Abstract The Financial Accounting Standards Board released an Exposure Draft on July 14, 2005, entitled "Accounting for Uncertain Tax Positions, An Interpretation of FASB 109, Accounting for Income Taxes". This draft was released for comment before its implementation as part of the Generally Accepted Accounting Principles for entities to use in preparation of their financial reports. This paper shows that the purpose of the Exposure Draft is to resolve widespread diversity in accounting for income taxes by requiring firms to recognize in their financial statements the best estimate of the impact of a tax position. The paper shows that the ED also contains guidance for measuring the benefit that is recognized for an uncertain tax position and when that position should no longer be recognized. The paper examines comments by critics who feel that the Exposure Draft is complex, may be difficult to implement and could result in significant overstatements of firms' tax liabilities.
Paper Outline:
Abstract
Introduction
Background
Financial Reporting vs. Tax Reporting
Purpose of FASB 109, Accounting for Income Taxes
Findings
Purpose of the FASB's Exposure Draft
Discussion
Conclusion
References
From the Paper "The temporary differences between the U.S. income tax rules and the GAAP requirements for financial reporting result in some income tax expense being recorded long before it is paid creating a deferred income tax liability (Horngren, et al., p. 340). These temporary or timing differences arise because some revenue and expense items are recognized at different times for tax purposes than for financial reporting purposes. Timing differences may accumulate over more than one year and create variations between the tax basis of an asset or liability and its reported amount in financial statements. These temporary variances usually become taxable or deductible when the related asset is recovered or the related liability is settled. A deferred tax liability or asset represents the increase or decrease in taxes payable or refundable in future years as a result of temporary differences and carry forwards at the end of the current year (FASB, 1992)."
Abstract This paper considers whether the move to the Islamic banking market is viable for financial institutions. Included is an examination of the differences between Islamic banking rules and western rules, the potential size of the market, examples of successful Islamic financial institutions and the factors that contribute to the success of these institutions. Success factors including corporate culture, marketing considerations as well as financial issues are also explored to determine whether this market is a viable one for western financial institutions.
Table of Contents
Chapter One
Introduction
Background
Statement of the Problem
Definition of Terms
Purpose of the Study
Significance of the Study
Scope of the Study
Limitations of the Study
Research Questions
Overview of the Study
Chapter Two
Review of Related Literature
Western Banking Systems
The Sharia and Financial Transactions
Islamic Financial Institutions
Analysis of the Islamic Financial Market
Western Financial Institutions in the Islamic Sector
External Considerations
Chapter Three
Methodology
Research Design and Approach
Population and Sample
Calculation and Tabulation of Data
Data Analysis Procedures
Reliability and Validity of the Data
Chapter Four
Analysis of the Data
Chapter Five
Summary, Conclusions and Recommendations
Summary
Conclusions
Recommendations
Works Cited
From the Paper "This way of using the language significantly distinguishes savings and loan associations from the activities that are undertaken by the commercial banks (Lawai, 1994; Bakar, 1999; Gambling, 1978). Credit unions also have various features that distinguish them in many ways from the more standard banks and from the savings and loan associations as well (Davidson, 1998). Concerning credit unions, it has been said that "like the savings associations, credit unions have traditionally been limited by statute to involvement in noncommercial deposit and consumer lending activities. However, while the savings associations have tended to expand their activities to the point where they may rival commercial banks in the offering of certain types of products and services in certain geographic markets, credit unions have to a greater extent maintained their original role. They specialize in providing more modest financial services to member/customers delineated in relatively narrow terms" (Maududi, 1975)."
Abstract This paper briefly describes the Citibank and Enron accounting scandals, the cost of and damages caused by the scandals and the current status of the companies involved.
From the Paper "$2.65 billion. That is the amount the investment Citigroup agreed, less than a year ago, to pay to investors who had bought stock and bonds in the telecommunications giant WorldCom before its bankruptcy filing two years ago. If the adage that 'crime does not pay' is not always true, it is certainly valid when estimating the tremendous cost the WorldCom and Enron investing and accounting scandals have cost employees, investors, shareholder, and ordinary consumers. (Morgenstern, 2004)"
Abstract This paper explains that Expenditure is directly proportional to Output, which in turn is directly proportional to Income. The author points out that GDP is the market value of all the final goods and services, which are produced in the nation during a particular year, but does not include production overseas by U.S. companies, although it includes the production facilities in U.S. by overseas companies operating in the U.S. such as the Toyota Motors. The paper relates that Aggregate Output is the total quantity of output, which is produced and supplied in a particular duration; Aggregate Income is the total amount of income, which is received by all the factors of production within an economy during a given period.
Table of Content
Key Features of National Accounts
Income Method
Output method
Expenditure method
Aggregate Income and Aggregate Output
From the Paper "At this point, it is pertinent to explore briefly into the total system of national accounts and specifically at the financial linkages between the various sectors of the economy. For the purpose of building the national accounts, the economy has been subdivided into four basic sectors. These are the (a) Personal Sector - which primarily constitutes the household sector (b) Corporate sector - comprising of Companies and Financial Institutions - F.I.s and the public corporations (c) General Government sector - comprising of Central and Local Government authorities (d) Foreign sector - that comprises of all individuals, firms and government bodies outside USA. In case of each of these sectors, there is the identical set of basic accounts that keep an account of all the receipts and outflow of that sector regardless of they being factor incomes, transfers, taxes, current or capital expenditures."
Abstract Investors require a return to compensate for any uncertainty associated with cash flows associated with investment. This paper examines how, in the world of investment, all investors walk the line between greed and fear and how stocks and bonds are suitable investments for most individuals.
Outline
Advantages of Buying Different Types of Bonds
Rate of Return of the Bonds
Risk of Bonds
Interest Rates and Bonds
From the Paper "Most investors want to earn the highest possible yield and growth rate with the lowest possible risk. But maximum profit and low risk are not compatible attributes. As a bond investor, they must be aware of relationship between the risk and potential reward, or opportunity. Risk in its many forms will determine whether an investment is appropriate or not and will it earn the yield you wanted. The different kinds of bond risk are: (1) interest rate risk, (2) default risk, (3) business risk, (4) marketability risk, (5) inflation risk, and (6) event risk."
Abstract This paper explains that strategic management accounting is a balancing tool for top management that balances risk with opportunity, changes in the market place with pricing, profitability with expansion, and even diversification with withdrawal of an unsuccessful product line. The paper further explains that strategic management accounting is a tool that no modern corporation, regardless of size or its product, can do without in today's global, competitive economy.
From the Paper "During the last few years, the ideas and issues of strategic management accounting have received widespread attention in accounting literature and studies. To some, these theories have seemingly been accepted without rigorous investigation. The fact remains that the burden of management is not merely to control people, products, and the bottom line, but to make use of forecasting, turning assumptions into reality, and to utilize accounting figures into making the proper decisions. Accounting, it turns out, has become far more than a "numbers" arm of management. It has become a means of finding the right and most profitable paths to growth and a strong market position."
Abstract The writer of this paper stresses that the purpose of any cost accounting system is to provide current information about the total cost of manufacturing a product or performing a service. This paper analyzes in detail the strengths and weaknesses of traditional cost accounting (TCA) and activity base costing (ABC). TCA is a well developed method of estimating cost incurred while the ABC system is based on costs which are driven by factors other than product volume.
From the Paper "A problem may arise in the use of actual overhead costs. The problem stems from the fact that many of the elements of manufacturing are fixed costs, rather than variable costs. Fixed costs are those that tend to remain relatively constant from month to month. Examples of fixed overhead costs include the monthly salary paid to plant managers, depreciation, property taxes, and insurance on plant assets."
Abstract This paper looks at how the explosion in market gain by ViroPharma is due mostly from the huge success of the prescription antibiotic drug Vancocin, which is used to treat intestinal bacteria. It points out that ViroPharma's is most likely trading at the correct level and probably would be a good buy even at the current price. It discusses how this strength is due to the fact that the price of Vancocin can be raised somewhat considering that the alternative treatments in the brand-name drugs being produced by Pfizer and Elan cost more and because the promise of new product that they are developing for the treatment of other diseases.
From the Paper "In order to purchase the rights in the U.S. and its territories to manufacture, market, and sell the drug Vancocin from Lilly, ViroPharma had to free up the revenue required. To do this, VPHM used $53.5 million from cash reserves and gross proceeds to the amount of $62.5 million from the issuance of aggregate principal amounts of senior notes and warrants to purchase 5.0 million shares of their own common stock, with stockholder approval. Those senior notes and warrants will be exchanged for $62.5 million aggregate principal amount of 6% Senior Secured Convertible notes due on October 2009. With VPHM having to use multiple means of financing to meet the purchase requirements of acquiring Vancocin, if this drug does not continue to do well even after the Return on Investment has been realized; it is possible that the stock price may not be able to maintain its current trading level."
Abstract This paper provides an overview of the events leading up to the Enron and WorldCom accounting scandals. It examines the course of these two affairs and the subsequent results. The paper discusses the Sarbanes-Oxley Act which is considered the most significant change to federal security laws in the United States since the New Deal.
From the Paper "On August 27, 2003, the State of Oklahoma filed a 15-count indictment against Ebbers. The indictment charged that he violated the state's securities laws by defrauding investors on multiple occasions between January 2001 and March 2002. These charges were dropped, with the right to refile retained, on November 20, 2003. An agreement to extend the statute of limitations on these charges, allowing Oklahoma prosecutors time to see the results of federal sentencing, was signed on March 30, 2005. Federal authorities indicted Ebbers with security fraud and conspiracy charges on March 2, 2004. An amendment to the indictment on May 25, 2004 increased the list of charges to nine felonies: one count each of conspiracy and securities fraud, and seven counts of filing false statements with securities regulators."
Abstract Many studies on the efficient market hypothesis (EMH) and portfolio management suggest that the majority of professional investment managers cannot regularly beat a buy-and-hold strategy on a risk-adjusted basis. This paper attempts to examine the critiques on the efficient market hypothesis and the trend of the investors, financial analysts and portfolio managers to gather information to obtain excess-return. It begins with a brief description of the efficient market hypothesis and an outline of the characteristics associated with it, followed by a brief description of the new critiques against this hypothesis. It also discusses the relevant patterns that predict an excess return adjusted to the risk as well as new strategies applied by the investors.
Outline
Introduction
Efficient Market Hypothesis
Under-Reaction to New Information
Technical Trading Rules
Contrarian Strategy
Seasonality Anomaly
Predictable Patterns Based on Valuation Parameters
Book Value-Market Value Ratio
Initial Dividend Yields
Initial Price-Earnings Multiples
Predictable Patterns Based on Firm Characteristics
Insider Trading Abnormal Profit
Emerging Markets
Conclusion
From the Paper "New conditions to beat the efficient market hypothesis has supported the shift away from market performance theories, based purely on mathematical or logical bases, to psychology and economics that offer some predictable patterns. (Mills, Roger p.37)
In fact the investment analysis still play an important role in decision-making concerning the purchase and sale of ordinary shares.(Arnold and Moizer 1984 p.195) The survey conducted by Arnold and Moizer (1984) suggests that the analyst use a common general pattern to appraise the ordinary shares using fundamental analysis like primary analysis technique to indentify shares over/under-valued. The other techniques, like technical analysis and beta anlysis, have a different purpose. The former is to determine the timing of the purchase and the latter is to evaluate the performance of portfolio management.(Arnold and Moizer, p.205)"
Abstract This paper studies how a hypothetical stock broker managing a diverse stock portfolio would evaluate the risks and return on his clients' various investments. The paper provides a valuation and analysis of individual securities and a valuation of CAPM and APT models to estimate the value of securities; discusses possible problems related to the models; explores diversification and selection of a portfolio of securities; and details the risks and returns of the portfolio.
Development of a Basic Model
Some Problems
Diversification
Portfolio Selection
Risks and Returns
From the Paper "What does a reliable fund manager have to do today to ensure that his clients will obtain a realistic picture of the risks and returns of investing in his portfolio? The first part of the investment decision process involves the valuation and analysis of individual securities, which is referred to as security analysis. The valuation of securities is a time consuming and a difficult job. First of all, it is necessary to understand the characteristics of the various securities ad the factors that affect them. Secondly a valuation model is applied to these securities to estimate their price or value. Value is a function of the expected future returns on a security and the risk attached. Both of these parameters must be estimated and brought together in a model. For bonds, the valuation process is relatively easy, because the returns are known and the risk can be approximated from currently available data. Interest rates are primary factor affecting bond prices, but no one can consistently forecast changes in these rates. The valuation process is much more difficult for common stocks than for bonds because the investor must deal with the overall economy, the industry, and the individual company; both the expected return and the risk of common stocks must be estimated. The secondary major component of decision process is portfolio management. After securities have been evaluated, a portfolio should be selected. Having built a portfolio, the astute investor must consider how and when revising it. If the investor pursues an active strategy, the issue of market efficiency must be considerated; if prices reflect information quickly and fully, investors should consider how this will affect their buy and sell decisions. Even if investors follow a passive strategy, questions to be considered include taxes, transaction costs,and maintenance of the desired risk level, and so on."
Abstract This paper discusses whether or not Quaccess should move to adopt international accounting standards. It considers the role of financial statements and international implications. The author concludes that American firms should wait and see before moving toward adopting international standards.
From the Paper "Accounting is sometimes referred to as the language of business. Financial statements and accounting pronouncements are used by stakeholders in organizations-shareholders employees creditors ..."
Tags: Quaccess, accounting standards, international accounting standards, financial statements, balance sheet, income statement, IAS, IFRS, FAR, international financial reporting standards
Abstract This paper examines CVP accounting at American Airlines. The author defines HUB operations and relates it to cost analysis.
From the Paper "There are two basic classifications of accounting systems. One is financial accounting where economic transactions are measured among strict rules so that outside users can compare one company's performance with another's. The other is cost accounting which is designed to serve management. Cost accounting is the art of tracking the source of revenue sand expenses to identify the factors which influence them. This provides management with the information and control needed to maximize profits through decision making ..."
Abstract This paper reviews the oil and gas industry in the Middle East, specifically Oman. The author applies accounting for the industry.
From the Paper "The focus of this paper is financial accounting for the oil and gas industry. While accounting in the oil and gas industry generally is discussed in this paper where appropriate and feasible certain perspectives are provides added emphasis. The first of these perspective sis the Sultanate of Oman. Where conditions or characteristics of either the oil and gas industry or the application of financial accounting in that industry differs markedly between the general industry and the industry in Oman such variations are identified ..."
Tags: Accounting, Oil, &, gas, industry, Middle, East, Oman
Abstract This paper discusses the importance of organizational ethics. The author points out the difference between ethical principles and ethical rules. The paper relates the effect of moral development and auditor independence and applies the relevancy of the article to the writer's organization.
From the Paper "The Enron case was a daily staple of television news for several weeks in ... . The Enron-story both started earlier and lasted longer in the print media. Further the ethical and accounting scandal that involved Enron was a corporate disease that spread far beyond the confines of Enron. In the summer of ..., however, one only infrequently hears about Enron in media reports and even less is heard about ethical accounting practices The reasons for ... "
