Federal Reserve Paper ECO/212 May 14, 2012 Dr. Mohamed El-Kaissy This paper has the purpose to cover the many topics and aspects of the Federal Reserve as it pertains to monetary policy. The fact that monetary policy can have an indirect effect on the economy is a crucial and valid point. The beginning of the paper talks about the functionality of money and its purpose in government. The analysis will go onto explore the tools that the banking system has at its disposal and give examples as to how their use affects the monetary system. The Federal Reserve has the ability to create many avenues of economic power with just a minimal amount of resources, however; these minimal amounts of resources are very powerful.
Stockholders may assume when reading the financial statements that they would be receiving a higher return each month or quarter when in reality that would not be the case especially if they are planning on switching to LIFO. It is unethical to make a huge financial decision based on only short term goals. The Sabarnes-Oxley act of two-thousand and twelve, contains 11 sections detailing rules and regulations for financial reporting. The SOX act section 404 requires that management of
The think that I learn from this project, when there is economical problem the prices of stock fluctuate whether it goes up or down. This assignment taught me how to better understand the stock market and what we should expect when it falls or goes up. And what could be the risk when investing such a lower market. I learn that various industry have different trend and the way to develop those trend. I learn that the company who mislead their consumer could run to a higher risk.
* Component depreciation happens when an asset has fundamentally different parts that should be depreciated with different treatment. Under IFRS, firms are required to use component depreciation if the parts of the asset offer varying patterns of benefit. The reasoning behind this is that it provides a clearer picture of the assets book value. This method is also permitted under GAAP, but U.S companies rarely use it in practice. (Ernst & Young 2012).
“Because and swaps—are instruments for speculation as well as hedges bonuses on Wall Street are tied to transaction volume, this creagainst a drop in an asset’s value. They can be used to bet ates an obvious problem.” that the price of an asset will go up or down. Derivatives also One fear is that losses in the trading department of a large can have more of an effect on a portfolio than simply buying bank, say, could cause a meltdown of the financial system, a or selling a stock or bond because of the leverage involved. scenario that has sometimes prompted calls for stricter regulaLast November, for instance, an investor could buy nearly $1 tion. Critics of government meddling note that these dire million in futures contracts on the Standard & Poor’s 500 In- warnings have never
This is an implausible trend on the Balance sheet that BDO should have investigated further, especially with Leslie Fay’s outstanding Income Statement. 2.) First of all I would want to investigate vendor and customer accounts to reconcile payable and receivable amounts. Also, I would obtain bank statements and other lines of credit since the long term debt to equity ratio shows the company being highly leveraged.
The international context appears to possess the information on high quality standards (Schroeder, Clark, & Cathey, 2011). The legal and institutional obstacles that are inhibit by the foreign countries. This includes private litigations against the foreign firms. Next reason is the United States will not compare to the foreign country is the politics. There are different thought processes from the foreign countries, which include the socialist, the democratic, and the totalitarian in how the cash should be spent and separated (Schroeder, Clark, & Cathey, 2011).
Why are CRAs (particularly, Moody’s Investors Service and Standard & Poor’s) so entrenched in financial markets? 3. What are the criticisms of CRAs and is it feasible for regulators to attempt to reduce the reliance of financial markets on CRAs? 4. The article refers to the various sovereign rating changes that have recently occurred.
According to Schroeder, Clark, & Cathey (2011), a contingency is a future event that could have an impact on the business. The “concern has been that disclosures under the current standard do not provide enough information to allow those who use the financial statements, such as investors to adequately assess the likelihood, timing and amount of liability related to the loss contingency” (Holme, C.). When a loss is possible, we can report the contingency financial statements—the statements do not reflect
shares). In a fundamental sense, the value of a firm’s shares should reflect investors’ expectations of the firm’s future profitability. However, data on expected future profitability is non-existent. Instead, empirical financial studies must use measures such as current income, sales, assets and debt of the firm as explanatory variables. In addition to the general question of how stock markets value firms, a second question is also receiving considerable attention by financial economists in recent years.