Geographic Setting Of India History Essay

Geographic Setting Of India History Essay The Indian subcontinent is a large peninsula. It is surrounded on three sides by : the Arabian Sea, the Indian Ocean, and the Bay of Bengal. In the north, the Himalayan Mountain separate India from the rest of Asia. The towering Himalayas form a nearly impassable barrier that is 1,500 miles long. The rugged Hindu Kush Mountains on the Northwest also present barriers to travel. These geographic barriers allowed the first Indian civilization to develop mostly on its own. Yet India was not totally isolated. Determined invaders pushed their way through steep passes, such as the Khyber Pass in the Hindu Kush Mountains. Indian traders carried goods through the mountain passes to the Middle East and China. Furthermore, the surrounding seas served as highway for commercial and cultural contact. The vast Indian subcontinent has many diverse geographic features. The three major regions are: the Northern Plain, the Deccan Plateau, and the Coastal Plain. The three great rivers -the Indus, Ganges, and Brahmaputra flows through the Northern Plain. These broad and slow rivers flow from the snow-covered Himalayas. Together with their tributaries, they supply water for farming and for transportation across the Northern Plain. The fertile soil of the river valleys supports extensive farming. For these reasons the Northern Plain became the home of the first Indian civilization .Later ,invaders set up powerful empires in the Northern Plain. As a result ,the area has played a dominant role in Indian history. The Deccan Plateau is the triangular shaped area, south of the subcontinent. The Vindhya Mountains separate the plateau from the Northern Plain. The Deccan Plateau is bordered on the west and east by long mountain ranges called the Western and Eastern Ghats. Because it lacks the snow- fed rivers found in the north, the Deccan Plateau suffer from droughts ,which make farming difficult. Along the eastern and western coasts of India lie narrow coastal plains, which supports both agriculture and fishing .Although India has few good harbors ,many coastal people of India were seafarers who traded with people in other parts of Asia ,Africa and the Middle East. The chief feature of the Indian climate is the monsoon, a seasonal wind system from June until September , the summer monsoon blows from the Southwest. It picks up moisture over the Indian Ocean and drops torrential rains on the coast and on the Northern Plain. From October to May, the winter monsoon blows from lands to the northeast. Indias hot and dry season reaches its peak during May and are commonly felt in the Northern Plains. Ruins of Harappan Civilization Every year , the people of India wait anxiously for the summer monsoon to bring desperately needed moisture to the parched farmland. When the rain comes, temperature drops ,and crops spring to life. If the monsoon is late ,crops fail ,and food shortages result. The heavy rains can cause destructive floods especially in the lower Ganges Valley. Archeologist discovered traces of ancient civilization in the Indus River Valley . Excavations have revealed that this civilization developed about the same time as the early Egyptian and Sumerian Civilizations. The Indus Valley covered an area larger than the Old Kingdom of Egypt (1,500 km.).Two of its cities ,Harappa and Mohenjo-daro lie close to rivers and digging can cause flooding. Despite these handicaps ,archeologists have uncovered some valuable information. The Two Cities The ruins of Harappa and Mohenjo-Daro reveal that they are products of careful planning. Wide straight streets divide residential areas into square blocks. Excavated were houses ,granaries and public halls. There was a sign of a sewer system. Walled fortresses in the towns provided protection. With well-planned cities as Harappa and Mohenjo-Daro, the people might have had a knowledge in surveying and geometry. In addition to this, it could have a strong central government who could have supervised such careful planning and construction. Government and Religion Scholars assume that a priest-king headed the government, and the rulers must have a considerable power because the government exercised strict control. They must have controlled the construction of new buildings and established standards of weights and measures. Like the Egyptians and Sumerians, the people of two cities were polytheist. Statues and masks show that they worshiped a mother-goddess. They also revered sacred animals such as the bull and certain sacred trees. Think and Explain What environmental challenges did the farmers of the Indus Valley face? Economic Life Agricultural economy thrived in the Indus valley civilization. On lands surrounding the cities farmers constructed dams and levees to channel water from the rivers to crops of wheat and barley. Food surpluses supported the large population and prompted the growth of trade. A merchant class acquired wealth from trade and commerce in the cities. Merchants exported cotton cloth to places as far as Mesopotamia, gold jewelry stone carvings of animals. End of Indus Valley Civilization Indus Valley civilization began to decline many years before it finally ended about 1500 C.E. Most authorities believe that about 1500 C.E. the Aryans invaded the Indus valley. When the Indus Valley fell, the people fled to other parts of India. About 1500 C.E the civilization was almost forgotten. Like many nomadic people ,the Aryans swept into India through the passes of the Hindu Kush Mountains. Their fierce nomadic herds had come originally from the region between the Black and Caspian Seas north of the Caucasus Mountains. The newcomers already knew the use of iron and the use of horses that gave them superiority in warfare. They came in contact with the Dravidians .These Dravidians were probably the survivors of the Indus Valley civilization. Their civilization, as revealed from the remains of the town, show a static society. In time, the fusion of Aryans and the Dravidians led to the rise of a new pattern of Indian life. The Aryans introduced the caste system in India. Aside from Aryan invasion,flooding was also cited as the cause of decay of the Indus Valley civilization.Recent studies also show that complex ecological change /climate change which led to famines forced inhabitants to leave their well planned cities. Think and Respond How could natural disasters have contributed to the decline of Indus valley civilization? What ecological problems does the world face today? Ensure Ancient India Geography Indus Valley Civilization Expand http://palomeitz.googlepages.com Excel Identify the correct answer. The chief feature of Indian climate is _____________________. The first civilization in India was developed in ______________. The mountain separating India from the rest of Asia is ________. The natural phenomenon that makes farming difficult in the Deccan Plateau was ___________. Mountain separating Deccan Plateau from the Northern Plain is ________________. Prove: A country can be isolated from other parts of the world by its geographic barriers.Give example. __________________________________________________________________________ __________________________________________________________________________ Respond to Essential Question The earliest recorded civilization in India began in the near fresh water source -the Indus River. Make Connections Imagine that you are an archeologist digging in the Indus region. Write a wish list of the three items you would like to uncover to learn more about the Indus Valley civilization

Global Culture and New Culture Essay

The concept of Global Culture is defined as the idea of a â€Å"one world culture† wherein the â€Å"earth’s inhabitants will lose their cultural diversity and one culture will be experienced by all people† (Oregon State University, 2008). At present, this kind of phenomenon is one of the most controversial issues that is being discusses and debated by numerous scholars especially in its relation to the changes that is currently happening in the world. However, the idea of a global culture is not a new subject matter, as it had been perceived by previous notable personalities. This is greatly exemplified by Karl Marx and Friedrich Engel as they discussed the concept of global culture in the Communist Manifesto. The Communist Manifesto is considered as one of the world’s most influential political manuscripts in which the purposes and program of the Communist League is written. Nevertheless, this document also tackled the Communist League’s criticism of the Bourgeois In order to so, they also gave their perception of global culture and how this phenomenon affects the society. Marx and Engel began the Communist Manifesto by stating that the foundation all existing societies is the history of class struggle. They pointed out that early epochs up to the time that the manifesto was created the society is always composed of competing classes that are most appropriately described as the oppressor and the oppressed. The development and revolutions in history paved the way for two great classes that are directly facing against each other namely: the Bourgeoisie and the Proletariat. The formation of the modern Bourgeoisie is the product of a long course of development as well as the series of revolutions with regards to production and exchange (Marx and Engel, 1848). The Bourgeoisie is largely responsible in the changes of the mode of production, which give way to various modifications that greatly exemplified the idea of a global culture. The existence of the Bourgeoisie is dependent upon the continuous revolutionizing of the instruments of production and eventually the relations of productions. This includes expanding the market over the entire surface of the globe for the consumption of its products. Marx and Engel clearly explained the Bourgeoisie’s desire for globalization when they stated, â€Å"It must nestle everywhere, settle everywhere, establish connections everywhere† (Marx and Engel, 1848). In relation to the idea of market expansion, the Communist Manifesto also give due account of the concept of free trade, which is an important feature in achieving a global culture. The Communist League strongly believes that Free Trade is the main culprit in most people’s perception that personal worth is measured by the exchange of value that is most observable in the importance they give to material things. In order for the Bourgeoisie to pursue their objective of profitability by increasing production, they have to exploit other people by changing the way they think about themselves and modifying the values that they uphold (Marx and Engel, 1848). The Bourgeoisie’s exploitation of the world market is creating a cosmopolitan character to production and consumption of every country. Due to this, it is destroying the old-established national industries that are important in the national identity of a country. Industries do not merely utilized indigenous raw materials but they acquire it from the remotest parts of the world and their products are not merely consumed at their respective countries but also in every quarter of the globe. The globalization of trade also affects other factors such as communication. As such, the very way of life of the people is also influence wherein they adhere to the ideologies of the Bourgeoisie like being consumerists, which heightens the pursuance of this class’ interests (Marx and Engel, 1848). In this sense, Communists support the sentiments of the proletariat that they believed is being exploited by the Bourgeoisie. The league represents the common interests of all proletariats around the world regardless of their nationalities. They represent the proletariats in the different stages of development of the Bourgeoisie wherein there is an observable struggle of the working class. The primary aim of the Communist is similar with all other proletarian parties, which are: â€Å"the formation of the proletariat into a class, overthrow of the bourgeoisie supremacy, conquest of political power by the proletariat† (Marx and Engel, 1848). Nevertheless, the Communist Manifesto clarifies that it is not after the abolition of property in general but rather the eradication of bourgeois property. In doing so, they can be able to uphold the freedom, independence, and equality of an individual that is taken away from him or her due to exploitative wage labor (Marx and Engel, 1848). Communists clearly saw the creation of a global culture through the revolution of production that the Bourgeoisie are responsible for as the cause of most of the world’s evil. Some of the detrimental effects that it gives are the exploitation of people especially the proletariat, the destruction of old established institution like the family, and the very self-value of an individual. On the other hand, some notable scholars like Henry Jenkins and Rob Walker perceive the new culture of globalization in a different light. Their works show the effects of the technological advancement that Marx and Engels noted in the Communist Manifesto. Henry Jenkins main argument was on the concept of Media Convergence. He asserted that the perspective that merely focused on technology is shortsighted. Jenkins emphasized that the real important factor is the understanding of the way by which individuals in the contemporary culture could participate and combine numerous media sources. Comprehending the relationship among various media forms can be done in a more in depth manner if the participation of individuals will be given due consideration. In relation to this, Jenkins suggested that convergence should be seen as a cultural process that is evolving and developing rather than a mere technological end. Moreover, he also elaborated that there are different sited wherein the negotiations between consumers and producers take place. These sites are â€Å"modifying audience measurement, redirecting globalization, re-engaging citizens, renegotiating relations between producers and consumers, redesigning the digital economy, rethinking media aesthetics, regulating media content, redefining intellectual property rights, and restricting media ownership† (Jenkins, 2006). Jenkins’ was able to seriously and extensively study the effects of audience participation in media culture. He was able to highlight the influence of digital popular culture on the behavior of individuals especially in terms of their participation in the field of politics. Rob Walker is also one of the contemporary personalities that has its own perspective with the modern state of production and consumption that exists in the world today. His arguments are centered on the concept of money culture and means of technology like advertising, music, and sequential art. The focus of Walker study is in examining the consumer behavior of an individual from the lens of business and anthropology. He discussed various products and the corresponding consumer trend that is was able to create. Walker attempts to understand the reasons behind consumers’ response to a certain product, which ranges from toothpaste to alcoholic drinks up to television programs. In doing so, he tend to critical analyze the a particular product by trying to understand the underlying concept of its brand name, target consumer, and even its effect on those who patronize it. Furthermore, he also tries to establish a connection between the product and the consumer by explaining how the characteristic or attitude of a consumer is reflected in the products that he or she buys (Walker, 2008). Marx and Engels’ Communist Manifesto calls the people especially the proletariat to take action in abolishing the concept of private property of the Bourgeoisie class that tends to exploit other people and destroy the very culture of nations. On the other hand, Jenkins and Walker also give emphasis in the participation of people in the convergence of media but they pointed out that this aids in the formation of identity rather than a mere way for exploitative labor. National identities are formed because of the existence of mass media that allows its audience to create their own texts and introduce their own identities that allows other people in the globe to see and understand other cultures. The existence of mass media in terms of the concept of convergence is already regarded as a cultural process in itself that allows people to develop their identities. In this modern age, mass media is not merely a technological advancement but rather it is a tool that allows people to participate and interact in the international community. References Jenkins, H. (2006). Convergence Culture: Where Old and New Media Collide. New York: New York University Press. Marx, K. , & Engels, F. (1848). Manifesto of the Communist Party. Retrieved December 8, 2008, from http://www. marxists. org/archive/marx/works/1848/communist-manifesto/ch01. htm. Oregon University States. (2008). Definitions of Anthropological Terms. Retrieved December 8, 2008, from http://oregonstate. edu/instruct/anth370/gloss. html. Walker, R. (2008). Buyingin: The Secret Dialogue between What We Buy and Who We Are. New York: Random House.

The Benefits Of The International Reporting Standards - Free Essay Example

Sample details Pages: 19 Words: 5572 Downloads: 10 Date added: 2017/06/26 Category Statistics Essay Level High school Did you like this example? 2. 0 Literature review 2.1 Introduction Literature abounds in polarising this subject matter the benefits of the international reporting standards. Looking back at the last quarter of the 20th century it will no longer be seen as an evolutionary period global financial market in a bit to introduce a single set of standards that will be generally acceptable in financial reporting. International reporting standards have revolutionized the domestic accounting system to a more capital oriented system (Hope et al, d Archy 2001). Lantto (2007) states that the information provided by the IFRS is more reliable and relevant. Darke and Deske (2006) highlights that the disclosure quality has increased tremendously since the adoption of the IFRS. Furthermore, Ding et al (2006) states that the adoption of the IFRS has made a great impact in bridging the differences in the use of the domestic standards among the countries. In justifying the theories, there are opinions as well as oppositions on the advantages of the international r eporting standards. What becomes evident although arguably is that the movement from the domestic standard of reporting to the international standard of reporting is of great benefit to financial reporting to the shareholders, firms ,organizations and also global economy as it will place the whole countries in the same reporting field. This chapter will review this report from the historical background of the international financial reporting standards, the Implementation and enforcement then to the benefits of the adoption of this standard. Don’t waste time! Our writers will create an original "The Benefits Of The International Reporting Standards" essay for you Create order 2.2 Financial Reporting. In the beginning financial reporting can hardly be called external (Alexander, Britton and Jorissen, 2003: 22) rather it was a way by which the owners were informed on their income and capital. This is because the owners and managers of the company were not separated. Until in the 1800s when they started encountering the agency problems it becomes evident to separate ownership (management) from capital supply. Then external wreporting was introduced in order to provide information outside the borders of a specific country. Hence, financial reporting emanates from internal to external reporting. Financial reporting provides information to the users for making economic decisions (Iqbal 2002). Gilmore and Wilmot (1992) states that reporting has developed over time in a bid to stress the need for investment decision making and also to attract investors into the company. Hegarty (1997) opines that the range and varieties of this reporting regime is as a result of an evolution which s hows the uniqueness in the economic, cultural and legal jurisdiction. As a part of the revolutionary process financial reporting has changed over time (Crowther 2000). The change is a result of a need for a good financial reporting system that will communicate real value and risk to the users of the reports (Damant 2000) .Hence, the quality of a financial report is dependent on the reporting standards. 2.3 Why Standards? According to (Perks 1994,p.137),Accounting standards may be seen as the professions rules, which supplement companies Act requirements that are intended to restrict directors freedom of manovoevre and to ensure that the financial statements are presented on a more comparable, consistent and standard basis. Perks (1994) reporting standards is also important in order to prevent scandals, abuses, financial collapsing in the companies and creative accounting that may jeopardize the profession. Also, Elliot and Elliot (2008) highlight some reasons for standard this includes: Comparability: Financial statements should be able to allow users make predictions on future cash flows and also evaluate managements performance. Credibility: For financial information to disclose information that will give a true and fair view, uniformity is therefore essential. Influence: To be able to stimulate a development of the conceptual framework the process at which the standards are formulate d should be able to give a constructive appraisal of the policies proposed for the individual financial reporting. Discipline: A mandatory standard is necessary as it structures a regulation that will be systematic and ongoing thereby enforcing a disciple in the financial markets for all organizations listed in the stock exchange. The usefulness of a reporting standard cannot be overemphasized although there are some arguments on this. Harvey and Keer (1983) argued that information produced using financial standards could be unreliable at times and the standards might be bureaucratic and inflexible. Also, there may be adverse allocative effects . Consequently, there might be consensus-seeking and standard overload . Lets take an illustration of a of two companies; Enron and Ahold to further explain why we need standards. Enron is the seventh largest US based company falling into bankruptcy as a result of an overstated profit of $500 million and the Ahold the third largest U S grocer had their earnings overstated for the past two years by $500. 2.3 How National differences affects reporting. Given that the environment differ from country to country, the types of decisions to be taken and information needed in decision making differs from one country to another. Hence, accounting system is environment specific. (Iqbal 2002). Adhikari and Tondkar (1992) reported that financial accounting reporting and disclosure standards and practices do not develop in a vacuum but reflect the particular environment in which they are developed (p. 76). The culture of a country affects its method of accounting and financial reporting. For example, Gary (1988) in his books illustrated one of the ways by which cultural differences affects countries financial reporting; a country with a high uncertainty avoidance and low individualism will tend to be more conservative in their income measurement than in a country with low certainty avoidance and high individualism. Although the measures of cultural attributes may be indistinct and not direct in financial reporting compared with the other factors that affect financial reporting.Also, the nature of accounting regulations in a country is influenced by the general system of law applicable in that country. For example Jaggi and Low (2000), notes that companies in the common laws countries tends to have a high level of disclosures than countries in a codified Roman law system. La Porta et al. (1998) argues that common countries have investors with a strong legal protection than the Roman law countries do. Moreover, the differences in the types of business organization and ownership also affect financial reporting. Elliot and Elliot (2008) further explains this stating that in a country like the UK the business structure indicates a separation of the ownership and the management while in the French business the structure differentiates the ownership from the managers.. According to Nobes and Parker (1998, p.21):The difference in the providers of finance (creditors/insiders) versus (equity/ outsiders) is the key cause of i nternational differences in financial reporting. Although there is an increasing scale, companies firms had to find extra capital to finance growth. (Alexander, Britton and Jorrisen 2003). Roe (2003), further argues that political differences are the major cause of the differences in corporate structures in the developed western countries. Also the accountancy profession is another determinant of the differences in financial reporting. Nobes and Parker (2006:36) emphasizes that the strength, size, and competence of the accountancy profession in a country affect the type of financial reporting that will be obtained in that country. So with these differences the financial analyst cannot be able to make a headway there is therefore a need for a uniform reporting standards. 2.4 Why the call for international reporting standards Over the years it becomes apparent for an ever increasing worldwide competition. The globalization of the markets and companies increased as a result of the cross-border securities market listings and capital raising.. Thus, there was no cross-border investments, investors therefore prefer to invest in companies whereby there will are more comfortable with their system of accounting . 2.5 Background of the International Reporting Standards. Financial reporting standards for international applicability became prevalent in the 1970s. International Accounting Standards committee (IASC) was set up in the 1973 in order to standardize the reporting differences in international investment communities. The establishment of the International Accounting Standard committee is seen as a response to the call by the accounting profession for a greater co-ordination of accounting rules among the various nations of the world (Kraayenhof 1960).The need was expressed in the international congresses of Accountants held in September, 1972 in Sydney. Chetkovich (1979, p.13) emphasizes that at each of these congresses, there was a demand for a better communications and closer cooperation among accountants on a worldwide basis; and also for greater harmonization of accounting standards. This statement led to the establishment of the IASC on June 29, 1973. The objectives of IASC are: to formulate and publish in the public interest, international standards; also to promote their acceptance and observance world-wide, and to work generally for the improvement and harmonisation of regulations, accounting standards and procedures relating to the presentation of financial statements. (IASC, 1983, Preface to Statements of International Accounting Standards, p.1). This is the first step towards the achievement of a globally recognised standard .The members of the IASC accept that adopting of international accounting standards (IAS) will improve the quality of financial statements (IASC ,1995). How far did this go or were there criticisms to this standard? IASC helped in solving the problem of uniformity although the purpose of it enactment was far from being realised. One of the weaknesses is that the standard issued by IASC has many objectives thereby making it difficult to achieve the purpose of consistency in recognition, measurement and presentation of transactions (IASB section 4). The standard is also too broad and allowed the use of several alternative accounting treatments. Atiken and Wise (1984) emphasizes that the IASC gives more attention to the multinational companies and investors in the multinational businesses more than it emphasizes on the harmonization of all spheres of the organization globally. Therefore emphasizing that I ASC was set up for the harmonization of accounting on a worldwide basis in order to improve the financial reporting and decision-making capability of multinational businesses, and investors in multinational businesses.(p.176). The second criticism to the use of IASC is that of the mandate. The statement starts with the phrase to formulate and publish in the public interest international standards†¦. (IASC). Hence they act in the interest of the public by a way of enforcing the rules which may not be favourable to the public. This absence of democratic legitimacy has been the major reason by which the IASC standards have not been enforced. Besides , this the structure and the membership composition of the IASC lacked the requirements needed for a global standard setting organization which includes the independence of its members, technical expertise and the decision making bodies representatives. McKinnon and Janelle (1983, p.33) argued that IASC has only succeeded in codifyi ng generally accepted practice, in serving as a neutral source of standards ,and in influencing groups with the enforcement powers. Consequently, the IASC was restructured from the year 1998 to 2000 to International Accounting Standards Board (IASB). IASB is an independent London-based standard accounting body privately funded. The first IFRS was issued in the year 2003 with a membership of 19 countries but it has tremendously grown to 70 countries now with the EU mandating that all listed companies should use the IFRS in their financial reporting effective from the year 2005 (EC,2002). IASB has two member bodies the standard setting board and the member board of trustees .The IASB establishment is allied to that of the international federation of Accountants worldwide (IFAC).. The International Accounting Standards Board is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable informatio n in general purpose financial statements in addition, the IASB co-operates with the national accounting standard-setters to achieve convergence in accounting standards around the world. (IASB, 2002, p.1). IASB has taken corrective measures in removing the accounting alternatives thereby ensuring that firms give a report that will reflect a true position and economic performance of the firm. IASB also aims at promoting global consistency in application and enforcement. It has also met the requirement that the business which operates in multiple bodies have a uniform financial statement which will be understandable in the countries whereby they operate. 2.6 International Accounting Standard Board (IASB) versus FASB? Norwalk agreement in the year 2002 by the Financial accounting Standard Board (FASB) and the International Accounting Standards Board was signed by both bodies after the need for a high quality, consistent and a comparable information which will be applicable to both domestic and the cross border financial reporting was recognized. Jacob and Madu (2009, p.3) the cited that both FASB and the IASB has pledged to use their best efforts in making their existing financial reporting standards fully compatible as is practicable and to coordinate their future work programmes to ensure that once achieved compatibility is maintained. This was also confirmed in their meeting in October 2005 of the two bodies reaffirming their commitments to converge US GAAP to IFRS. In a Concept Release, the SEC(2000) notes, Establishing and maintaining high quality accounting standards are critical to the US approach to regulation of capital markets, which depends on providing high quality information to facilitate informed investment decisions. (Jacob and Madu 2009).SEC released a proposal on July 13 2007, which states that US should recognize financial statements prepared using the IFRS from the foreign private issuers without reconciling them back to GAAP [2].furthermore, SEC informs all the investors that IFRS is the only set of standards with a high quality accounting standards that is more informative, useful for preparing financial reports compared with the US GAAP. This recent move to IFRS suggest that ,IFRS is the only standard that is of high quality and globally recognized and also has a potential to improve comparability of the financial statements despite of the country whereby they are domiciled. Despite all these efforts to converge to IFRS some academic literature still opines this stating that there are still material differences between the IFRS and the US GAAP. More so, the information contained in reconciliation is evident in the investment decisions made by the US investors. for example ,Culter and Neidemeyer (2009) argues that the major challenge why US did not want to adopt the IFRS is that there are differences in regulation and the manner at which these rules are been interpreted. IFRS is principal based regulatory system; which means that the rules are already set. On the other hand US GAAP is ruled based, whereby a detailed guidelines and principles is already laid out. Delliot (2007) emphasized that the principle based rules focuses more on the objective not relying more on the detailed rules. Deming (2005,p.4) gives a conclusive report pointing out that IFRS has more of a common law approach, than the US GAAP which is more of a civil law approach Furthermore, in the number of standards, IFRS has forty nine standards while and nineteen interpretations and this consist of an approximate of two hundred pages (Delliot 2009) while the US GAAP has twenty thousand page (Mitra 2009).Other notable differences are seen in the financial repor ting using the US GAAP and the IFRS. This will be comprehensively reviewed in the subsequent chapter. 2.7 Implementation and Enforcement of Financial Reporting Standards The credibility of a standard relies on its smooth implementation by countries that adopts it. Enforcement is a difficult concept to quantify and measure (Nobes and Parker 2006). The enforcement process differs from one country to another. Even at the international level there is still no genuine enforcement process. Moreover, some accounting bodies set standards and leaves enforcement to other bodies while others do both. For example US Securities and Exchange Commission sets laws and enforces it while IASC, Accounting Standards board (ASB) sets and develops standards and do not have the power to enforce these standards For the set rule of IFRS to be achieved an enforcement body has to be set up with powers to enforce the standards (Lamfalussy, 2001; Committee of European Securities Regulators [CESR], 2003a). Nobes and Parker (2008) states that the most determining factor for a successful adoption of this standard as a global standard is in the approach taken by the financial r egulating bodies in the countries that adopts it. Giner and Rees (2005), Brown and Tarca (2005 )and Ball(2006 ) affirms that the purpose of IFRS is to provide a high quality financial reporting which can only be achieved with vigorous enforcement by the regulatory bodies (Schipper 2005 and Ball et al. 2003.The enforcement has not been easy certain factor has affected the effective enforcement of the law. Some of them vary from the cost, regulators interest and whether the businesses or accountants really need them. Watts and Zimmerman (1986), opines that the value of regulation is an empirical question, more apprehensive of how the regulatory authorities can value the costs and benefits of regulation. For example in the EU countries the structure and the organization that is in charge of the oversight of the requirements in the financial reporting varies among the EU countries. Also some countries do not have institutional oversight of financial reporting (FEE, 2001a, p.10).The EU r egulation therefore mandates that the member states are to take appropriate measures in order to ensure compliance with IFRS. (European Commission EC], 2002, n.16). As a result of this the need for a country to produce a multiple financial statements was eliminated. Lafferty (1981) noted that no enforcement mechanism ever existed in reality. Perks (1993), expressed in his opinion that, without a legal backing it is not easy for the reporting standards to be enforced. Enforcing of the accounting standards therefore may require statutory audit, an effective sanctions and monitoring by supervisory bodies and for it to be implemented. Thus, there will be continuous reformations and changes in these standards. IFRS AND EU The European Parliamentary on enacted a legislation 0n 14 March 2002 requiring all companies listed in the European stock exchange to publish their financial statements with in accordance with the International financial reporting standards. There is also an endorsement mechanism which ensures that IFRS meets the needs of the EU listed countries. 2.4 International Standardization, Harmonization and Uniformity. The move towards greater harmonization of professional accounting practices has been traced back 1904 and the first accounting congress in St Louis, Missouri (Samuels and Piper, 1985, p.59, Mueller, 1979, p.7). Samuels and Piper (1985 p.59) states that international issues were not important while Mueller (1979 p.7) states that there is a need to pay attention to International harmonization. Combarros (2000), also argues that there is a need for harmonization of the accounting. Harmonization and standardization are used synonymously by some authors (Tay and Parker, 1990). While other researchers has differentiated the two. Tay and Parker (1990, p.73) defined harmonization as a movement away from total diversity of practice and standardisation is seen as a process which involves a movement towards uniformity. Saudagaran (2001:32), futher emphasized that the rationale for harmonization is that it will enhance comparability of financial statements [therefore] making it easier to use a cross countries While other proponents is of the school of thought that harmonization will is not be practicable or truly probable. Rudhede and Wahlberg (2003) emphasizes that the lack of accounting harmonization will give difficulties to the investors in understanding the accounting principles which varies among the countries. Walton. Moreover, harmonization is a way to put processes in place to be able to reduce the obstacles inherent in international comparability. Hulle (1993, p.73) stated that the objective of harmonization is the comparability of accounts. All the efforts of the EU towards harmonization of these accounting standards have been challenging and slow. 2.4.2 Merits of international harmonization. An argument in favour of international harmonization is, efficiency in trans-border transactions. (Walton, Haller, Raffournier, 1998, p.9). Although lack of uniformity in the reporting procedures and the comparability of the accounting information is another barrier to cross border investments. This comparability of the financial postions across national bodies is seen as one of the most important reason for harmonization (Cummins 1975). This will help to reduce lack of trust and non reliance on the financial statements. With this there will be a flow of international investment in the capital market. Turner (1983 p.58) in his studies affirms that the second advantage of harmonization is to consolidate divergent information when more than one set of report is required to comply with different national laws or practices; further stating that accounting diversity is the major cause why companies spend unnecessarily cost. According to Houston and Reinstein (2001), harmonization of the accounting standards will reduce the cost of business, more particularly across national borders, than it will contribute towards greater efficiency of the market regulations. Not only will that harmonization reduce the costs inherent in conducting financial statements analysis and investments in international context. Another advantage of international harmonization of the accounting standards is saving of resources (Muller 1961, Spacek 1971). Further arguments is that international harmonization of the accounting standards can advance capital market efficiency(Ramanna and Sletten 2009) while Ball et al., 2000; Ball Et al 2006 envisaged that if the international market does not go along with the associated capital market institutions can be expensive. Finally, harmonization of the international accounting standards will help in improving management decisions in the multinationals. (Hauworth 1973). 2.4.3 Demerits of international harmonization International harmonization if faced with some criticisms, Some of which are economic while others are political. One of the criticisms is that it cannot carter for a wide range of national circumstances, legal systems, stages of economic development, and cultural differences (Samuel and Piper, 1985, pp 100-109). Atiken and Islam refuted this stating that the nature of the economic transactions and the methods by which they are accounted for does not vary in essence. Walton, Haller, Raffournier, (1998) argued that harmonization distorts social balances that have not been tackled over a long period of time. In the readings of Blake and Hossain (1996) International harmonization of reporting standards especially IASC is less respectful of local particularities; in regards to this context options will be seen as to be bad ,methods are termed either good or bad and costly reconciliations is likely to be imposed. Kenny and Larson (1993) further argued that large professional organizatio ns protect their selfish interest in the standard setting process. Also the absence of a strong professional accounting body is a major obstacle to harmonization of accounting standards. 2.10 Arguments for international reporting. The essence of international reporting standards is to give a universal reporting standard that will be comprehensive and transparent thereby improving investors confidence as well as also creating market integrity. (Hope et al., 2005; dArcy, 2001). In this section we looked at the benefits of international reporting standards to the investors, firms, and also to the global economy. Gordon (2008, p. 3) cited the speech of Levitt (1997) which stating that for international reporting standards to gain acceptance three key objectives must be in place: The standards should include a core set of accounting pronouncements that constitute a comprehensive, generally accepted basis of accounting. The standards must be of high quality – they must result in comparability and transparency and they must provide for full disclosure. The standards must be rigorously interpreted and applied. Financial Reporting quality and transparency under IFRS The question has been if the accounting figures reported under this standard will give of high quality compared to those under domestic standards?. Also will IFRS show transparency in disclosure for an informed decision for investment? Barth et al., (2007) states that this is an extremely intricate question to answer as the application of any given standard has exhibited the effects of the features of the financial reporting system, its standards, as well their interpretation, enforcement and litigation. As these affects the competence of the financial prepares and users. Tarca (2004) said that international accounting standards are one way of improving transparency in financial reporting. Ashbaugh and Pincus (2001) elaborate that since the adoption of IFRS there has been improvement in the forecast accuracy by the analyst. As a result of this analysts cost of information acquisition also reduces. Cuijpers and Buijink (2005) from his sample of firms domiciled in the European Union provide evidence that the analyst following has increased. Also Barth et al (2003) and Barth et al (2007) reveal that higher value relevance for firms is higher since the adoption of the IFRS as compared with the pre adoption period. IFRS therefore reduces the estimation of risk in market returns. Hence we will say that the quality of the IFRS in financial reporting is therefore inestimable in countries that adopt IFRS than those that use the locally recognised standards. Although we have affirmed that IFRS is associated with a high accounting quality there may be oppositions to this. Firstly, where there is an intrinsic flexibility in the principles based standards; this may present opportunities for firms to manage their earning thereby reducing the accounting quality. Also, in a bit to limit the managerial discretion which relates to the accounting alternatives will also reduce the ability of the firm to report accounting measurements that will give a reflection of what the true position and economic performance of the company is. Thus, accounting regime affects the quality of the information thereby affecting the cost of capital. Cost of capital and IFRS Adoption There are various propositions on the whether the adoption of IFRS reduces liquidity and lower cost of capital. Before the adoption of IFRS investors have to spend some time and effort in translating the standards in a way they can to understand. This process wastes efforts time and incurs transaction cost. The cost of capital determines how risky an investment would be. The higher the cost of capital the more risky the investment will be. According to (Coffee 2002), findings on bonding theory there is a lowered cost of capital. Deske (2006) affirms that this associated reduction in information cost is the main benefits by which IFRS is being adopted. There will be a reduced cost since the same standard will be used by all countries not regarding where the countries are domiciled. Aras and Crowther (2008) argued that the reduction in the cost of information in the adoption of IFRS and an assured consequent reduction can only benefit the countries whose legal, cultural, and economic system is the same with the nations which are involved in setting IFRS, hence other countries which are not beneficial to this may incur increased cost compliance. Although, Barth (2007); Marquez-Ramos (2008) emphasized that IFRS reduces information cost of an economy as capital flows and trade becomes globalised. Improved comparability of the accounting reports: The use of IFRS eliminates the lack of comparability of financial statements. Choi et al. 1999, p. 249 states that comparability eliminate the current misunderstandings of the investors on the reliability of foreign financial statements and this removes one of the most main impediments affecting the flow of international investment. It also makes it easier for companies to compare financial results of different reporting entities from different countries. Global recognition Globalization of the business activities has increased creating a need for comparability of financial information between firms of different countries .Most of the companies are going globalized therefore the use of national accounting rules is increasingly impairing effective communication both in internal and external reporting. In a recent study by the international federation of Accountants(IFAC) most accounting leaders all over the world has agreed that adopting IFRS will be vital for economic growth in their countries. It is also significant as it will make it easier to compare human capital needs of companys subsidiaries all over the world since professionals will be more mobile. IFRS improves profit figures: The movement from the domestically recognized standards to the internationally recognized standards has resulted to a tremendous increase in the net profit figures of top most countries financial reports although the balance sheets have deteriorated. It is noted already that IFRS requires a comprehensive reporting than the domestic standards. IFRS has determined the various accounting methods by which profit figures will be derived from and reported by the firms (Aras and Crowther 2008). Impact of IFRS on financial reporting Examining financial statement implications is important because, †¦ the only direct effects †¦ are changed financial statements †¦ (Hung and Subramanyan, 2004, p.4) Pijper (2009), further examines how IFRS has affected the reporting of financing on the balance sheet. In GAAP the put option were disclosed in a footnote as an off balance sheet figure, but with the IFRS the put options which is held by minorities are now treated as a financial liabilities. Prior to the adoption of IFRS most companies were very conservative in their depreciation rates and this was affecting the business profits in that some assets will still be in use and there is no report on the expense incurred against those assets in the income statements but now the IFRS has reduced the distortions b these excessive prudent nature of depreciation rates .From the studies of (Hung and Subramanyan 2004) IFRS emphasized that fair value should be used for balance sheet valuation. Barth et al (2005) from his studies discovered that companies that uses IFRS experiences volatility in their net income. Furthermore in (p.5) of his report he gave a conclusive report on companies that use IFRs and companies that doesnt use IFRS saying that companies that use IFRS evidence less earnings management ,more timely loss recognition and more value relevance [in] accounting methods. IMPACT OF IFRS TO INVESTORS Ball (2006) states that IFRS gives a more accurate, comprehensive and timely financial statement information compare to the previous standards. Secondly it also gives a more informed valuation in the equity market thereby lowering the investors risk. Also it reduces the adjustments analyst made in order to make their financial statements comparable globally. As a result of this reduced cost market efficiency is achieved. Furthermore, (Ball 2006,p.17) highlighted that reducing international differences in accounting standards assists to some degree in removing barriers to cross-border acquisitions and divestitures, which in theory will reward investors with increased takeover premiums. It therefore provides better financial information for shareholders: Impact of IFRS on Firms: The impact of IFRS on the firms varies from one firm to another and also from one country to another.IT can be explained using the signalling theory (Spence 1973).When the signalling theory is applied to the financial disclosure it sends a signal that the managers may use it to signal their intentions and expectations to the market participants.(Hunts 1985).Also Tarca(2004:8) further states that Firms could use international standards to send a signal to capital market. Therefore the application of international standards by the companies could depict two things to the investors either that the firm is trying to disclose more information or adopt a more restrictive accounting standard. We should also note that communication to the investors is the main reason for international financial reporting. 2.12 Arguments against international reporting standards. Firstly, It is stated that IFRS can be influenced by political lobbying but the recent position of the EU in IFRS standard setting overrides this argument. Also, Brackney and Witmer (2005) refuted this by saying that for a country to get a dominant role in the IASB affair they are likely to concede some authorities over setting standards to EU interest. Ramanna and Sletten (2009, p.2), envisaged that IFRS is a product with a network of effects this means that the IFRS will be adopted by a country if other countries are using it. IFRS can also only be adopted because of its direct benefits (autarky value and the synchronization Value) (Katz and Shepiro ,!985;Liebowitz and Margolis 1994).This direct benefits are represented by the net economic and net political value of the IFRS over local standards. Autarky value is the direct value a country benefits from adopting IFRS while synchronization is a value that a country gets from adopting a single set of accounting standards which is w idely acceptable and acceptable by the other countries. (Ramanna and Sletten 2009). Pijper (2009) further states that compared with the local GAAP profits were overstated when restated under the IFRS he also analysed some of the weaknesses that is inherent in using the IFRS. These include the following: The cash flows statements cannot be compared directly: In preparation of a cash flow statement interest received, and paid, dividends received and income tax paid has different treatments by different companies. There is also no consistency in disclosing operating and investing activities. It may be difficult to implement the accounting principles in practise: In a study carried out it was observed that in French countries, IAS 27 does not recognize the defacto control so a company that is consolidated under the French GAAP may not be accounted for in this manner. IFRS still allowed the use of alternative accounting treatments: In accounting for jointly controlled en tities ,IFRS allows countries to choose between proportionate consolidation and the one –line equity method. The method by which derivatives is treated using IFRS makes the financial statement difficult to understand: In IFRS debt is reported differently from the related currency swaps at times it includes the fair value of interest rate swaps as carrying amount ,this makes it difficult to ascertain the true level of debt and derivatives in the financial statement. Also there will be difficulty in tracing the cost of a companys borrowing if interest payable to the debt holders is paid through the derivatives. The derivative may also bring in false volatility in the income statement if hedge derivatives is not properly accounted the same way by which the derivatives itself is accounted for. Further propositions in the use of the International financial reporting standards (IFRS) is that it is a fair value based standards (Walton 2007 p.9) this infers that all assets and liabilities will be measured at fair value with any resultant changes to be included in the income and statement as gains and losses .Consequently, there are further oppositions is that the use of fair value in subsequent measurements of assets and liabilities is limited both in theory and practice.(Carnis 2006)

Essay on Henry David Thoreaus Integrity - 604 Words

Henry David Thoreaus Integrity Although his actions were admirable and act as evidence to integrity, the writings of Henry David Thoreau and Emerson reveal a haughty and pretentious individual. Thoreaus courage was noble. He was quick to immerse himself in his beliefs and abandon any obligation to social norms despite the risk in damaging his reputation. His rejection of societal limitations and steadfast individualism was truly commendable, however, his mannerisms were extremely rude. He cast aside all tact and consideration of others because he was so consumed with himself. â€Å"He coldly and fully stated his opinion without affecting to believe that it was the opinion of the company. It was of no consequence, if every one present†¦show more content†¦This can be deduced as being pompous and stubborn or generous and independent. He was self sufficient but this strength can be somewhat aggravating. Thoreau felt so superior to his peers that he denied any aid in order to maintain his aloof character. Th at way, he never owed his accomplishments to anybody. There was nobody to be thankful for. â€Å"He seldom thanked colleges for their service to him, holding them in small esteem, whilst yet his debt to them was important.† (p. 1235) Every success was attributed to solely his own achievements and never that of another institution. In that same realm, Thoreau keeps a distance with the reader and speaks with a holier than thou air. He is consumed with his experiences and idolizes himself because he allows no respect for the rest of society. He treats himself as royalty in that no other individual could compare to his triumphs. Actually, the laboring man has not leisure for a true integrity day by day; he cannot afford to sustain the manliest relations to men; his labor would be depreciated in the market. He has no time to be any thing but a machine. 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