Depository institutions are supposed to be managed to limit risk. Their managers, thus, may not be conditioned to operate prudently in more speculative securities businesses... The case against preserving the Glass-Steagall Act: 1. Depository institutions will now operate in "deregulated" financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated and to foreign financial institutions operating without much restriction from the Act.
Question CA1-7: Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Comment on the appropriateness of this viewpoint. I do not believe that this viewpoint is a good idea.
Although you might have made a profit on the sale of the item, there is a cash flow gap as you have not yet received the funds to pay for the item yourself. Simple things like can put smaller businesses in a lot of financial trouble. This cash flow gap could damage credit ratings, miss other opportunities, and force the borrowing of
AU1 Assignment 2 Task 1: Purpose of auditing a. Information risk is the risk that the financial statements cannot appropriately present business activities, and provide false and/or misleading information to the financial statements users. There are some causes that arise information risk, two of them are: The first one is Asymmetry of information. It arises due to remoteness of information, bias or motivation of those providing information, high volumes of transactions and data, and the complexity of transaction. The second one is errors from weak accounting system.
Also an insurance company may not pay out a claim based upon certain factors. So sometimes insurance is not the answer. There are several types of risk that aren’t insurable. They are reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk. Portfolio approach to management involves setting objectives for value preservation and enhancement, developing and implementing strategies for allocating resources to existing and new
Each of these contributes to holes in the security, bugs and errors and disruption of business practices. The potential risks posed to the organization vary by each of these threats. For malicious security attacks the risks are high. Malicious security attacks pose a direct risk to the everyday processes of an organization. Malicious attacks can be brought on by disgruntled employees that want to get back at the organization by disrupting the flow of operation which causes financial loss for the company.
MGT600: Unit 2 DB2: Bias and Judgment Introduction In order to successfully run a business, it is important to make decisions without the element of bias. However, it is sometimes difficult for the decision maker to guard themselves against bias. Human beings are often ruled by their emotions and therefore bias occurs in our judgment most times on unconscious level. Bias is a predisposition to behave in a certain way. (Bazerman and Moore, 2010).
1. Why aren’t risk analysis tools like Monte Carlo simulation and decision tree analysis more common in analyzing IT project risks? Risk analysis tools like Monte Carlo simulation and decision tree analysis are not more common in analyzing IT project risks because a Monte Carlo simulation is done by random generations while decision tree analysis is figured by chance. These random generations do not predict specific results. 2.
In fact, like other professions, personal values come into play in the accounting decisions and judgments made by the decision makers, so full disclosure might mean different things to different people. Legal checklists have mandatory items, but the financial picture might still be vague or lack numbers to give an accurate financial representation of the company at any given time, as shown in the financial statements. For example, if it was totally “objective,” Enron’s accountant would not have been able to “cook” the books to make the company appear to be in a better financial position than it actually was. The accountant and other Enron professionals would not have ended up in court for fraud and the likes. Even though the accounting profession has guiding principles (GAAP), they are not absolute, but subject to human judgment and interpretation and, at times, the lack of compliance leads to fraud (e.g., Enron, WorldCom, and others).
This could lead to interest drain, leading to a decrease in gain. Benefits associated with using project finance are: - Project finance is less risky for partners in the JV than simply financing it themselves. - Protects the companies from bankruptcy risks since they have limited responsibility. - Protects companies debt capacity for future requirements. - Project is legally independent.