(asic.gov.au) · As the financial markets became mainstream and matured, the access to capital markets and their scrutiny have both increased. Along with the added volatility, the lending markets have seen similar risks as equity markets. With the increased speed of both financial information and market changes, the rating agencies are more important as a first step, as they are to be scrutinized for their ratings and the trend in their rating changes. (investopedia.com) · CRAs and their ratings played a critical role in the recent market turmoil. Unlike securities trading on deeper, more transparent markets, credit ratings have had an inordinate impact on the valuation and liquidity of subprime RMBSs and RMBS backed
The quantity of those involved in buying and selling increased exponentially and in response, the development of modern day concepts such as businessmen and entrepreneurs arose. This coupled with greater internal trade and the encouragement for state legislatures to involve paper money in the expanding economy, resulted in an aspired consumer revolution that deteriorated
Recording also will classify and summarize economic events. The bookkeeping function is included in the recording of economic events. Accounting reports are then communicated to interested internal and external users by means of financial statements. Internal interested users are individuals inside the company who plan, organize and run the business. These users can be comprised of finance directors, marketing managers, human resources, or management.
With the Sarbanes-Oxley Act in place investors are now protected through the improvement of reliability and accuracy of corporate disclosures made in accordance with the securities laws money (Bagranoff, Simkin, & Strand-Norman, 2008). The Sarbanes-Oxley Act made considerable modifications to business practice and corporate governance regulations. Section 404 of the Sarbanes-Oxley Act had the most impact on internal control. Section 404 of this act mandates that companies should provide details on their internal control policies and structures and policies. The Sarbanes-Oxley Act has increased the s increased the reliability and dependability of financial statements.
In the first half of the year earnings for the Resources division have increased, due to higher export coal prices. * Operating in many different geographical areas * Being dependent on customers and supplier chains in each local and overseas areas, as well as different geographical areas of operations. This increases inherent risk due to difficulty to control operation in different locations as well as the climate changes in regards to their products. II. Unusual pressure on management The management is under unusual pressure to perform well and increase returns for shareholders in order to gain more remuneration: * Objective to provide a satisfactory return to shareholders, this would increase inherent risk due to pressure placed on management in order to meet budgets or forecasts * Remuneration plans * Also the directors have significant remuneration plans – they are awarded a lot of
Sarbanes Oxley came into force mainly due to the financial scandals committed by corporate giants like Enron, WorldCom, etc. Since then the Sarbanes Oxley act had been the most important piece of legislation which seriously affects the corporate governance, financial disclosures and total accounting pattern in the companies. After the Sarbanes Oxley act came into force, accounting system and financial statements disclosed by the companies made tremendous progress. This improvement has been possible due to rigorous requirements stated in the Sarbanes Oxley act. Due to this improvement it helps to protect investor confidence in the companies and the US legislature as well.
The users are experts in accounting who identify, record, and communicate economic events of their business to its appropriate users. These users are divided in to two groups, internal users and external users. Managers who plan, organize, and run their business are an example of internal users of accounting information. Examples of these managers include marketing managers, finance directors, company officers, and production supervisors. Investors and creditors are examples of external users of accounting information.
This information gather is viewed through use of the four financial statements that are made available by accounting departments. The income statement, retained earnings statement, balance sheet and the statement of cash flows are the four financial statements available for users. Each statement is supported by each other and each statement is independent of each other as well. The financial statements have their own purpose but when each statement is available it tells the financial story of a company and shows that accounting is very important and necessary in today’s
Wells Fargo Home Mortgage merged with Wachovia Mortgage Corporation on December 31, 2008. Sufian (2010) stated that bank mergers and acquisitions may enable banking firms to benefit from new business opportunities, mergers can create a host of staffing issues, some more critical than others most organizations should create mechanisms for managing their staffing system and their
This fact is due to the increasing population of the aged in the American economy. The rise in the number of the aged population has led to a spontaneous rise in the demand for the Medicare program. The rise in demand of Medicare has triggered a subsequent rise in the cost of health care in the USA. According to statistics disclosed by Bozic (2011), the consumers of Medicare will rise up to 76 million by the end of 2030. Going by the contemporary crisis in the Medicare program of America, Bozic (2011) dictates that the solution to the crisis will demand increase in the tax margin on the employees.