes from exports and imports, in fact Canada’s import 34% of their goods, and export 36% of GDP. Considering the GDP equation: it becomes apparent of the direct impact this theory has on the Canadian economy, and how it is detrimental for its continuation and growth (Cohen Howe, Globalization and Trade Policy, 2010). Although there are many clear benefits regarding the comparative advantage, there are a few complications and criticisms that must be taken into consideration. The main issues with this theory are the effects of trade on the country doing the trading, these concerns include prices of goods in the country, production levels of said goods, employment levels, who exports and imports what, consumption levels, wages and incomes and welfare effects. These issues can be affected both positively and negatively by uncontrollable forces such as technology and government and can have a direct impact on a countries GDP (Suranovic, 2007). Some other areas of concern include relative prices and exchange rates not being taken into consideration, overstating of benefits and ignora nce of costs such as transport costs and sea and air pollution, as well as the complexity of the real world in comparison to the simplistic example of two countries trading goods (Economics Online, n.d.). David Ricardo David Ricardo began as a stock broker for the London stock exchange in the late 1700s, during this time he gained great wealth that allowed him to further develop other interests such as science and economics. At the age of 27 Ricardo read The Wealth of Nations by Adam Smith, and this commenced ten years of studying and by the age of 37 David Ricardo his first published work called The High Price of Bullion, a Proof of the Depreciating Bank Notes (Spengler, 2014). Ricardo was a true believer in the quantity theory of money, which is the belief that money supply has a direct relationship with price. In 1815 Ricardo published an article called Essay on the Influence of a Low Price of Corn on the Profits of Stock, during which he expressed his opposition to Corn Laws, which at the time caused a restriction on the importation of wheat. As a result of this, Ricardo developed the idea of comparative costs, which is now known as the comparative theory or the Ricardian Model (Library of Econ omics and Liberty, 2008). In his book On the Principles of Political Policy and Taxation Ricardo suggested that by having an absolute advantage (where a country makes their own goods and does not trade) a countries profits can never increase. He advocates that foreign trade can increase profits by bringing food and necessities into the market at a lower price thereby reducing wages and increasing profits. Ricardo asserts that this theory provides advantages to all consumers, as well as producers as they gain more product but costs remain the same (Ricardo, 1817). Ricardo suggests that a country can benefit greatly from trade through the realization and optimization of their comparative, and absolute advantage goods (Suranovic, 2007). Economic Aspect The comparative theory has had ample effect on the global and Canadian economy. For the purposes of this report the focus will be on the Canadian economies effects pertaining to the comparative theory and free trade. In 1989 Canada created a Free Trade Agreement (FTA) which allowed them to trade their goods globally with other countries, five years later the North American free-trade agreement (NAFTA) was implemented to allow free trade between Canada, Mexico and the United States of America. These events have drastically reformed the Canadian economy to what it is today (Schwanen, 2013). Canada relies heavily on free trade to maintain its GDP, specifically through exports and imports. Canada has become the ideal example of how the comparative theory can benefit a country, this is because Canada has much better technology then other countries and has many resources to create its own products and services, but through free-trade Canada is able to grow economically and provide an abundance of goods to its residents. International trade has the ability to increase incomes, saving and investment, all of which have the ability to positively affect the economy. There are many determinants that must be taken into consideration when determining a countries comparative advantage, these include; resource endowments (availability of resources), human skill (such as engineers, programmers, etc.), technology, demand patterns, specialization, business practices, and government policies (Gupta, n.d.). In recent years Canadian exports and imports have been increasing steadily. Exports are comprised of all goods leaving the country such as all goods grown, produced, gathered or manufactured within said country). In 2013 the Canadian merchandise export values increased 3.6% from the previous year, and 1.5% in the last 10 years. Exports to the United States have also been steadily increasing to a current 75.8% of all exports (See Figure 1), and the total value of all exports in Canada in 2013 was $471.4 billion. Imports are comprised of all goods that have entered the country, these include any goods that have crossed boundaries. In 2013 the Canadian merchandise imports increased 2.8% from 2012, and 3.3% in the last 10 years. This data displays a clear increase in imports over exports, which has created a trade deficit in 2013(See Figure 3) (Statistics Canada, 2013). Political Aspect Political decisions have a considerable amount of power regarding the comparative theory and free-trade. These decisions include political pressures regarding trading agreements, creation and implementation of policies, export and import interests, and negotiation between countries (Grossman Helpman, 1993). In Canada, the comparative advantage lies within industries that excerpt natural resources and raw materials. These include wheat, meat, seeds, natural gas, metals, wood and paper. In order for Canada to sustain this comparative advantage it must maintain continual green development to ensure natural resources are still competitive in comparison to other countries resources. Political policies must address these concerns and ensure the prosperity of Canada’s natural resources while still maintaining a high level of exports and imports, as they directly impact the country’s gross domestic product. Canada also has a comparative advantage within the auto industry, as well as aerospace, insurance and communication industries (The Conference Board of Canada, 2013). It is detrimental to Canada’s future economic growth as well as their strengthening of the comparative advantage to ensure technological advances are being made and trade agreements with technologically inn ovative countries are being made. Technology accounts for 5% of Canada’s GDP, and must be able to compare in such a competitive global market. Political figures are responsible for determining and advising on sanctioning policies and identifying emerging businesses to strengthen Canada’s digital advantage (ICTC, 2013). Development of the Comparative Advantage Through the generations the comparative advantage has created growth and innovation in many industries, while it has had great impact on international trade and free trade, there have been hypothesis that the comparative advantage has weakened over time. A recent study named The Evolution of Comparative Advantage: Measurement and Implications suggests that countries with a comparative disadvantage have a faster economic growth than those with a comparative advantage, in both refined and unrefined countries. The study also suggests that the comparative advantage has stayed the same from the 1960s to the 2000s due to productivity levels increasing, and an increase of 15% in GDP in the 2000s that could have been higher had the comparative advantage not been weakening. Finally, the authors have reported that trade patterns have been impacted and have become more similar across countries, such as log and wood. This study suggests that there is still ample work to be done to restore the co mparative advantage and refine it to be more beneficial in today’s economy (Levchenko Zhang, 2014). Conclusion In closing, I consider David Ricardo’s theory to be innovative and well-intended, the world and country I have grown up in would not be what it is today if not for the comparative advantage and free-trade. In this report many aspects of the comparative advantage theory were discussed, what the comparative advantage theory is in regards to opportunity costs and international/free trade, as well as who benefits from the theory and what effects it has on Canada. The history of David Ricardo and his ideals for the future including the Ricardian model. The economic and political aspects and effects of the comparative advantage theory and free-trade in Canada. As well as the evolution of the comparative advantage, and its current place in economics now. Considering the increase in technology and the limited natural resources the world is currently facing, I believe it is important to work towards refining the comparative advantage to help countries better contribute to other country ’s needs, while still mutually benefitting from the trade. In the coming years it will be quite interesting to see how the world handles future innovations and changes in trade and how the Ricardian Model will contribute to those advancements. Bibliography Cohen Howe, A. J. (2010). Globalization and Trade Policy. In A. J. Cohen Howe, Economics for Life (pp. 334-335). Pearson. Cohen Howe, A. J. (2010). Scarcity, opportunity cost, and trade. In Economics for Life (p. 399). Pearson. Economics Online. (n.d.). Comparative Advantage. Retrieved from http://www.economicsonline.co.uk/Global_economics/Comparative_advantage.html Grossman Helpman, G. M. (1993). The Politics of Free Trade Agreements. Retrieved from The National Bureau of Economic Research: http://www.nber.org/papers/w4597.pdf Gupta, S. D. (n.d.). Comparative Advantage and Competitive Advantage: An Economics Perspective and a Synthesis. Retrieved from economics.ca: http://economics.ca/2009/papers/0534.pdf ICTC. (2013). Strengthening Canadas comparative advantage. Retrieved from Information and Communications Technology Council: http://www.ictc-ctic.ca/?p=9821 Levchenko Zhang, A. A. (2014). The Evolution of Comparative Advantage: Measurement and Welfare Implications. Retrieved from The National Bureau of Economic Research: http://www.nber.org/papers/w16806.pdf Library of Economics and Liberty. (2007). Comparative Advantage. Retrieved from Library of Economics and Liberty: http://www.econlib.org/library/Topics/Details/comparativeadvantage.html Library of Economics and Liberty. (2008). The Concise Encyclopedia of Economics: David Recardo . Retrieved from http://www.econlib.org/library/Enc/bios/Ricardo.html Ricardo, D. (1817). On the Principles of Political Economy and Taxation. Retrieved from Library of Economics and Liberty: http://www.econlib.org/library/Ricardo/ricP2a.html#Ch.7, On Foreign Trade, comparative advantage Schwanen, D. (2013). Free trade transformed Canadas economy. Retrieved from The Globe and Mail: http://www.theglobeandmail.com/globe-debate/free-trade-transformed-canadas-economy/article16124601/ Spengler, J. J. (2014). Encyclopedia Britannica. Retrieved from David Ricardo: http://www.britannica.com/EBchecked/topic/502193/David-Ricardo Statistics Canada. (2013). International Trade Canadian Economy . Retrieved from Industry Canada: http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00029.html Suranovic, S. M. (2007). The Theory of Comparative Advantage. Retrieved from International Trade Theory and Policy: http://internationalecon.com/Trade/Tch40/T40-0.php The Conference Board of Canada. (2013). Canadas trade strengths come from natural resources and related industries. Retrieved from The Conference Board of Canada: http://www.conferenceboard.ca/press/newsrelease/12-06-19/canada_s_trade_strengths_come_from_natural_resources_and_related_industries.aspx Figures Figure 1. Top Export Destinations. An overview of total exports from Canada to other countries. Figure 2. Top Import Sources. An overview of total imports to Canada from other countries. Figure 3. Exports, Imports and Trade Balance. A comparison of exports, imports, and the trade balance (deficit) from 2004-2013.

Comparison of the Portrayal of Nature in Blake and Wordsworth Essay

Comparison of the Portrayal of Nature in Blake and Wordsworth One of the most popular themes for Romantic poetry in England was nature and an appreciation for natural beauty. The English Romantic poets were generally concerned with the human imagination as a counter to the rise of science. The growing intellectual movement of the 18th and 19th centuries placed scientific thought in the forefront of all knowledge, basing reality in material objects. The Romantics found this form of world view to be restrictive. They felt that imagination was crucial to individual happiness. The imagination also provides a common human bond; a means of sympathy, of identification. However, the absence of imagination, the Romantics felt, would lead people to indifference and a false sense of being. The English Romantics accepted the reality of the link between man and nature in the form of the human imagination as the basis of human understanding, rejecting the scientific world view of materialism. The Romantics attempted to discover the hidden union between man a nd nature. Imagination is a force, or energy, that allows such a bond to be made. William Blake saw the human imagination as essential to human understanding of the world; he saw reality as a "mental construction." According to Blake, once the energy of imagination is used effectively to realize the connection between man and nature, the person gains freedom from the restraining bonds of uninspired thought. Humans bring meaning to nature in the form of imaginative thought. Self-imposed social and intellectual restrictions deprive humans of experiencing nature and the true human spirit. In Blake's Songs of innocence and Experience we have several poems which focus on nature. T... ...ded him comfort and enjoyment during the years of his absence, when he was stuck in the "din of towns and cities." For the rest of the poem, he ponders on the relationship he has had with this area, thinking about how his feelings about nature have changed since he was a child and how he can pass on his appreciation of the valley to his "dearest Friend", with whom he is exploring the river valley around the abbey. The specifics of the scene are important to Wordsworth, but their importance is primarily as an inspiration for the more philosophical ideas he presents throughout the poem. What Wordsworth names and represents as nature is the ruling power working tacitly and harmoniously, reconciling discordant elements, building up the mind and perhaps the cosmos itself. www.mattbrundage.com Wordsworth Lyrical ballads Blake - Songs of Innocence and Experience

Pushed, Chosen, And Choosing :: essays research papers

Their Eyes Were Watching God, by Zora Neale Hurston, was a novel about one woman’s self-revelation. It began when she was a very young girl, first being pushed, then chosen, and finally choosing. Born a victim of circumstance, Janie was subject to her position in life. She was raised to uphold the standards of the early African American generation. From the beginning, she was taught to be passive and subject to whatever life gave her. As she grew older she began to realize she must give in to her desires and not suppress them. Janie, the main character of the story, was set up for her journey of self-discovery by her grandmother. Nanny set a goal for Janie’s life by saying, â€Å"Ah wanted you to look upon yo’ self. Ah don’t want yo’ feathers always crumpled by folks throwin’ up things in yo’ face.† Janie’s grandmother pushed Janie into a marriage, which she considered a ‘safe’ place for Janie. Though hesitant, Janie agreed to marry Logan Killicks. He was a farmer who married Janie shortly after she completed school. Killicks was the first antagonist that Janie encountered in the story. He was there for one purpose, to destroy Janie’s new sense of self-awarenes. Logan demanded things of Janie that she did not wish to do and tried to push her into his mold of a perfect wife. Janie did not love Logan nor did he love her. She didn’t know what she wanted, but she knew that she didn’t want Logan Killicks. Joe Starks appeared in Janie’s yard one afternoon. He said the sweet things that Janie wanted to hear. Though Janie hardly knew the man, she was chosen by his words—being young and gullible. She took another step in her journey, leaving Logan the next day and traveling to Eatonville with Joe Starks. Aspiring to be the mayor of Eatonville, Joe Starks was a man concerned with little except power. He wanted it, and he was going to use Janie to get it. She wore nice dresses during this marriage because Joe wanted her to stand out from the rest of the town; he used her as an icon of his prosperity and power. He was cruel to Janie and stomped out all of her free will. He built his town of Eatonville, became the mayor crushing all in his path, and made many enemies along the way, including Janie. During the period that she was married to Joe Starks, Janie was not allowed to talk and act as herself, but she began to think for herself—never revealing to Joe how she felt until just before he died. Pushed, Chosen, And Choosing :: essays research papers Their Eyes Were Watching God, by Zora Neale Hurston, was a novel about one woman’s self-revelation. It began when she was a very young girl, first being pushed, then chosen, and finally choosing. Born a victim of circumstance, Janie was subject to her position in life. She was raised to uphold the standards of the early African American generation. From the beginning, she was taught to be passive and subject to whatever life gave her. As she grew older she began to realize she must give in to her desires and not suppress them. Janie, the main character of the story, was set up for her journey of self-discovery by her grandmother. Nanny set a goal for Janie’s life by saying, â€Å"Ah wanted you to look upon yo’ self. Ah don’t want yo’ feathers always crumpled by folks throwin’ up things in yo’ face.† Janie’s grandmother pushed Janie into a marriage, which she considered a ‘safe’ place for Janie. Though hesitant, Janie agreed to marry Logan Killicks. He was a farmer who married Janie shortly after she completed school. Killicks was the first antagonist that Janie encountered in the story. He was there for one purpose, to destroy Janie’s new sense of self-awarenes. Logan demanded things of Janie that she did not wish to do and tried to push her into his mold of a perfect wife. Janie did not love Logan nor did he love her. She didn’t know what she wanted, but she knew that she didn’t want Logan Killicks. Joe Starks appeared in Janie’s yard one afternoon. He said the sweet things that Janie wanted to hear. Though Janie hardly knew the man, she was chosen by his words—being young and gullible. She took another step in her journey, leaving Logan the next day and traveling to Eatonville with Joe Starks. Aspiring to be the mayor of Eatonville, Joe Starks was a man concerned with little except power. He wanted it, and he was going to use Janie to get it. She wore nice dresses during this marriage because Joe wanted her to stand out from the rest of the town; he used her as an icon of his prosperity and power. He was cruel to Janie and stomped out all of her free will. He built his town of Eatonville, became the mayor crushing all in his path, and made many enemies along the way, including Janie. During the period that she was married to Joe Starks, Janie was not allowed to talk and act as herself, but she began to think for herself—never revealing to Joe how she felt until just before he died.

Delegation Essay -- essays research papers

What is Delegation? Delegation is, the assignment of authority and responsibility to a subordinate at a lower level. (https://ecampus.phoenix.edu/secure/resource/resource.asp) Basically what this definition means is if you are a Manager in your company, Delegation is the process in which you assign important task to other employees. In doing this process as a manager you must 1) Identify the task that is to be accomplished, 2) Choose the right employee to complete the assignment, 3) give complete and concise directions, 4) The next step is to monitor the progress of the assignment, check back with your employees to see how things are going and to make sure deadlines are being kept. 5) Provide feedback in order for your employees to complete the task. Effective Delegation Managing people effectively is one of the major challenges facing organizations today. Effective managers should be able to clearly define his/her role within an organization. Managers need to make appropriate decisions, delegate tasks, empower people, manage conflict well and LISTEN. Managers need to identify specific skills for being effective within the organization. In this paper I will cover what skills are necessary for effective delegation as a manager and how a manger can effectively delegate tasks. Delegation will always be one of the most important management skills - and one of the easiest to get wrong. Good delegation saves you time, develops you people, grooms a successor, and motivates. Too ...

Solution to Auditing and Assurance Service: 1,12,B, 3

SOLUTIONS FOR REVIEW CHECKPOINTS 1. 1Business risk is the collective risk faced by a company that engages in business. It encompasses all threats to and organization’s goals and objectives. It includes the chance that customers will buy from competitors, that product lines will become obsolete, that taxes will increase, that government contracts will be lost, or that employees will go on strike. 1. 2The conditions of complexity, remoteness, time-sensitivity, and consequences increase demands by outside users for relevant, reliable (useful) information. They cannot produce the information for themselves because of these conditions. Company managers and accountants produce the information. 1. 3Information risk, in contrast to business risk, is the risk (probability) that the information (mainly financial) disseminated by a company will be materially false or misleading. This risk creates the demand for objective outsiders to provide assurance to decision makers. 1. 4Students can refer to the AAA and AICPA definitions in Chapter 1. Some instructors may want to extend the consideration of definitions to include the internal and governmental definitions (located in Module D). In response to â€Å"What do auditors do? ,† students can refer to Exhibit 1. 2 and respond in terms of: (1) obtaining and evaluating evidence about assertions management makes about economic actions and events, (2) ascertaining the degree of correspondence between the assertions and the appropriate reporting framework, and (3) providing an audit report (opinion). Students can also respond more generally in terms of â€Å"lending credibility† to financial statements presented by management (attestation). 1. An attest engagement is: â€Å"An engagement in which a practitioner is engaged to issue or does issue a written communication that expresses a conclusion about the reliability of a written assertion that is the responsibility of another party. † To attest means to lend credibility or to vouch for the truth or accuracy of the statements that one party makes to another. The attest function is a term often applied to the activities of independent CPAs when actin g as auditors of financial statements. 1. Assurance engagements are independent professional services that improve the quality of information, or its context, for decision makers. Since information (financial statements) are prepared by managers of an entity who have authority and responsibility for financial success or failure, an outsider may be skeptical that the information is objective, free from bias, fully informative, and free from material error, intentional or inadvertent. The services of an independent-CPA auditor helps resolve those doubts because the auditor’s success depends upon his independent, objective, and competent assessment of the information (e. . , the conformity of the financial statements with the appropriate reporting framework). The CPA’s role is to lend credibility to the information; hence the outsider will likely seek his independent opinion. 1. 7CPAs serve as independent intermediaries who lend credibility to information. Hence, assuranc e services are natural extensions of the well-regarded audit and attest services. CPAs can use their expertise in internal control and measurement methods. Assurance services are natural extensions of attestation services, which earlier evolved from financial statement audit services. Attestation and audit services are highly structured and intended to be useful for large groups of decision makers (e. g. , investors, lenders). On the other hand, assurance services are more customized and intended to be useful to smaller, targeted groups of decision makers. In this sense, assurance services bear resemblance to consulting services. 1. 8There are four major elements of the broad definition of assurance services: Independence. CPAs want to preserve their attestation and audit reputations and competitive advantages by preserving integrity and objectivity when performing assurance services. Professional Services. Virtually all work performed by CPAs is defined as â€Å"professional services† as long as it involves some element of judgment based in education and experience. Improving the Quality of Information or its Context. The emphasis is on â€Å"information†Ã¢â‚¬â€œ CPAs’ traditional stock in trade. CPAs can enhance quality by assuring users about the reliability and relevance of information, and these two features are closely related to the familiar credibility-lending products of attestation and audit services. â€Å"Context† is relevance in a different light. For assurance services, improving the context of information refers to improving its usefulness when targeted to particular decision makers in the surroundings of particular decision problems. For Decision Makers. They are the â€Å"consumers† for assurance services, and they personify the consumer focus of new and different professional work. They may or may not be the â€Å"client† that pays the fee, and they may or may not be one of the parties to an assertion or other information. The decision makers are the beneficiaries of the assurance services. 1. Accountants record, classify, and summarize (report) a company’s assets, liabilities, capital, revenue, and expense in financial statements. Auditors gather evidence related to the assertions management makes in financial statements and render a report. Accountants produce the financial statements; auditors audit them. 1. 10There are three major classifications of ASB assertions with several assertions in each c lassification: Transaction Assertions: Occurrence assertion: The objective is to establish with evidence that transactions giving rise to assets, liabilities, sales and expenses actually occurred. Key questions include â€Å"Did the recorded sales transactions really occur? † Completeness and cutoff assertion: The objective is to establish with evidence that all transactions of the period are in the financial statements and all transactions that properly belong in the preceding or following accounting periods are excluded. Completeness also refers to proper inclusion in financial statements of all assets, liabilities, revenue, expense and related disclosures. Key questions related to completeness include: â€Å"Are the financial statements (including footnotes) complete? and â€Å"Were all the transactions recorded in the right period? † Accuracy assertion: The objective is to establish with evidence that transactions have been recorded at the correct amount. Key questions relate to â€Å"where the expenses recorded at the proper dollar amount? † Classification assertion: The objective is to establish with evidence that transactions were posted to the cor rect accounts. Key questions relate to â€Å"was this expense recorded in the appropriate account/† Balance Assertions: Existence assertion: The objective is to establish with evidence that balance represents assets, liabilities, sales, and expenses that are real and in existence at the balance sheet date. Key questions relate to â€Å"does this number truly represent assets that existed at the balance sheet date? † Rights and obligations assertion: The objectives related to rights and obligations are to establish with evidence that assets are owned (or rights such as capitalized leases are shown) and liabilities are owed. Key questions related to this assertion include: â€Å"Does the company really own the assets? nd â€Å"Are related legal responsibilities identified? † Completeness assertion: The objective is to establish with evidence that all balances of the period are in the financial statements. Key questions related to completeness include: â€Å"Are the financial statements (including footnotes) complete? † Valuation assertion: The objective is to establish with evidenc e that balances have been valued correctly. Key questions include â€Å"Are the accounts valued correctly? † and â€Å"Are expenses allocated to the period(s) benefited? † Presentation and Disclosure assertion: Occurrence assertion: The objective is to establish with evidence that transactions giving rise to assets, liabilities, sales and expenses actually occurred. Key questions include â€Å"are we properly presenting and disclosing transactions that occurred during this period. Rights and obligations assertion: The objectives related to establishing with evidence the proper presentation of assets, liabilities, revenues and expenses to which the company has a legal right or a legal obligation Key questions related to this assertion include: â€Å"Has the company properly presented the assets in its possession? nd â€Å"Are related legal responsibilities identified and properly disclosed? † Completeness assertion: The objective is to establish with evidence that all balances of the period are presented and/or disclosed in the financial statements. Key questions related to completeness include: â€Å"Are the financial statements (including footnotes) complete? † Accuracy and valuation assertion: The objectives are to establish with evidence that balances presented and disclosed in the financial statements have been recorded accurately and have been valued correctly. Key questions include â€Å"Are the accounts valued correctly? † and â€Å"Are expenses allocated to the period(s) benefited? † Classification and understandability assertion: The objective is to establish with evidence that presentation and disclosures are properly classified on the financial statements and that financial statements including footnotes are understandable to the financial statement users. Key questions relate to â€Å"Is this account properly presented in the correct financial statement category† and â€Å"are the footnote disclosures presented to promote an understanding of the nature of the account† . 11The ASB’s assertions are important to auditors because they are the focal points for audit procedures. Furthermore, audit procedures are the means to answer the key questions posed by management’s assertions. The ASB assertions are in more detail than the PCAOB assertions and are categorized into transaction assertions, bala nce assertions, and presentation and disclosure assertions. They include the following additional assertions: cutoff, accuracy, valuation, classification, and understandability. Exhibit 1. 4 explains the difference between ASB and PCAOB assertions. . 12Holding a belief that a potential conflict of interests always exists causes auditors to perform procedures to search for errors or frauds that would have a material effect on financial statements. This tends to make audits more extensive for the auditor and more expensive for the client. The situation is not a desirable one in the vast majority of audits where no errors or frauds exist. However, errors and financial reporting frauds have happened too often. Users of financial statements and audit reports expect auditors to detect material misstatements. . 13Some examples of assurance engagements include: †¢ Internet Website certification (CPA WebTrust) †¢ Accounts receivable review and cash enhancement †¢ Third-party r eimbursement maximization †¢ Rental property operations review †¢ Customer satisfaction surveys †¢ Benchmarking/best practices †¢ Evaluation of investment management policies †¢ Fraud and illegal acts prevention and deterrence †¢ Information systems security reviews (SysTrust) †¢ Internal audit strategic review . 14Major areas of public accounting services: †¢ Assurance services (including audit services and other attestation engagements) †¢ Tax consulting services †¢ Consulting services 1. 15Operational auditing is the study of business operations for the purpose of making recommendations about the economic and efficient use of resources, effective achievement of business objectives, and compliance with company policies. The AICPA views operational auditing as a type of management advisory service offered by public accounting firms. 1. 6The elements of expanded-scope auditing include: (1) financial and compliance audits, (2) economy and efficiency audits, and (3) program results audits. 1. 17Compliance auditing involves a study of an organization’s policies, procedures, and performance in following laws, rules, and regulations. An example is a school’s policies, procedures, and performance in determining eligibility for a free meal program. 1. 18Other kinds of auditors include IRS agents/auditors, state and federal bank examiners, state insurance department auditors, and fraud auditors. 1. 9The purpose of continuing education is to ensure that CPAs in practice maintain their expertise at a sufficiently high level in light of evolving business conditions and new regulations. For CPAs in public practice, 120 hours of continuing education is required every three years, with no less than 20 hours in any one year. For CPAs not in public practice, the general requirement is 120 or fewer (90 in some states) every three years. 1. 20Everything cannot be learned in the classroom, and some on-the-job experi ence is helpful before a person is foisted off on the public as a licensed professional. Also, the experience weeds out some persons who do not want to take the trouble to be involved in accounting work. 1. 21State boards administer the state accountancy laws. State boards make physical arrangements to give the CPA examination, collect the examinations, receive the grades from the AICPA grading activity, and notify candidates whether they passed or failed. After satisfying state requirements for education and experience, successful candidates are awarded the CPA certificate by a state board. At the same time, new CPAs must pay a fee to obtain a state license to practice. Thereafter, state boards of accountancy regulate the behavior of CPAs under their jurisdiction (enforcing state rules of conduct) and supervise the continuing education requirements. 1. 22After becoming a CPA licensed in one state, a person can obtain a CPA certificate and license in another state. The process is known as reciprocity. CPAs can file the proper application with another state board of accountancy, meet the state’s requirements, and obtain another CPA certificate. Many CPAs hold certificates and licenses in several states. From a global perspective, individuals must be licensed in each country. Similar to CPAs in the United States, â€Å"Chartered Accountants† (CAs) practice in Australia, Canada, Great Britain, and India. Efforts are currently underway through NASBA to streamline the reciprocity process so that CPAs can practice across state lines without having to have 50 different licenses. SOLUTIONS FOR MULTIPLE CHOICE-QUESTIONS 1. 23a. IncorrectThis is an attestation to the prize promoter’s claims. b. IncorrectThis is an audit engagement to give an opinion on financial statements. c. IncorrectThis is an assurance engagement on newspaper’s circulation data. . IncorrectThis is an assurance engagement on the performance of golf balls. e. CorrectSince attestation and audit engagements are subsets of assurance engagements, all are assurance engagements. 1. 24a. CorrectThis statement characterizes professional skepticism. b. Incorrectâ€Å"Exclusively an auditor† is not an idea that seems to speak of â€Å"skepticism. † c. IncorrectProfessio nal obligations† is not an idea that seems to speak of â€Å"skepticism. † d. IncorrectThis is more an assumption of necessity than of skepticism. 1. 25a. Incorrect While work on a forecast is covered by the attestation standards, the auditors should give assurance or a disclaimer. b. Correct This is the basic definition of attestation–giving a report on reliability of an assertion one party makes to another. c. Incorrect Tax work is not an attestation service. d. Incorrect Litigation and expert witness services are not attestation services. 1. 26a. IncorrectThe objective of environmental auditing is to help achieve and maintain compliance with environmental laws and regulations and to help identify and correct unregulated environmental hazards b. IncorrectThe objective of financial auditing is to obtain assurance on the conformity of financial statements with generally accepted accounting principles. c. Incorrect The objective of compliance auditing is the entity’s compliance with laws and regulations. d. CorrectOperational auditing refers to the study of business operations for the purpose of making recommendations about the economic and efficient use of resources, effective achievement of business objectives, and compliance with company policies. 1. 27a. IncorrectWhile not the primary objective of an operational audit, auditors should still be concerned about compliance with financial accounting standards. b. CorrectThis statement is part of the basic definition of operational auditing. c. IncorrectAn operational audit does not focus on the financial statements. d. IncorrectAnalytical tools and skills are an important part of financial auditing. 1. 28a. CorrectThe proper reference is to the appropriate reporting framework. b. IncorrectThe AICPA does not refer only to the FASB for the appropriate reporting framework. c. IncorrectThe reference to the SEC is wrong. d. IncorrectThis is an abstract of the AAA definition. 1. 29d. CorrectWhile â€Å"complexity,† â€Å"remoteness,† and â€Å"consequences† are good answers, â€Å"skepticism,† or potential conflict of interest, generally drives the demand for audited financial statements. 1. 30d. CorrectSarbanes-Oxley prohibits the provision of all of the services listed in answers a, b, and c, therefore, d (all of the above) is the best response. 1. 31a. IncorrectAuditors do not reduce business risk. b. CorrectAuditors give some assurance that the information risk is low. c. IncorrectComplexity creates demand for accounting services, but is not an audit objective. d. IncorrectAuditors only indirectly control the timeliness of financial statements. 1. 32d. CorrectAnswers a, b, and c refer to a financial statement audit, an internal controls attestation engagement, and an operational audit, respectively. Compliance refers to following laws, rules, regulations, and policies. 1. 33d. CorrectWhile answers a, b, and c are true, experience, education, and successful completion of the Uniform CPA are all necessary to be licensed as a CPA. 1. 34d. CorrectThe mission of the U. S. Government Accountability Office is to ensure that public officials are using public funds efficiently, effectively, and economically. 1. 35b,d CorrectThe two categories of performance audits are economy and efficiency audit and program audits. 1. 36c. CorrectReview of credit ratings of customers gives indirect evidence of the collectibility (valuation) of accounts receivable. 1. 37a. IncorrectRhonda’s representations are not sufficient evidence to support assertions made in the financial statements. b. IncorrectDespite Rhonda’s representations, Jones must gather additional evidence to corroborate Rhonda’s assertions. . IncorrectRhonda’s representations are a form of evidence (albeit weak) that should neither be disregarded, nor blindly regarded without professional skepticism. d. CorrectRhonda’s assertions need corroboration. 1. 38a. IncorrectAlthough there is a high level of risk associated with client acceptance, this phrase was created by the au thors. b. CorrectInformation risk is the probability that the information circulated by a company will be false or misleading. c. IncorrectMoral hazard is the risk that the existence of a contract will change the behavior of one or both parties to the contract. d. IncorrectBusiness risk is the probability an entity will fail to meet its objectives and, ultimately, fail. 1. 39a. CorrectCompleteness includes cutoff which refers to accounting for revenue, expense, and other transactions in the proper period (neither postponing some recordings to the next period nor accelerating next-period transactions into the current-year accounts). 1. 40d. CorrectThe objective related to rights and obligations is to establish with evidence that amounts reported as assets of the company represent its property rights and that the amounts reported as liabilities represent its obligations. . 41b. CorrectManagement’s existence assertion states that reported assets, liabilities, and equities actually exist. 1. 42a. IncorrectUnder Sarbanes-Oxley, professional service firms are prevented from acting in a managerial decision making role for an audit client. b. IncorrectUnder Sarbanes-Oxley, professional service firms are prevented from auditing the firm’s own work on an audit client. c. IncorrectUnder Sarbanes-Oxley, professional service firms may only provide tax consulting service to an audit client with the audit committee’s approval. d. CorrectSarbanes-Oxley prevents professional service firms from engaging in any of the above listed capacities. 1. 43 d. CorrectReciprocity refers to the process through which CPAs licensed in one state can obtain a CPA certificate and license in another state. 1. 44a. CorrectAuditing is a subset of attestation engagements that focuses on the certification of financial statements. b. IncorrectAuditing is a subset of attestation that provides higher assurance than that provided by an attestation engagement. c. IncorrectConsulting engagements focus on providing clients with advice and decision support. d. IncorrectAssurance engagements are designed to improve the quality of information, or its context, for decision makers. 1. 45d. CorrectAlthough auditing is a subset of attestation, and attestation is a subset of assurance, the focus of the engagements tends to be very specific. 1. 46d. CorrectCredibility, advancement, and monetary rewards are all reasons to become certified. SOLUTIONS FOR EXERCISES AND PROBLEMS 47. Audit, Attestation, and Assurance Services Students may encounter some difficulty with this matching because the Special Committee on Assurance Services listed many things that heretofore ave been considered â€Å"attestation services† (long before assurance services were invented). Maybe this is a good vehicle for discussing the considerable overlap between attestation services (attestation standards) and assurance services. †¢ Real estate demand studies — Assurance service (listed by SCAS but not in the textbook chapter) †¢ Ballot for awards show — Assurance service (listed by SCAS but not in the textbook chapter) [But PwC attested to the Academy Awards ballot results long before assurance services were invented] Utility rate applications — Attestation service (or maybe a consulting service; I’m somewhat surprised the SCAS did not list it as an assurance service. ) †¢ Newspaper circulation audits –Assurance service (listed by SCAS but not in the textbook chapter) [But this work has appeared in prior years in examples of attestation services] †¢ Third-party reimbursement maximization — Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Annual financial report to stockholders — Audit service Rental property operations review — Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Examination of financial forecasts and projections — Attestation service (but also listed by SCAS as an assurance service) †¢ Cus tomer satisfaction surveys– Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Compliance with contractual requirements — Attestation service (but also listed by SCAS as an assurance service) †¢ Benchmarking/best practices — Assurance service (listed by SCAS and listed in the textbook chapter) Evaluation of investment management policies — Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Information systems security reviews — Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Productivity statistics — Attestation service (but also listed by SCAS as an assurance service under various descriptions) †¢ Internal audit strategic review — Assurance service (listed by SCAS and listed in the textbook chapter) †¢ Financial statements submitted to a bank loan officer — Audit service 1. 49 ASB Assertions PCAOB Assertion |Corresponding ASB ass ertion |Nature of assertion | |Existence or Occurrence |Existence |Balance | | |Occurrence |Transactions | | | |Disclosures | |Rights and Obligations |Rights and Obligations |Balances | | | |Disclosures | |Completeness |Completeness |Transactions | | | |Balances | | | |Disclosures | | |Cutoff Transactions | |Valuation and Allocation |Accuracy |Transactions | | | |Disclosures | | |Valuation |Balances | | | |Disclosures | |Presentation and Disclosure |Classification |Transactions | | | |Disclosures | | |Understandability |Disclosures | 1. 52Identification of Audits and Auditors The responses to this matching type of question are ambiguous. The engagement examples are real examples of external, internal and governmental audit situations. You might point out to students that the distinctions among compliance, economy and efficiency and program results audits are not always clear. The â€Å"solution† is shown below in matrix form, showing some engagement numbers in two or t hree cells. The required schedule follows. |Type of Audit | | |Financial Statement | |Economy, Efficiency |Program | |Auditor | |Compliance | |Results | |Independent CPA |2, 10 | | | | |Internal Auditor | |6, 8 |4, 8 | | |Governmental (GAO) | | |1, 3 |1, 3, 9 | |IRS Auditor | |5 | | | |Bank Examiner | |7 | | | |Proprietary school’s training expenses |Economy and Efficiency Program Results |Governmental (GAO) | |Advertising agency financial statements |Financial statement |Independent CPAs | |Dept. f Defense launch vehicle |Economy and Efficiency or Program Results |Governmental (GAO) | |Municipal services |Economy and Efficiency |Internal auditors | |Tax shelters |Compliance |IRS auditors | |Test pilot reporting |Compliance |Internal auditors | |Bank solvency |Compliance |Bank examiners | |Materials inspection by manufacturer |Compliance or Economy and Efficiency |Internal auditors | |States’ reporting chemical use data |Program goal |Governmental (GAO) | |Sports compl ex forecast |Financial statement |Independent CPAs | SOLUTIONS FOR REVIEW CHECKPOINTS 2. 1For independent (external) auditors of financial statements, practice standards are issued by the AICPA Auditing Standards Board (in the form of Statements on Auditing Standards) and the Public Company Accounting Oversight Board (in the form of Auditing Standards). Statements on Auditing Standards are appropriate for the audits of nonpublic entities, while Auditing Standards are appropriate for the audits of public entities. For governmental auditors, the Government Accountability Office issues Government Auditing Standards (also known as the â€Å"Yellow Book†). For internal auditors, the Institute of Internal Auditors issues Statements of Internal Auditing Standards (also known as the â€Å"Red Book†). For fraud auditors, the Association of Certified Fraud Examiners issues Professional Standards and Practices for Certified Fraud Examiners. For auditors in other countries, the IFAC International Auditing and Assurance Standards Board issues International Standards on Auditing and Assurance. 2. 2Generally accepted auditing standards are standards that identify necessary qualifications and characteristics of auditors and guide the conduct of the audit examination. Generally accepted accounting principles represent the requirements for the preparation and presentation of financial statements and accompanying footnote disclosures. These two types of standards are related to one another because a primary objective of a GAAS audit is to allow auditors to conclude whether an entity’s financial statements are prepared and presented in conformity with GAAP. 2. 3The three fundamental principles are: 1. Responsibilities, which involves having appropriate competence and capabilities, complying with relevant ethical requirements, maintaining professional skepticism and exercising professional judgment. 2. Performance, which requires auditors to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement by: (1) planning the work and properly supervising assistants; (2) determining and applying appropriate material levels; (3) identifying and assessing the risk of material misstatement; and, (4) obtaining sufficient appropriate audit evidence. 3. Reporting, which requires the auditor to express an opinion as to whether the financial statements are prepared in accordance with the applicable financial reporting framework. Auditing procedures relate to acts to be performed during the engagement. Auditing standards deal with measures of the quality of performance of those acts and the objectives to be attained. Auditing standards are less subject to change and provide the criteria for rejecting, accepting, or modifying auditing procedures in a given circumstance. An example of the relative stability of standards and procedures is found in the change from non-computerized information systems to computerized information systems. New auditing procedures were required to evaluate computerized information systems, but auditing standards remained unchanged and were the criteria for determining the adequacy of the new auditing procedures. 2. 4Independence in fact represents auditors’ mental attitudes (do auditors truly act in an unbiased and impartial fashion with respect to the client and fairness of its financial statements? ). Independence in appearance relates to financial statement users’ perceptions of auditors’ independence. Auditors can be independent in fact but not perceived to be independent. For example, ownership of a small interest in a public client would probably not influence auditors’ behavior with respect to the client. However, it is likely that third-party users would not perceive auditors to be independent. 2. Due care reflects a level of performance that would be exercised by reasonable auditors in similar circumstances. Auditors are expected to have the skills a nd knowledge of others in their profession (known as that of a prudent auditor) and are not expected to be infallible. 2. 6Professional skepticism is a state of mind that is characterized by appropriate questioning and a critical assessment of audit evidence. Professional judgment is the auditors’ application of relevant training, knowledge, and experience in making informed decisions about appropriate courses of action during the audit engagement. Auditors are required to demonstrate professional skepticism and professional judgment throughout the entire audit process. 2. Reasonable assurance recognizes that a GAAS audit may not detect all material misstatements and auditors are not â€Å"insurers† or â€Å"guarantors† regarding the fairness of the company’s financial statements. The following characteristics of an audit do not permit auditors to provide absolute assurance: †¢ Mistakes and misinterpretations may occur †¢ Management judgments an d estimates affect financial reporting †¢ Audit procedures cannot always be relied upon to detect misstatements †¢ Audit engagements must be conducted within a reasonable period of time and so as to achieve a balance between benefit and cost. 2. 8Three elements of planning and supervision considered essential in audit practice are: †¢ A written audit plan. †¢ An understanding of the client’s (auditee’s) business. Policies to allow an audit team member to document disagreements with accounting or auditing conclusions and disassociate him or herself from the matter. 2. 9The timing of the auditors’ appointment is important because auditors need time to properly plan the audit and perform the necessary work without undue pressure from tight deadlines. 2. 10Materiality is the dollar amount that would influence the lending or investing decisions of users; this concept recognizes that auditors should focus on matters that are important to financial statement users. Materiality should be considered in planning the audit, performing the audit, and evaluating the effect of misstatements on the entity’s financial statements. 2. 1Auditors obtain an understanding of a client, including its internal control, as a part of the control risk assessment process primarily in order to plan the nature, timing and extent of substantive audit procedures. A secondary purpose is because of auditors’ responsibilities for reporting on client’s internal controls under Auditing Standard No. 5. 2. 12As the client’s internal control is more effective (a lower level of control risk), auditors may use less effective substantive procedures (a higher level of detection risk). Conversely, when the client’s internal control is less effective (a higher level of control risk), auditors must use more effective substantive procedures (a lower level of detection risk). 2. 13Audit evidence is defined as the information used by a uditors in arriving at the conclusion on which the audit opinion is based. 2. 4External documentary evidence is audit evidence obtained from another party to an arm’s-length transaction or from outside independent agencies. External evidence is received directly by auditors and is not processed through the client’s information processing system. External-internal documentary evidence is documentary material that originates outside the bounds of the client’s information processing system but which has been received and processed by the client. Internal documentary evidence consists of documentary material that is produced, circulates, and is finally stored within the client’s information processing system. Such evidence is either not circulated to outside parties at all or is several steps removed from third-party attention. 2. 5In general, evidence that is completely external in nature is most reliable, because the client has not influenced its processing . In contrast, evidence that is completely internal in nature is least reliable, as it may represent a fictitious transaction created or modified by client personnel to enhance perceptions of the client’s financial statements. 2. 16As auditors need to achieve lower levels of detection risk, more appropriate evidence needs to be obtained. Thus, auditors should gather higher quality evidence (more reliable evidence). For example, auditors may choose to obtain evidence from external sources rather than internal sources. In addition, for lower levels of detection risk, auditors need to gather more sufficient evidence. Because sufficiency relates to the quantity of evidence, a greater number of transactions or components of an account balance should be examined. 2. 17A financial reporting framework is a set of criteria used to determine the measurement, recognition, presentation, and disclosure of material items in the financial statements. The financial reporting framework is related to auditors’ reporting responsibilities because this framework serves as the basis against which the financial statements are evaluated and the auditors’ opinion on the financial statements is expressed. 2. 18Four types of opinions and their conclusions: Type | |Conclusion | |Unqualified opinion | |Financial statements are presented in conformity with GAAP. | |Adverse opinion | |Financial statements are not presented in conformity with GAAP. | |Qualified opinion | |Financial statements are presented in conf ormity with GAAP, except for one or | | | |more departures or issues of concern. | |Disclaimer of opinion | |An opinion cannot be issued on the financial statements. | 2. 19The auditors’ report is dated at the point when all significant procedures have been completed by auditors and auditors have gathered sufficient appropriate evidence. This date is referred to as the audit completion date. 2. 20Public accountants should issue a report when they are associated with financial statements because users may mistakenly assume that an audit has been conducted and that the entity’s financial statements are fairly presented according to GAAP. 2. 21The purpose served by the attestation standards is to guide work in attestation areas and engagements other than audits of financial statements. 2. 22The major differences between attestation standards and generally accepted auditing standards (GAAS) lie in the areas of practitioner competence, materiality and the risk of material misstatement, and reporting. GAAS presume knowledge of accounting and require competence and capabilities as auditors (meaning auditors of financial statements). The attestation standards are more general, requiring training and proficiency in the â€Å"attest function† and knowledge of the â€Å"subject matter of the assertions. † The attestation standards have no specific requirement for determining materiality levels or obtaining and understanding of the entity and its environment to assess the risk of material misstatement. Because attestation engagements may cover information not confined to accounting and financial assertions, these activities may not be appropriate for all attest engagements. Reporting is different because attestations on nonfinancial information do not depend upon generally accepted accounting principles. In addition, GAAS do not address two reporting issues (stating significant reservations about the engagement and indicating that the report is only intended for specified parties) that are important reporting aspects for attestation engagements. 2. 23A system of quality control provides firms with reasonable assurance that the firm and its personnel (1) comply with professional standards and applicable regulatory and legal requirements and (2) issue reports that are appropriate in the circumstances. The six elements of a system of quality control are: . Leadership responsibilities for quality within the firm (â€Å"tone at the top†) 2. Relevant ethical requirements 3. Acceptance and continuance of clients 4. Human resources 5. Engagement performance 6. Monitoring 24. In deciding whether to accept or continue an engagement with a client, firms sho uld consider: †¢ The integrity of the client and the identity and business reputation of its owners, key management, related parties, and those charged with governance. †¢ Whether the firm possesses the competency, capability, and resources to perform the engagement. †¢ Whether the firm can comply with the necessary legal and ethical requirements. If firms decide to withdraw from an engagement, the firm should document significant issues, consultations, conclusions, and the basis for any conclusions related to the decision to withdraw. 25. Typically, firms that audit nonpublic companies have peer reviews conducted through the AICPA’s Center for Public Company Audit Firms Peer Review Program. While firms that are subject to PCAOB review requirements can elect to have peer reviews conducted under this program, most choose not to do so. 2. 26The PCAOB’s monitoring role for firms providing auditing services to public entities includes registering public accounting firms and conducting inspections of registered public accounting firms (similar to peer reviews). 2. 7The frequency of PCAOB inspections depends upon the number of audits conducted by member firms. For firms performing audits for more than 100 public companies, inspections are required on an annual basis. For those performing audits for fewer than 100 publi c companies, inspections are conducted every three years. SOLUTIONS FOR MULTIPLE-CHOICE QUESTIONS 2. 28a. CorrectGathering audit evidence is a component of the performance principle. b. IncorrectWhile reasonable assurance is related to gathering audit evidence, this is not one of the categories of principles c. IncorrectThe reporting principle relates to the contents of the auditors’ report d. IncorrectThe responsibilities principle relates to the personal integrity and professional qualifications of auditors. 2. 29a. IncorrectThis practice relates to accountants’ competence and capabilities, not due care. b. IncorrectThis practice relates to the reporting principle. c. IncorrectSufficiency of evidence relates to the performance principle and not due care. d. CorrectThese practices are a part of due care. 2. 30a. IncorrectGAAS relates to the conduct of audit engagements and not overall professional services. b. CorrectStandards within a system of quality control are firm- (rather than auditor-) related. c. IncorrectGAAP relates to accounting and financial reporting, rather than auditing practices. d. IncorrectInternational auditing standards govern the conduct of audits conducted across international borders. 2. 31a. IncorrectRelying more extensively on external evidence is related to the appropriateness (or quality) of evidence. b. IncorrectFocusing on items with more significant financial effects on the financial statements is related to materiality. c. CorrectProfessional skepticism is characterized by appropriate questioning and a critical assessment of audit evidence. d. IncorrectFinancial interests are most closely related to auditors’ independence. 2. 32a. CorrectAuditors study internal control to determine the nature, timing, and extent of substantive tests. b. IncorrectConsulting suggestions are secondary objectives in an audit. c. IncorrectInformation about the entity’s internal control is, at best, indirect evidence about assertions in the financial statements. d. IncorrectInformation about the entity’s internal control provides auditors with little opportunity to learn about changes in accounting principles. 2. 33a. IncorrectExternal evidence is considered to be relatively reliable. b. CorrectManagement representations should least affect auditors’ conclusions, as they have not been validated or corroborated by external parties. c. IncorrectAuditor-prepared evidence is considered to be the most reliable form of evidence. d. IncorrectAlthough a representation of a client employee, inquiry of the entity’s legal counsel is considered more reliable than that of entity management. 2. 34a. IncorrectInquiry of management should least affect auditors’ conclusions. b. IncorrectAlthough very persuasive, auditors’ personal knowledge (choice d) provides the most persuasive evidence c. IncorrectObservation of a client’s procedures provides evidence on the effectiveness of the client’s internal control, but not the existence assertion for newly-acquired computer equipment. d. CorrectAuditors’ personal knowledge provides the most persuasive evidence. 2. 35a. IncorrectInquires of client personnel are the least reliable form of evidence. b. IncorrectWhile more reliable than inquiries (choice a), inspection of internal documents is relatively low in terms of reliability. c. IncorrectWhile sales invoices are documents created by external parties, the fact that these documents were received from client personnel decreases their reliability. d. CorrectBecause the statements were received directly from outside parties, this is a more reliable form of evidence than choice (c). 2. 36a. IncorrectDocumentation of this nature would not be related to independence. b. IncorrectWhile the quality of the documentation and the conclusions included in the documentation might provide information about competence and capabilities, choice (c) is more appropriate. c. Correct Initials of the preparer and reviewer provide evidence that the documentation was reviewed, which relates to planning and supervision. d. IncorrectWhile the quality of the documentation and the conclusions included in the documentation might provide information about sufficient appropriate evidence, choice (c) is more appropriate 2. 37NOTE TO INSTRUCTOR: Since this question asks students to identify the requirement that is not included in attestation standards, the response labeled â€Å"correct† is not included in attestation standards and those labeled â€Å"incorrect† are included in attestation standards. a. IncorrectAttestation standards require adequate knowledge of the subject matter. b. CorrectAn understanding of the client’s environment (including internal control) is not required under attestation standards, because internal control may not always be relevant to the subject matter of the attestation. c. IncorrectAttestation standards require sufficient evidence to be gathered. d. IncorrectAttestation standards require independence in mental attitude. 2. 38NOTE TO INSTRUCTOR: Since this question asks students to identify the concept that is least related to due care, the response labeled â€Å"correct† is least related to due care and those labeled â€Å"incorrect† are more related to due care. a. IncorrectDue care requires the level of skills and knowledge of others in the auditors’ profession, which would require independence in fact. b. IncorrectSee choice (a) above. c. IncorrectDue care refers to the performance of a â€Å"prudent† auditor. d. CorrectDue care recognizes that mistakes and misinterpretations may occur during the audit. 2. 39a. IncorrectInternal documents are a relatively low quality of evidence. b. IncorrectManagement representations (and the related verbal inquiries) are the lowest quality of evidence. c. IncorrectWhile direct, external evidence is of reasonable quality, it is of lower quality than direct personal knowledge of the auditor (choice d). d. CorrectDirect, personal knowledge of auditors is the most appropriate form of evidence. 2. 40a. IncorrectWhile it may increase auditors’ knowledge about the client, obtaining an understanding of a client’s internal control does not directly influence auditors’ competence and capabilities. b. IncorrectObtaining an understanding of a client’s internal control does not directly influence auditors’ independence. c. IncorrectObtaining an understanding of a client’s internal control does not directly help satisfy the quality control standard about audit staff professional development. d. CorrectThe primary purpose of obtaining an understanding of a client’s internal control is to plan the nature, timing, and extent of substantive audit procedures on an engagement. 2. 41d. CorrectIndependence confirmations would ensure that all firm personnel are independent with respect to that firm’s clients, which is related to the â€Å"Relevant Ethical Requirements† element of a system of quality control. It would not relate to acceptance and continuance of clients (a), engagement performance (b), or monitoring (c). 2. 42b. CorrectGovernment auditing standards are issued by the Government Accountability Office (GAO). Governmental accounting standards are issued by the Governmental Accounting Standards Board. 2. 43a. CorrectConsultation with a specialist demonstrates due care if auditors do not have expertise in the area in question. b. IncorrectAuditors are experts in financial matters, not areas of art (and other collectibles) valuation. c. IncorrectGAAS applies to all audit engagements, including audit engagements for not-for-profit organizations. d. IncorrectSince (a) is correct, (d) cannot be correct. 2. 4NOTE TO INSTRUCTOR: Since this question asks students to identify the topic that is not been addressed in the auditors’ report, the response labeled â€Å"correct† is not addressed in the auditors’ report and those labeled â€Å"incorrect† are addresse d in the auditors’ report. a. IncorrectThe responsibilities of the auditor and management are provided in the introductory paragraph. b. CorrectAuditors provide reasonable (but not absolute) assurance in an audit engagement (this is noted in the scope paragraph of the auditors’ report). c. IncorrectA description of the audit engagement is provided in the scope paragraph of the auditors’ report. d. IncorrectThe auditors’ opinion on internal control over financial reporting is provided in the internal control paragraph of the auditors’ report. 2. 45a. CorrectAttestation standards differ from generally accepted auditing standards in that they apply to engagements other than those on historical audited financial statements. b. IncorrectAttestation standards require that the practitioner be independent. c. IncorrectAttestation standards may apply to prospective â€Å"what if† financial statements. d. IncorrectAttestation standards include requirements related to evidence. SOLUTIONS FOR EXERCISES AND PROBLEMS 2. 47Performance Principle The important elements of the performance principle and their relation to the C. Reis Company audit are: 1. Auditors must plan the work and appropriately supervise any assistants. Fulfilling this element would include the preparation of an audit plan for accounts receivable and reviewing it with the assistant prior to beginning the examination. These tasks were not done. Also, the completed audit documentation should have been reviewed to determine whether an adequate examination was performed. The illustration states that this procedure was followed. 2. Auditors must determine and apply appropriate materiality levels throughout the audit. This scenario did not address the process through which materiality levels were determined, so potential strengths and weaknesses related to materiality cannot be assessed. 3. Auditors must identify and assess risks of material misstatement. This element requires auditors to obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures. The case presented did not reference any work on the internal control. Complete reliance upon prior-year audit documentation in lieu of an evaluation of the existing internal control is improper, because changes may have been implemented to the system and controls by the client. 4. Auditors must obtain sufficient appropriate audit evidence. The assistant’s preparation of audit documentation, confirmation requests, and other procedures seem to fulfill the requirements of this standard if the audit work is properly performed and is of sufficient scope. 2. 48Time of Appointment and Planning From a theoretical viewpoint (and, in fact, from a practical viewpoint as well) such short notice of a request for an audit causes difficulties with planning the audit work, establishing staffing requirements, and reviewing the work; all of these features are important elements in the exercise of due care. The December 26 – January 20 period is a serious time constraint for an initial audit engagement. The greatest difficulties involve due care as well as the ability to appropriately perform the engagement (planning and supervision, determining materiality levels, identifying and assessing risks of material misstatement, and obtaining sufficient appropriate evidence). In view of the short notice and the time constraint, there may be some question as to whether an audit could be adequately completed by January 20. 2. 55Principles Case Study | | | | |Responsibilities | | | | | | | |1. Auditors are responsible for appropriate competence and | |1. It was inappropriate for Holmes to hire the two students to | |capabilities to perform the audit. | |conduct the audit. The examination must be conducted by persons | | | |with proper education and experience in the field of auditing. | | | |Inexperienced persons can assist, if they are supervised. | |2. Auditors are responsible for complying with relevant ethical | |2. To satisfy the independence requirement, Holmes must be | |requirements. |without bias with respect to the client under audit. Because of | | | |the financial interest in the bank loan, Holmes is neither | | | |independent in fact nor appearance with respect to the assignment | | | |undertaken. In addition, because of a number of actions (hiring | | | |unqualified individuals, failure to supervise those individuals, | | | |etc. ), Holmes did not appear to exhibit due care. | | | | | | | | | | |3. The fact that Holmes merely accepted the financial statements | | | |without questioning any evidence demonstrates lack of professional| |3. Auditors are responsible for maintaining professional | |skepticism (as well as a lack of good professional judgment). | |skepticism and exercising professional judgment throughout the | | | |planning and performance of the audit. | | | | | | |Performance | | | | | | | |1. The auditor must adequately plan the work and must properly | |1. This element recognizes that early appointment of auditors has | |supervise any assistants. |advantages for auditors and the client. Holmes accepted the | | | |engagement without considering the availability of staff. In | | | |addition, Holmes failed to supervise the assistants. The work | | | |performed was not adequately planned. | | | | | |2. The auditor must determine and apply appropriate materiality | |2. There was no discussion that appropriate materiality levels | |level or levels. | |were determined or applied for the audit by either Holmes or the | | | |two accounting students. Thus, compliance with this element is | | | |difficult to assess. | |3. The auditor must assess the risk of material misstatement based| |3. Holmes did not study the client’s internal control nor did the | |on the entity and its environment. | |assistants. There appears to have been no audit examination at | | | |all. The work performed was more an accounting service than it was| | | |an auditing service. | | | | | |4. The auditor must obtain sufficient appropriate audit evidence | |4. No evidence was obtained to support the financial statements. | |about whether material misstatements exist. | |The auditors merely checked the mathematical accuracy of the | | | |records and summarized the accounts. Standard audit procedures and| | | |techniques were not performed. | | | | |Reporting | | | | | | | |1. Based on evaluation of the evidence obtained, the auditor | |1. Because a proper examination was not conducted, the report | |expresses an opinion in accordance with the auditor’s findings, or | |should indicate that no opinion can be expressed as to the fair | |states that an opinion cannot be expressed, in the form of a written | |presentation of the financial statements in accordance with | |report. The opinion states whether the financial statements are | |generally accepted account ing principles. |prepared, in all material respects, in accordance with the | | | |appropriate financial reporting framework. | | | | | | | 2. 57System of Quality Control a. Leadership responsibilities for quality within the firm b. Engagement performance c. Human resources d. Monitoring e. Human resources f. Relevant ethical requirements g. Acceptance and continuance of clients h. Leadership responsibilities for quality within the firm i. Engagement performance SOLUTIONS FOR REVIEW CHECKPOINTS 12. Management prepares a report on the effectiveness of internal control over financial reporting. The auditors prepare reports on (1) the entity’s financial statement and other disclosures and (2) the effectiveness of the entity’s internal control over financial reporting. These can be presented as two separate reports or a combined report. 2. Management’s report on internal control over financial reporting consists of the following major components: †¢ A statem ent indicating that management is responsible for establishing and maintaining adequate internal control over financial reporting. †¢ A statement identifying the framework used by management to assess the effectiveness of the entity’s internal control. Management’s opinion on the effectiveness of the entity’s internal control, including an explicit statement as to whether the internal control over financial reporting is effective. †¢ A statement that the registered accounting firm auditing the financial statements (auditor) has issued an attestation report on the entity’s internal control over financial reporting. 12. 3The auditors’ report serves to communicate to users three specific statements with respect to the financial statements, the conduct of the audit, and the entity in general. First, the report indicates whether the financial statements are presented in conformity with GAAP. Second, auditors use their report to indicate any un usual aspects of the audit examination. Third, even if the financial statements are fairly presented and no problems were noted in the conduct of the audit, the auditors can use the report to communicate information useful to decision makers that may not appear on the face of the financial statements. 12. 4Nine important elements of the auditors’ standard report are: 1. Title. The title should contain the word independent, as in â€Å"Independent Registered Public Accounting Firm† or â€Å"Independent Auditors†. 2. Address. The report shall be addressed to the client, which occasionally may be different from the auditee. 3. Notice of Audit. A sentence should identify the financial statements and indicate that they were audited. This appears in the introductory paragraph. 4. Responsibilities. The report should state management’s responsibility for the financial statements and the auditors’ responsibility for the report. These statements are also in the introductory paragraph. 5. Description of the Audit. The second paragraph (scope paragraph) should declare that the audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and describe the principal characteristics of an audit, including a statement of belief that the audit provided a reasonable basis for the opinion. 6. Opinion. The report shall express an opinion (opinion paragraph) regarding conformity of the financial statements with accounting principles generally accepted in the United States of America. 7. Internal Control. The report should reference the auditors’ examination, report, and opinion on the client’s internal control over financial reporting. 8. Signature. The auditors (partner of the audit team) shall sign the report, manually or otherwise. 9. Date. The report shall be dated using the date