However, what amount of self-interest can be classified as greed remains an ambiguous question and forms the main criticism to Wang et al. (2011). Supporting this view is Cameron (2003) who states that economic literature strongly appreciates self-interest and discussion on greed is far less. Some authors (Werhane, 1991) even agree that Adam Smith would view greed as antithetical to a well-run economic system. However the motivation to study the topic of greed in economists and economics education is evident and this topic has been widely written upon.
For Merrill lynch change is nature of work, where customer retention and loyalty will be given importance and also resulting in less market errors due to decrease in number of clients and focusing on profitable clients. Risk involved: Some traditional metrics may not align with the supernova Result in less focus on acquisition “golf problem “ 4. Paint a picture of a Financial Advisor’s day using the Supernova process. How is this different from typical day under the old process? Financial advisor using the supernova process: Organization and process driven Focus on ideal customer
Hill Country practices the conservative capital structure, which has excessive liquidity and lower interest rates that will bring negative impacts on the company’s financial performance measures. So, it is a good opportunity for Hill Country to implement a more aggressive capital structure. For example, the Chief Executive Officer (CEO) of this company can increase the leverage ratio by either increase the debt or reduce the equity or both. At first, debt financing usually used when a firm raises money for capital expenditures by issuing debt instruments to individual or institutional investors. In return for lending the money, the firm need to pay the principal plus interest payment at some agreed time in the future.
Throughout the case, it can be seen how Cendant Corporation was performing activities that dealt with the interactions of income smoothing. The main cause of performing with Income Smoothing was to make their shareholders and investors believe that they had a professional and ethical operation running. Income smoothing can best be represented as how either gains or losses from a certain period are taken into a good or bad period with losses or no profits. Income smoothing throughout this case was used as an unethical practice performed by Cendant Corporation to achieve financial stability and falsify numbers to make the investors believe they had premium stocks when in reality it wasn’t what was really occurring which would then lead to the
Question 1. What is the purpose and intended contribution of the paper? Ray Ball and Phillip Brown conducted a research in accounting to identify the usefulness of accounting numbers and the impact that they had on share prices. Before the research was done, the accounting profession was unaware of the impact that income statements and balance sheet figures, which were reported to the public had on the share prices. Also the accounting research was based solely on a few assertions and developed arguments.
Week 8 June 1 – Accounting Statements and Cash Flow The topic that I have learnt today is on accounting statements and cash flow. The statement of cash flows contains the operating, investing and financing which are primary in business activity. Inflow is when the money are received and not necessarily earned. Whereas, outflow is when the cash is paid and not necessarily incurred. The information you get from the cash flow statement can help evaluate the company’s ability to meet its obligations.
I investigate institutions’ effects through some country’s specific factors, such as legal origin, corruption perception index (CPI), International Financial Reporting Standards (IFRS), Transparency, Financial structure and Societal Trust. I conduct this experiment based on La Porta et al. (2008) revelation to evaluate these institutional factors on the SCDS spreads, but not to compare the explanatory power of global and local factors on SDCS spreads. The results provide the following evidence: in average common law origin and less corrupted countries have their CDSC spread lower by at least 26.2 % compared to civil law origin and highly corrupted countries; SCDS spreads is lower for countries that present their financial statement with more transparency; financial structure of OECD country members and highly trusted countries negatively react with the SCDS spreads. I further check the robustness of those findings by using 10-year SCDS spreads, and the main results still remain and fully significant.
(2008). Do accounting standards matter? An exploratory analysis of earnings management before and after IFRS adoption. Journal of accounting and public policy, 27(6), 480-494. The research paper mainly analyzed the effects associated with the mandatory application of the IFRS standards on the both the management and quality of the earnings.
According to Penman (2007, p. 36) in the fair value accounting method the primary vehicle for conveying information to shareholders is the balance sheet. It satisfies the valuation objective and the income statement provides information about risk exposure and management performance. In the historical cost method the income statement is the primary vehicle for conveying information about value to shareholders. This method does not report the present value from the balance sheet, it rather reports the progress that has been made by recording the value added
The primary function of AIS is assigned the qualitative value of economic events. It is a computerized accounting of produce the financial statement named as Income Statement. Cash Flow Statement and Balance sheet. Accounting Information System can ensure the reliability of financial information processing and control and measures the economic information reliability. Managers Need AIS means to decide internal controls.
Accounting policy efficiency and reliability Target Corporation’s accounting policy is both efficient and reliable. However, in relation to the ratios discussed earlier, the use of estimates accounting policy is one that may require additional attention. This policy requires management to make estimates and assumptions affecting reporting amounts in the consolidated financial statements which can link to the payout ratio, the return on assets ratio (ROA), and also the earnings per share ratio (EPS). By comparing the estimates, management makes in comparison to the actual numbers presented in the statement, it would support us to make reflections on numbers that look unusual. All three ratios connect to the assertion accuracy since their amount