Religion Essay Example | Topics and Well Written Essays - 1000 words - 7

Religion - Essay Example Past societal experiences are believed to have a great impact on various religions. The readings also share a common idea that their pioneers and the societal culture have influenced different religions’. The readings explain that there are some things that are shared amongst different religions such as negative things that should be avoided by the followers. The readings also show that every religion has their devotees who strongly believe in the doctrine and overall teachings of that religion. However, there are common ideas shared amongst religions including the concern about life and death and the reverencing of God. The readings further admit that issues to do with religions are very tough to handle and may be a bit confusing. Religion plays a significant role when it comes to peaceful coexistence because most of the conflicts and world struggle originate from 9/11. Christianity tends to remain as the dominant religion in both readings. The readings tend to look at the aspect of religion in different styles by giving it a unique approach. They offer an understanding of the religion in various perspectives by relying on different sources and prior knowledge. The readings also reveal various things that guide different religious beliefs. The second Vatican Council defines religion as a group of people gathered for a common goal of getting answers to the unresolved human riddles and shares a common destiny, God. The council believes that acquiring answers to the unresolved life puzzles such as what happens when one is dead can only be answered by religion. Religions are the path through which the world attempts to overcome the restlessness of peoples’ hearts by outlining a program of life covering doctrine and sacred rites with high regard for the manner of life and conduct. Prothero highlights eight rival religions that rule the world and believes that religion

The Human Being and Living The Good Life Essay Example for Free

The Human Being and Living The Good Life Essay This paper contains the different definitions of what it means to be a human being and living a good life. In this paper we will take a look at Hobbes and Augustine’s definition of the human being and the good life. Both of these philosophers give examples of what they think the good life is, and the desires of human nature. In this paper I will talk about Augustine and his thought of how in order to live a good life, one needs to seek God to find true happiness. I will also talk about what being a human being and living the good life means to Hobbes, and his thought of how human equality is the ticket to happiness and the good life. I think Augustine offers a more accurate description of the human being and the good life because I agree that true happiness can’t be found in earthly things. I believe there is much more to life than finding happiness and self-worth in success, money, fame, popularity, and etc. Life chasing after materialistic items won’t bring you happiness because you will always feel like there is something more you want and desire, the materialistic items won’t satisfy you. Augustine’s definition of the human nature is one that is a God-seeker. Augustine agrees with Plato that the human nature has a mind to think and choose. He also believes that human beings have the free will to choose between good and evil. He believes that the human beings search for ultimate fulfillment and happiness. He believes that the good life is a life following God. Augustine believes that the only way to find eternal happiness and live a fulfilled life is following God because human beings are born as natural sinners; only when we find God, the emptiness in our heart is filled with eternal love and happiness. His definition of the good life is not one free of suffering, troubles, or sorrow, but one with faith in God. He believes that the grace of God is what will make u s happy and a relationship with God is true happiness. He believes that when we seek materialistic existence it ultimately leads to despair. He believes that a person that chases materialistic items is one who is selfish, because that person is always thinking about what the world/ another person can do for me; A godly person is one who appreciates the world for who it is and  another person for who he/she is. A godly person finds the life fulfilled. He believes that because human beings are all sinners, chasing after materialistic items will only lead to more sin and addiction, it won’t give us the ultimate satisfaction and fulfillment. Augustine shares his personal experience with us about how he chased after materialistic items and stole for fun, but it was never enough to fulfill him. He talks about his lust and search for love, but he didn’t find true love, fulfillment, or happiness until he found God. Human beings are the same, they chase after fame, money, popularity, success, and material items, but they will always feel the void, emptiness, and unfulfilled. Materialistic happiness is only temporary. Ultimate fulfillment and happiness requires spiritual existence and not tangible existence. Hobbes believes that the definition of human nature is a person who desires happiness. Hobbes believes that happiness is relative to the individual. There is no universal happiness. Hobbes believes that human beings are self-centered, self- preservative, and desire power. Hobbes believed that the state of nature would lead to the state of war because there are no laws in the state of nature, human beings have absolute freedom and the absolute freedom will lead to a constant state of fear. Hobbes believes that human beings are self-centered and self-preservative because they think about themselves before thinking about others. Hobbes believes that the basic components of human nature are competitiveness, diffidence, and glory. We do whatever we can to defend what we have, which makes us diffident. We all seek to have the repetition that others admire, which makes us seeking of glory. Hobbes believes that human equality is the good life. He believes that humans are equal in terms of body and mind. We are equal in body because we all have the ability and strength to kill each other. We are equal in mind because of prudent and practical intelligence (knowledge gained through experience). We all share the ability to learn from experience. That is why for Hobbes, everyone deserves the same rights and all rights. He believes that the only way to reach happiness and the good life is equality because human beings are naturally competitive. If everyone and everything is equal, then the competition will not be there because everyone is getting all the same things and same rights and there is nothing to fight over, so there will be peace. I think Augustine gives a better description of the human being because I agree that chasing after materialistic items can’t fill the empty void that is felt in the heart, only the love and mercy of God can fill that empty void. I believe that God created us and we won’t feel that everlasting love or happiness until we find God again, and I believe that only He can fill that empty void in our hearts. The materialistic items can bring temporary happiness and joy but that happiness and joy will eventually go away, and you feel that emptiness again. I agree that all human beings are born as sinners and we go after materialistic items like money, fame, popularity, success, love, and etc., and even when we do have all those materialistic items, we always want more. Human beings are selfish and enough never seems to exist in our vocabulary. I can speak from my personal experience because I desire for money, success, love, fame, and popularity as well. Even though I have a part-time job and I’m making enough money for me to spend on food, daily necessities, clothes, entertainment, and enjoyment, it still doesn’t seem enough. I always want to make more money, because to me there is no such thing as too much money. I desire for success because being successful means you can make lots of money and get lots of fame and popularity. I like to feel loved, whether it is by friends, family, or a significant other. Like Augustine, I realized that all these materialistic items brings me temporary joy, happiness, and fulfillment but it doesn’t last because it still doesn’t feel like it’s enough to make me feel satisfied. It wasn’t until one of my friends starting bringing me to church, and I learned about God and the love and mercy He has shown us and given us; it was then that I realized that I need God in my life. After finding God and accepting Him, I felt the emptiness in my heart that I tried to fill with materialistic items and temporary happiness, was finally filled with eternal happiness and fulfillment. I knew that the good life and living a life following God didn’t mean that I wouldn’t be facing trouble or that life was going to be easy, that I wasn’t going to face trials, temptations, or sufferings, but I knew that a life following God meant happiness and faith and trust that God will be there for me no matter what. Having that faith in Him made me fill fulfilled. I also began looking at things differently, instead of thinking about myself and the things I can get from money, fame, popularity, or success, I began thinking about how I can give to others and society with  the success or money or fame I have or will have. I began to think of the things I can do for others or for society, instead of what others or the society can do for me. I became more selfless i nstead of being selfish. Even though my life isn’t perfect and I still face sufferings and trails daily, I feel fulfilled because I have God in my life; and I wasn’t able to feel this way or find this happiness when chasing after the materialistic goods. That is why I believe Augustine’s definition is an accurate one. We can spend our entire life searching for happiness and we can have all the money in the world, or all the fame and popularity in the world, and we can feel loved by our significant others and family members and friends, but we will still feel unhappy, empty, lonely, or something is missing. God alone can fill that emptiness and loneliness, no one or nothing else can fill it. That is why I believe that even though following God may not be perfect and easy, that everlasting happiness and eternal love is worth it. Hobbes is right that the human beings desire happiness and is selfish and competitive and want popularity. However, I disagree that there is no universal happiness. There is universal happiness for whoever finds God. I believe that because we were all born as sinners, accepting God as our savior and knowing that He loves us even after all the sin we commit, we’ve committed, and we will commit, will makes us feel loved and accepted by our Heavenly Father. That is the fulfillment we need. We can find everlasting love and eternal happiness in our Heavenly Father. That is why I believe that in order to have a good life, one has to seek God and live for and through Him.

Glaxosmithkline Business Strategy

Glaxosmithkline Business Strategy However, further in this study we will get to know the core elements of GSK, its key drivers of change, factors for it success, main business strategies and the extent at which it has been able to align these with its resources and capabilities. 2. KEY DRIVERS FOR CHANGE AND CRITICAL SUCCESS FACTORS 2.1 core elements Over the years the pharmaceutical industry has played an important role alongside other economy sectors  [1]  in contributing to the UK economy. As the economy gets older the more grounded the industry becomes, by acquiring strategies of merging and acquisition to expand and form the main companies/competitors of the industry like Pfizer, GSK, Sanofi-Aventis, Novartis, Roche etc. The pharmaceutical industry is the leading sector in the UK, investing about  £10 million daily on R D  [2]  (Euromonitor 2004),employing around 73,000 people and by being consistent in the top three(leading in 2007) ranking of trade surplus(ABPI 2007). Furthermore, laying more emphasis on one of the main companies in the sector (GSK) who own 9.0% of the sectors market share after the largest share holder of the sector (Pfizer 9.3%)(ABPI 2007). In getting to know its level and intensity of market competition, the Porters five forces will be used in for the analysis. This frame work was designed by Prof. Michael E. Porter of Harvard business school to determine the degree of competition within an industry (D. Campbell 2005). These five forces are bargaining power of suppliers, bargaining power of buyers, threat of new entrance, threat of substitute products and competitive rivalry. For the purpose of this report we will be looking solely at competitive rivalry but considering the fact that the other four forces determine its strength. This is where industries in the sector seek to maintain and gain more market share either by differentiation, innovation etc.(D. Campbell 2005).GSK acquired Stiefel for  £2.5 billion few months ago, Merck took over Schering Plough for a total of  £29.8 billion and, Pfizer s merger with Wyeth (guardian 2009), these activities shows that the giants of the sector are striving to maintain and if possible acquire more market share by acquiring smaller companies . 2.2 key drivers of change These are some external factors that affect GSK either positively or negatively and to an extent helped to her current position. This will be analysed with the used of PEST analysis frame work which are analysed below: Political concerning the regulation of medicines licensing, the government has had a good agreement with the industry (PICTF 2001) which will improve competitiveness within the European Union (EU). According to (PPRS 2009) the NHS must have access to medicines of reasonable price, quality brands in order to promote competition in the sector. The tax regulation has been a problem for the industry as it affects her UK based companies due to the proposal of increase in tax rate and taxing foreign profits (Buchanan, Barbara 2008) which has caused migration of companies like Shire pharmaceutical. Economic the hit of recession on the UK economy has resulted to increase in inflation rate which affected the pharmaceutical sector but not as much as other sectors (BBC 2009). With the fact that there is a shake in inflation rate, increase tax rate, wage drops. The average familys disposable income drop by more than  £150 a year (times online 2009) which has affected the spending power of the population. Socio -cultural- over the years there has been a change in peoples lifestyle whereby they go for fitness and health clubs at the expense of taking fitness and health medication. There has been an increase of 23% in membership between 2004 and 2008 and recently there has been 10% increase in the number of adult members despite the slowdown in the economic (Mintel 2009). However it has been discussed that there has been an increase in OTC drugs due to the fact that peoples now practice self medication because of minor illness (Bainbridge, Jane 2008) which has made the sector rise by 23% since 2003. The ageing population might be an opportunity for the sector since they are tends to have diseases like rheumatism and insomnia. Technological- over the years the use of technology has yielded nothing but positive effect on industry. The UK government supports GSK, Welcome Trust, and EEDA to develop a biotechnology science park in the UK in order to strengthen the industrys bioscience to compete against those in other countries (PBR 2009). Technology has helped to generate blockbuster drugs in the past and the membrane technology used in biopharmaceutical discovery, development and commercial production worth of $740 million in 2004 has increased to $1.23 billion in 2009 (BBC research 2004) which is as a result of its increase in research and technology. However havent analysed the external factors affecting the pharmaceutical sector, it is obvious that although some factors have affected the company negatively but she still maintained her market share and position in the economy because people keep spending on medication no matter the difficulties because wellbeing is essential. 2.3 Critical success factors This simply point at the products features that are valued by a group of customers and therefore, where the organisation must excel to outputerform competition (Johnson 2005) which can be said to identification of customers needs and things exceptionally done for this purpose which gives them competitive advantage. For a clearer knowledge, strategic groups in UK pharmaceutical will be briefly analysed. Strategic group- companies vary in different ways which make some operate similarly that differentiate some from others. In the UK pharmaceutical industry there are two main groups Generic and Proprietary group. The proprietary group adopts strategy of high price charges, patent drugs because of high RD spending and stress which makes the prone to high risk (high failure rate in drug development) and returns. The generic group focus on low price, low RD spending and imitate drugs made by companies in proprietary after expiry of patent. (Hill Jones 2007) .GSK spend  £300.000 on RD every hour and spends over $500million to develop a new drug that takes up to 12 years (Mintel, 2007), which obviously tells its membership of proprietary group. However havent identified GSKs strategic group in UK, its main rivals are the companies that belong to the same group and perform similar activities like Pfizer, Merck..who stand as threats to its profit because consumers see them as substitute for each other whereas patent can cause low substitute. Due to this it is hard for companies in generic group to break into this group because of high RD spending and skills. Gaining the idea of GSKS business model, the critical things it does for it survival and to meet the needs of its customers and attract more will be mentioned bellow. Advertisement and Marketing in 2001 GSK handed a  £53 million account to Mediacom to buy activities for its British customers (Marketing 2001) and support its media plan and also spent  £1million to support its sensodyne brand Television campaign(Chemist and Drug 2002). It also market 30 vaccines all over the world (Datamonitor 2009) Merger and Acquisition the formation of GSK in 1998 resulted to increase in sales the following year, huge number of staffs, increase RD capacity and have more products to meet customers needs (Smithklines four promising drugs in final stage of production and Glaxo Wellcomes blockbuster drug Zantac) (Lazo 2001) RD and Innovation it is important for pharmaceutical company to come up with faster ways of cure for diseases and always find a solution to new diseases. Due to this fact and business model GSK spend  £300,000 on RD every hour (cio100 2009) in order to keep up with the trend of continues discovery which leads to several innovations. According to (Datamonitor 2009) GSK has 40 major products and as RD continues, more innovations are to come. 3. KEY BUSINESS STRATEGY 3.1 mini introductions (past 5 years) Over the past five years GSK has engaged in adopting different strategies for the success of its business and meet customer needs (Emerald 2009) and the Porters generic strategy will be used to identify these strategies. 3.2 porters generic strategy Michael Porters gave his view of business strategy as the different ways that companies take to achieve competitive advantage in the industry (Drypen 2009) which he classified as Cost leadership, Differentiation and Focus. He explained cost leadership as a strategy of low cost business operation to have an edge over rivals in the industry and differentiation as a strategy of producing unique products valued by customers and might attract high price charges. He lastly describe focus as a strategy that targets a particular group or class of people whereby focusing for either reason of cost (cost focus) or differentiation (differentiation focus) which is usually low in volume. Taking note of the proprietary group and its characteristics, it is argued that GSK operate using the differentiation strategy which is be highlighted below. Non- stop RD strategy- GSK has always engaged in huge spending on RD as to develop its own drug and patent it as a member of proprietary and recently has led immediate rival Pfizer on a hidden RD partnership journey (Invivo 2009). Although their partnership was known to the public for sales of HIV drugs but here lies the secrete behind it. Sales marketing strategy- with the help of Vodaphone , GSK was able to market its Flixonase spray to cure hay fever to its customers through mobile text messages and its sales team (mobile marketing 2006) which makes it marketing standout from others. Outsourcing strategy- GSK and Galapagos Biotech formed an innovation alliance for the purpose of novel medicine osteoarthritis (A. Hoekema 2007) which GSK did with main intent of outsourcing for innovation because of expiry of patent. Expansion strategy- GSK formed a partnership with Dr. Reddys a generic drug maker in India and also bought 16% of Aspens stake, a generic drug maker in South Africa (mintel 2009). Its main objective was to have access to emerging market and generic drugs, sell many of it drugs (reduced rate) in Africa, Asia and Latin America. However it has been argued that GSK operates under differentiation strategy but we can see that as a result of patent expiry which led to direct completion with generic drugs, it changed strategies to do business with generic drug makers and use these avenue to penetrate emerging markets too boost it sales. 4. RESOURCES AND CAPABILITIES 4.1 introductions (past ten years) Over the past ten years GSK had developed some strategies as shown earlier in the report, we will be looking at its resources, capability and how it has been able to make these work together to actualise the strategies above to gain competitive advantage. These resources and capabilities can be threshold which is the necessary ones needed for it to function and compete in market while unique resources and core capabilities are those different, distinctive, to imitate ones that make companies gain competitive advantage over others in the industry (G. Johnson et.al 2005) 4.2 Companys resources and capabilities GSKs threshold, unique and core resources and capabilities will be reviewed below. Threshold resources Strong RD of new medicines- over half of GSks total sales come from blockbuster drugs which has made them rely on nine out of the drugs over the year (A. Townsend 2004). This has made them to make effort of developing more drugs as patent of the former expires. Skilled and talented staffs- as at 2008, GSK UK employed 99,003 staffs which includes scientists, pharmacist, IT  [3]  , sales (Datamonitor 2009) Large number of employee Gsk employs 99,003 people in 2008 (Datamonitor 2009) Employee motivation- GSK motivates their staffs with making salaries and bonuses competitive and reward for their performance. Supplier, buyers and stakeholders- GSK is a leading supplier of drugs and vaccine to NHS, fund academic research. Merging to gain more brand awareness- GSK is currently partnering with Pfizer to make a mega sell of HIV drugs. Capital for RD- it has been known that GSK spend over $500 million to develop a new medicine and takes 12 years or more (Mintel 2007) Unique resources Good reputation- GSK happens to fall amongst the first five of the worlds most admired pharmaceutical companies. (Mintel 2009) Threshold capabilities Ability to reduce cost- GSK has been slashing prices since 2001 after the merger and moving of some of his financial jobs to low cost countries like China and Poland. They have been able to cut cost by increasing money paid on its high selling drugs in order to reduce cost on it drugs faced with generic competition (Guardian 2005) Partnering Partnership with other biopharmaceutical companies to develop drugs to fight ailments e. g it partnership with Nabi for monoclonal antibodies to stop smoking (Silico research 2009) Core capabilities The great merger- the merger between Glaxo Wellcome and Smithkline Beecham which made it acquire block drugs, second largest consumer goods manufacturer in tooth paste and energy drinks (Lazo 2001) Dynamic capabilities The earlier stage of mergers where companies of the same view came together , which was known as the great merger that led to consolidation in pharmaceutical industry and formation of gsk. Later there was acquisition of smaller firms like the biopharma, science and biotechnology firms. Gsk acquired lot of these companies around this time. The last stage can be described with what is happening now in the industry where companies outsource, restructure and expand. Gsk has engaged in series of outsourcing and expanding activities. Like merging with Galapakos biopharmaceutical in order to outsource and avenue to enter emerging market (A. Hoekema 2007) 4.3 extent of alignment into business strategy SWOT ANALYSIS According to (G. Johnson et.al. 2005) swot help to give a forecast on how the key environmental issues and capabilities of a company will affect its strategic development. And (R. Lynch 2009 p:302) sees it as analysis of strengths and weaknesses present internally and opportunities and threats facing organization externally. STRENGHTS: Strong sales and marketing Robust sales forecast to lunch portfolio Strong brand name Demonstrated ability to control cost Highly innovative RD Advanced technology Profitability Expansion Strong rebranding image Financial ability WEAKNESSES: Restructuring required Failure of pipeline to deliver initial commercial expectation Over dependent on leading products Lack of block buster drug launches after the great merger OPPORTUNITY: Emerging new markets for pharmaceutical companies in developing countries Pipelines to deliver strong growth for next few years High growth oncology market Continued cost reduction Smaller biotech and biopharms THREAT: Increasing cost of RD Generic competition with high selling products Policy/regulation 5. CONCLUSION

Divine Comedy - The Guardians of Dantes Inferno :: Divine Comedy Inferno Essays

The Guardians of Dante's Inferno      Ã‚   Dante's Inferno is one of the best written works of all time because it was written as an allegory inside an excellent story.   A key part of this allegory was how Dante used different guardians in the various circles of hell.   These guardians were used to symbolize the punishments of the sinners.      Ã‚   Minos is the guardian of Circle II, the circle of the Lustful.   He symbolizes an accusing personality because his job is to give punishments to the sinners.   The bodies of the sinners confess the sins automatically, and that shows the sinners know everything about themselves when it is too late to repent.   Minos is important because he is used to stress that none of the sinners can doubt which sins they have committed, and that the crime will receive a matching punishment.   The lustful were carried away by their passions in their previous lives, and therefore they are thrown about by a black wind.   Dante considers lust to be the highest sin because it is mutually committed to the pleasure of both parties.      Ã‚   Cerberus is the guardian of Circle III, the circle of the Gluttons. Cerberus is meant to portray the image of uncontrolled appetite.   In mythology, he was known to devour people who approached hell, and therefore is a glutton himself.   However, being a glutton, he must surrender himself to his appetite.   His appetite just overtakes him when Dante throws dirt in Cerberus' mouth, and the poets are allowed to enter the circle.   Cerberus is an example of how everything must submit to the glutton's appetite, including his soul. This is a dark sin because they now worship food instead of God, and this is reciprocated by the rain, which belies the jolly nature of gluttons and gives them dark temperaments. Gluttony is a sin which involves one person, and it is more of a selfish sin, but the gluttonous are alone because they always ate alone.      Ã‚   Pluto is the guardian of Circle IV, the circle of Misers and Spendthrift.   Pluto is meant to symbolize riches, as he is the god of wealth that springs from soil in ancient mythology. This is appropriate because he guards those who hoarded money and those who spent it foolishly.

Internal Control Of A Group Company Accounting Essay

AbstractionToday, the argument of internal control is progressively of import to group companies. It is normally believed that a group is rather complex which would do a hard in pull offing hazards between different parts. The bankruptcy of Enron Corporation in 2001 is a milepost in the growing history of internal control. After that incident many establishments in the universe published their studies for teaching corporations ‘ internal control. This thesis introduces the thought of internal control, and the comparative back uping theories of building an internal control. Besides, explore the construction of a group company, and its concern of how to set up an inside internal control system. Finally, give a constructive decision of a group ‘s internal control by a instance survey of BP group.ContentEntire Wordss: 10221List of figuresFigure 1i?sThe COSO Cube Figure 2i?sDesign of balanced scored card Figure 3i?sBP ‘s system of internal control Figure 4i?sCurrent ratio of BP Group 1 Figure 5i?sCurrent ratio of BP Group 2 Figure 6i?sReturn on assets of BP Group ( 2007-2011 ) Figure 7: Daily Stock monetary value alteration of BP Group, compared with the FTSE all portion from 2008 to 2012Chapter 1 Introduction1.1 Aims of the surveyIn this twenty-four hours and age, the issue of internal control is progressively of import to group companies. It is normally believed that a group is so complicated which may doing a hard of pull offing the hazard occurs between the interior parts of a group. The bankruptcy of Enron Corporation in 2001 is a milepost in the development history of internal control. After that astonishing fiscal fraud instance, SEC ( Securities and Exchange Commission, U.S ) passed the Sarbanes-Oxley Act to modulate listed companies in order to accomplish a fiscal transparence. Among the act, subdivision 404 ( SOX 404 ) proposes the issue of ‘internal control ‘ , it requires each one-year study should incorporate an internal control study which shall foremost ‘state the duty of direction for set uping and keeping an equal interna l control construction and processs for fiscal coverage, and secondly contain an appraisal, as of the terminal of the most recent financial twelvemonth of the issuer, of the effectivity of the internal control construction and processs of the issuer for fiscal coverage ‘ ( Nadler and Kros, 2008:243 ) . Harmonizing to this SOX 404 act, different specific establishments in different states make out the elaborate guidelines for corporations. For illustration, in U.S. COSO ( Committee of Sponsoring Organizations of the Treadway Commission ) proposed guidelines in 1992 and 2004 for pull offing a house ‘s hazard and modulating their internal control system. In United Kingdom, FRC ( Financial Reporting Council ) makes out the Turnbull counsel as a administration codification of internal control. Those two are similar in contents.1.2 Administration of the thesisThis thesis is divided into seven chapters and organised as follows. Chapter 1 studies the backgrounds and aims of this survey. Chapter 2 is a literature reappraisal about the comparative surveies of internal control and group construction. Chapter 3 introduces the definition and how to implement an internal control by incorporating COSO and Turnbull counsel, which includes the intents, rules, and constituents of internal control activities. Chapter 4 is about a survey of back uping theories and their deductions for set uping an internal control system, which including bureau jobs, portfolio theories, institutional economic sciences, LLSV theories and Balanced scorecard. Chapter 5 emphasises the internal control in a ‘group ‘ company and the importance of scheme of a house by explicating the definition, features and an internal control frame for a group company. Chapter 6 is a instance survey of BP Group as the research methodological analysis, by look intoing and researching BP group`s internal control construction ; roll uping comparative fiscal informations to verify the effectivity of BP group`s internal control activities. Chapter 7 proposes a decision.Chapter 2 Literature ReviewBecause of the topic of this thesis is ‘internal control of a group company ‘ , therefore there are chiefly two sorts of articles are being collected. One is the documents about how to set up an internal control system, and the other is about the construction of a group company. Bower and Echlosser ‘s ‘internal control – its true nature ‘ in 1965 is normally believed as the earliest article in discoursing the internal control issue. This article debates the impression of internal control. He pointed out the intents of internal control are to do fiscal information system more dependable and to safeguard assets. In add-on, the true nature of internal control could be defined and saw by puting a fiscal information system. It is normally believed that a fiscal information system can run with small or no internal control. However, the fiscal information system can be reinforced by adding an internal control. Besides, adding internal control responsibilities could straight beef up the fiscal system. Such responsibilities can diminish the mistakes and fraud causation by people. ‘Internal control responsibilities are necessary because of the mental, moral, and physical failings built-in in people ‘ ( Bower and Echlosser, 1965:339 ) . Nevertheless, due to the early clip of this article, the writers did non discourse the application of internal control on corporations. Gauthier ( 2006:11 ) in his article of ‘Understanding internal control ‘ points out that the construct of internal control is non new. This article observes what each populace sector fiscal director and board member should cognize about internal control. Finish analyzing the indispensable grounds of fiscal studies which with a fraud ; the Treadway Commission believes that it is due to a deficiency of internal control system. Therefore, organisations supported the Treadway Commission to plan a Committee of Sponsoring Organizations ( COSO ) to modulate concern operations in endeavors. COSO defined five indispensable constituents to vouch a model of internal control inside a company is acceptable or comprehensive: a. control environment, b. hazard appraisal, c. control activities, d. communicating, and e. monitoring. However, there is no perfect model of internal control. Internal control ‘s nature is hazards ‘ variegation, instead than turning away. Spira and Page ( 2003 ) hold the position that the release of the Turnbull counsel is a program of the UK authorities, which intend to beef up corporations ‘ internal control. The counsel aligns internal control with hazard direction. Besides, this article discovers the alteration of building the argument about internal control and hazard direction with the UK company administration sphere by using a sociological position on hazard. In add-on, this article provides an of import support on the UK companies ‘ internal control frame. Soderquist ( 2000:375 ) points that ‘the current legal construct of the corporation is simple: a corporation is an unreal individual, and the inquiry for legislative assemblies, tribunals, and attorneies is whether this construct serves their demands. ‘ This article chiefly discusses different hypotheses in building corporations, provides utile information for researching the construction of corporations. Furthermore, this essay observes the bing legal construct, mensurating its utility and uncovering its bounds, thereby suggesting a sound corporation construct. Chandler ( 1992 ) examines concern companies ‘ operations and patterns from a historical position. He in add-on explores the value of the house from four economic theories, which are the neoclassical, the principal-agent, the dealing cost and the evolutionary ( Chandler, 1992:484 ) . Furthermore, explicating the beginning and growing of modern industrial corporations. This article besides provides a utile thought in explicating internal control in different types of group companies. Tsay ( 2010 ) deeply researches the Sarbanes-Oxley Act of 2002 ( SOX ) . He points that the subdivision 302 of the Sarbanes-Oxley Act requires direction of listed public companies should unwrap every alteration of their internal control systems. SOX subdivision 404 to boot requires that a direction has an duty on measuring the effectivity of its internal control systems and the rating study should be audited by a registered accounting house ( Tsay, 2010:53 ) . In January 2009 the Committee of Sponsoring Organisation of the Treadway Commission ( COSO ) published Guidance on Monitoring Internal Control Systems. The counsel runs a theoretical account to program and implement an internal control rating plan for the direction of a house. Besides, this article gives a cherished advice on uniting COSO counsel and corporations ‘ internal control system. More specifically, the paper solves the job of how to use COSO ‘s five constituents ( control environment, hazard appraisal, con trol activities, communicating, and monitoring ) with a corporation ‘s internal control system. Kiyak ( 2004:3 ) proposes ‘a theory-driven, testable, incorporate model that specifies the interrelatednesss between cardinal strategic concepts that define a planetary company: corporate planetary scheme, organisational construction, direction procedures, organisational civilization, corporate leading, and fiscal and market public presentation ‘ . The paper develops common definitions of the strategic concepts, and farther runs an empirical work by utilizing a web-based cross-sectional study in American transnational corporations. As the decision Kayak points that the procedure of corporate globalisation is a complicated interaction of multiple dimensions. ‘Skillful coordination and constellation of these cardinal facets are necessary to accomplish the coveted benefits of globalisation in transnational corporations ‘ ( ibid ) . This paper provides a utile advice on corporations ‘ globalisation from positions of planetary scheme, steadfast civilization a nd market.Chapter 3 What is internal control?3.1 IntroductionsIn this twenty-four hours and age the issue of endeavors ‘ internal control has become a hot argument during both academic and practical degree, because of the rapid developed direction theories and information engineering. Those new alterations demand enterprises to set up the modern corporation system which so includes an internal control system, for avoiding the happening of fiscal or non-financial catastrophes. A sound effectual internal control system could assist corporations heighten the quality of accounting information, protect the investors and understate the operation hazards. In this chapter, the definition of internal control would be discussed foremost, and so there are the grounds why a company need internal control. Finally, are the rules, intents and constituents of set uping an internal control system inside a corporation.3.2 Definition of internal controlThe earliest construct of ‘internal control ‘ occurred in 18th century, at that clip business communities used the simple mode which is to clear up comptrollers and tellers, for forestalling fraud and vouching the truth of histories. But with the increased graduated table of concern, the above simple method is going progressively uneffective in covering with complicated personal businesss inside company. More and more faculty members focus on researching for a better direction of houses. Consequently, in 1949, the American Institute of Certified Public Accountants issued a specific study entitled â€Å" Internal Control † specifying it as a â€Å" safeguarding of assets † , the â€Å" ensuring of the truth and dependability of accounting informations † , the â€Å" publicity of operational efficiency † and the â€Å" attachment to order direction policies † ( ABeam Consulting, 2009:2 ) . However, this definition was criticised by some faculty members for the range of duty of hearers was extended excessively far, for doing statements in favor of a narrower account of the construct of internal control. Bower and Echlosser ( 1965:338 ) pointed out that the last 2 of the above 4 facets of the definition of internal control, the â€Å" publicity of operational efficiency † and the â€Å" attachment to order direction policies † , have created many jobs of reading for hearers. In order to clear up the confusion, Statements on Auditing Procedure ( SAP ) No.33 and No.29 divide internal control into two parts, â€Å" accounting controls † and â€Å" administrative controls † . In add-on, SAP No.33 farther point ed out that the independent hearer is foremost concerned with accounting controls, the ground of which is that hearers bear straight on the dependability of the fiscal information. Accounting controls comprise the program of organisation and all methods and processs that are concerned chiefly with, and associate straight to, safeguarding of assets and the dependability of the fiscal records. They by and large include such controls as the system of mandate and blessing, separation of responsibilities concerted attempt with record maintaining and accounting studies from those disquieted with operations or assets detention, physical controls over assets, and internal auditing ( Bower and Echlosser, 1962:338 ) . Administrative controls comprise the program of organisation and all methods and processs that are concerned chiefly with operational efficiency and attachment to managerial policies and normally relate merely indirectly to the fiscal records. They by and large include such controls as statistical analyses, clip and gesture surveies, public presentation studies, employee preparation programmed, and quality controls ( ibid ) . However, Bower and Echlosser believed that the duality of the above two controls is merely overcast the arguments, non work out the job. The intent of internal control is to safeguard assets, and to guarantee the dependability of accounting information. However, ‘because of the mental, moral and physical failing inherent in people, it is necessary to set up a system of internal control in accounting study processs ‘ ( ibid:339 ) . By uniting their research Bower and Echlosser redefined the construct of internal control as follows: Internal control comprises the program of organisation and all of the co-ordinate methods adopted within a concern to safeguard its assets, look into the truth and dependability of the information produced by the fiscal information system ( ibid ) . Furthermore, Bower and Echlosser ( 1965: 340 ) believed that hearers should complete seven internal control responsibilities, they are: Supervision Clerical cogent evidence Admiting public presentation Transfering duty Protective step Reappraisal Confirmation and rating In 1992, the Committee of Sponsoring Organizations of the Treadway Commission ( COSO ) released a study named internal control — Integrated Framework which has been widely used in America and adapted by many other states. This study provided a cardinal counsel for set uping and implementing effectual internal control. In this papers, COSO defined internal control as follows: Internal control is a procedure, effected by an entity ‘s board of managers, direction and other forces, designed to supply resalable confidence sing the accomplishment of aims in the undermentioned classs: Effectiveness and efficiency of operations Dependability of fiscal coverage Conformity with applicable Torahs and ordinances ( COSO, 1992 ) . This model is important in the development of internal control, because it breaks out the tradition manner that AICPA dominates the comparative research, hence doing out a more specific and applicable model. By reasoning the COSO ‘s definition, it could be summarised into the undermentioned points: First, everyone inside the corporation is the participant, including managers, direction and employees. Furthermore, all the participant of internal control is contending for the three aims ( Effectiveness and efficiency of operations, Reliability of fiscal coverage, Conformity with applicable Torahs and ordinances ) . Finally, internal control is non a separate portion of a house ‘s matter, while it is a procedure, which running through the whole direction and disposal of corporations. In 1999, Turnbull Committee issued the Guidance for Directors on the Combined Code ( 1999 ) besides known as the â€Å" Turnbull Report † , which is a papers designed for the listed companies of London Stock Exchange. This publication defined internal control every bit good as COSO, from facets of accounting information dependability, internal control process, aims and rules. However, Turnbull study has the invention parts compared with the COSO 1992. It proposed that an endeavor ‘ internal control activities should be viewed as the necessary constituent of their civilization, because internal control system reflects the house ‘s operating environment. The study besides pointed that internal control as a important portion of hazard direction of an endeavor, would be helpful for carry throughing its strategic end. The constitution of internal control system would assist the endeavor to understate the fiscal loss, in order to forestall the strategic end from act upon ing by a possible bad fiscal public presentation. Furthermore, the study believed that internal control activities could advance working efficiency and result, safeguard assets and detect fraud seasonably. Additional, because of the continually developing hazard faced by a house, internal control system reduces, but can non extinguish the possibility of hapless opinion in decision-making ; human mistake ; control processes being intentionally circumvented by employees and others ; direction overriding controls ; and the happening of unforeseeable fortunes ( Financial Reporting Council, 2005 ) . A good system of internal control therefore provides sensible, but non absolute warrant of a house which will non be hindered in accomplishing its concern aims.3.3 Reasons why companies need internal controlInternal control system is an of import direction tool for safeguarding and protecting assets, particularly in the large, complicated corporation. By and large talking, a sensible applicat ion of internal control system could cut down losingss in bring forthing activities, and prevent the inside participants breach Torahs or ordinances. Besides, it helps to make an environment in which employees feel just. Following are some elaborate points of why companies need internal control. First of all, internal control keeps a high quality of a house ‘s internal and external accounting information. Under the internal control system, each accounting process runs carefully and cautiously, thereby taking a true, just and accurate accounting study, which makes inside managers and outside investors clear with the true operating circumstance of the house. Second, internal control plays a cardinal function of diminishing a house ‘s operating hazard. It is normally believed that a deficiency of supervising consequences in fiscal errors, which even threats the traveling concern of a house. The thought of internal control gives houses ‘ internal hearers the counsel ; provides them a series of judgement codifications in each procedure of concern, to better oversee comparative forces. Furthermore, a sound internal control system is a demand of a house ‘s accomplishment of long-run strategic end ( ibid ) . Long-time traveling concern of a house requires it has the ability of bearing tremendous operating force per unit areas. This force per unit area could be fiscal or non-finical. For illustration, a house should non merely concentrate on the external alteration of economic, policies and selling development, but besides notice the alteration of inside forces, the physique of enterprise civilization. Internal control system as a multifunction tool unifies the above demands. Finally, in order to maintain assets ‘ accurate and complete, internal control system provides efficient direction and supervising manners, to forestall the human mistakes or errors from harming the safety of assets. Additional, internal control could diminish the personal businesss of blowing resources because it includes the control of cost as its contents.3.4 Principles of internal controlThe rule of internal control means the guidelines or criterions of how to construct an internal control system. In the first topographic point, internal control activities must see their handiness ( Spira and Page, 2003 ) . It requires the house makes out sensible and suited control ordinances for implementing. The control ordinances should be written in the paperss as houses ‘ subjects. However, the ordinances should be neither excessively rigor nor excessively loose, because that would impact employers and employees ‘ ardor of executing plants. In add-on, planing an internal control system should to the full see the cost. The primary aim of internal control is to understate the possible hazard of losingss. If the internal control activities ‘ cost exceeds the control additions, it would go an unfavorable action. Therefore, corporations should use sagely when planing their internal control system. Furthermore, internal control of corporations should non cover every facet of activities. However, it should concentrate on the crucial processs which will deeply impact the house operating. For case, hearers might pay more attending on the opinion of house ‘s investing and funding activities because those personal businesss are normally company with hazards, while, for the low-risk day-to-day modus operandis, excessively much investing equals a waste of resources.3.5 Purpose and Components of internal controlThere are many readings about the intents of internal control. Among them, the COSO study gives the most widely recognised and sensible 1: aˆÂ ¦provide sensible confidence of accomplishing corporate mission, aims, ends and desired result while adhering to Torahs and ordinances ; let the company to accurately describe successes and results to the populace and interested 3rd parties. Serve as a common footing for directions, managers, regulators, faculty members and others to better understand endeavor hazard direction, its benefits and restrictions, and to efficaciously pass on about endeavor hazard direction ( COSO, 1992 ) . The constituents of internal control are normally including control environment, hazard appraisal, control activities, information & A ; communicating, and monitoring ( ibid ) . Those five parts explain what factors a sound internal control system should cover.Figure 1i?sThe COSO Cube( Beginning from: www.sox-online.com, 2012 )a†¦ . Control environment Control environment is the foundation of all the other constituents, it concludes the factors that would impact the house ‘s runing processs such as a house ‘s unity and ethical values, set of board of managers & A ; audit commission, direction ‘s doctrine and operating manners, organisational construction, assignment of authorization and duty and human resource policies and procedures ( ibid ) . A complete, sensible environment is the warrant and foundation of a sound control system, because it makes internal control system easy to be established. a†¦? . Risk Assessment Hazard means a sort of unexpected position of things, and hazards happen anytime and anyplace. A corporation may under the hazards from both internal and external in anytime ( Gauthier, 2006:13 ) . Therefore, a house needs to measure the possible hazards. More specifically, a house should place and analyze hazards which may happen in operating activities and fiscal studies. Designation is to recognize and fix adequate steps in progress for the possible hazards. For case, a house should measure the possible hazards of alterations in information about external competitions, macro-economic policies and the tendency of developing engineering. Furthermore, the internal policies, forces, and the operating construction. Analysing hazards means to measure the chance of hazards and how the hazards can impact the house, and how the house can understate the loss of inauspicious influence. a†¦? . Control activities Control activities are proposed to accomplish detailed control aims in order to understate the hazards. They are the peculiar processs, policies and patterns that are planned to safeguard concern aims. The control activities are wide-ranging, includes the undermentioned parts. a. Sufficient Segregation of Duties In a house, plants of mandate, recordkeeping, and detention should divide from each other to maintain the independency of section. For illustration, tellers and comptrollers ‘ plants should be separated clearly in order to forestall a fiscal pandemonium. B. Suitable Mandate of Dealingss and Activities Inside the corporation, there are two sorts of mandate: general and specific, the former is acceptable for everyday actions for which there are general policies to follow. However, for some specific minutess, peculiar mandate is required on a individual footing. c. Sufficient Documents and Records During the house ‘s operating, there would bring forth immense figure of fiscal or non-financial paperss and records. Internal control activities require consecutive paperss so lost points are noticed. Furthermore, it requires the economic informations are prepared as near to the covering clip as possible. Furthermore, the format of records requires well-designed instructions and proper infinites. Constitution of processs and policies Internal control activities need a set of processs to steer the patterns. In add-on, backup and recovery processs are besides necessary for the unexpected hazard. e. Independent Performance Checks Employers may bury or intentionally neglect to obey processs, or they may be careless unless person regulates and observes their everyday plants ( Gauthier, 2006:13 ) . Therefore, independent cheque is an indispensable process. a†¦? . Information and Communication Information and communicating support internal control by conveying orders from direction to employees in a signifier and a clip frame that allow them to carry on their control activities efficaciously ( COSO, 1992 ) . a†¦Ã‚ ¤.Monitoring Mentoring is a process to measure the quality of internal control sporadically through ongoing and specific appraisals. Monitoring could include both internal and external supervising of internal control by direction, employees, or outside parties. For many corporations, particularly big 1s, it is indispensable to construct an internal audit section for a better proctor.Chapter 4 Supporting theories and their deductions for set uping an internal control system4.1 IntroductionIn this chapter, some interesting theories would suggest to explicate how internal control is generated, and supply academic support for a corporation to set up its internal control system.4.2 Agency theoryThe root of bureau job is the separation of ownership and direction. After 19 century, companies began to spread out their selling because of a development of engineering. The traditional manner of household houses which uniting ownership and direction became progressively unfavorable for roll uping money for e nlargement ( mom ) . In order to work out this job, partnership, so corporations occurred. Stakeholders provide the necessary financess and a detached direction takes duty for pull offing the company. This separation could do full usage of stockholders ‘ capital and the direction ‘s cognition. However, there is a new job when dividing ownership and direction. First of wholly, the stockholders intend to make is to maximum their ain wealth, and derive the best return of the investing. However, the direction of a house prefers to see its ain benefits, such as the fillip, repute, working environment, vacations and so on. Therefore, it is non possible to extinguish the bureau job wholly. Furthermore, the stockholders as the investors in selling can utilize portfolio to understate their hazards, so they hope the direction invests the high return undertaking. However, the direction is hard to diversify their input. Therefore, comparing with stockholders, direction are risk-averse, and they normally give up those high hazard undertakings although which could increase the wealth of stockholders. Furthermore, information dissymmetry exists between stockholders and direction. Management take part the day-to-day operation of a houses, know the current fiscal and runing information, while the proprietors lack the professional cognition, and they do non straight take part the direction work, therefore can non do a just opinion of the work of direction. In add-on, because of an already mandate, the proprietor could non carry on a entire supervising. Thus the action of inauspicious choice and moral jeopardy would be done by direction. Through the brief sum-up of bureau job, a consequence is that it is necessary for a house to set up a sound internal control system, to organize the struggle of wealth between the ownership and direction. Although an internal control may increase the cost of operating, a company still needs it to forestall fund frauds and lower fiscal hazards. In add-on, through long-time internal control activities companies would happen equilibrium between bureau cost and value upper limit.4.3 Financial hazard and portfolio theories4.3.1 Definition of hazard‘Risk is a term frequently used to connote downside hazard, intending the uncertainness of a return and the potency for fiscal loss ‘ ( Verschoor, 2006 ) . The consequence of a hazard might be good, or non. Following are some characters of hazards. First, hazards are nonsubjective, every company can non wholly extinguish them. Additionally, hazards are besides unsure, they occur anyplace and anytime. Third, hazards are related to the return of undertakings. ( fm ) . It means when a topic bears a high hazard, it may derive a high return. That is why person feels like put on the lining.4.3.2 The type of hazardsa. hazard of macro environment This is a comprehensive hazard implicate the outside economic environment of houses ‘ mark state, such as the political hazard and societal economic hazard ( ibf ) . b. hazard of profession Because of the economic rhythm of a profession, corporations may confront the possible cycling recession which would convey the lessening of net incomes. For illustration, the market of general touristry would bear a slack season in winter. c. hazard of micro environment This hazard peculiarly occurs in the specific houses during their operating activities, because of the errors of employees, the failure in concern determination of direction and so on ( ibf ) .4.3.3 The step of hazardScholars tend to utilize math theoretical accounts to measure the hazard during the concern operating. By measuring the possibility of different state of affairss may happen, an expected return can be calculated by the undermentioned equation: Tocopherol ( R ) – expected return Rn – undertaking N ‘s return rates Pn – the possibility of undertaking N It is normally believed that a discrepancy ( VAR ) of the equation represents the hazard, therefore: ( frequency modulation ) Through this simple equation people could cipher the hazard easy, but this method is undependable because of the mistake in computation.4.3.4 Particular concern: the fiscal hazard of a house‘Financial hazard an umbrella term for multiple types of hazard associated with funding, including fiscal minutess that include company loans in hazard of default ‘ ( Investopedia, 2011 ) . Markowitz ( 1952 ) reported that ‘a scientific discipline has evolved around pull offing market and fiscal hazard under the general rubric of modern portfolio theory ‘ . He besides pointed that ‘in modern portfolio theory, the discrepancy of a portfolio is used as the definition of hazard ( ibid ) . There are chiefly three elaborate hazards as follows: Recognition hazard is most merely defined as the potency that a bank borrower or counterparty will neglect to run into its duties in conformity with in agreement footings ( Basel Committee, 1999 ) .A Investing hazard refers to the possible failure in the undertakings investing. It may destruct a whole corporation due to an inaccurate computation of the expected return of undertakings. Assetss impairment hazard refers to the loss of touchable or intangible assets due to unsure factors. For illustration, a replacing trade good possibly a strong challenge for the original manufacturers. Besides, new engineering and merchandise life rhythm would be a menace for entrepreneurs.4.3.5 Management of hazardThere are some manners for corporations to cover with the above hazards: Hedging, Reduction, insurance and acceptation. Hedging refers to avoiding hazards by utilizing compensatory actions, for case, do non publish securities in states that have terrible rising prices ; shut the subordinates in political relations unstable states ( ibf ) . Decrease agencies take actions to take down the hazard, for case, utilizing fudging contract to avoid foreign exchange hazard. Insurance is a manner to reassign the hazard by buying suited insurance merchandises. In this state of affairs, the hazard of a house will reassign to others. Acceptation refers to to the full accept the hazard of operating activities. It requires a house has a strong capital modesty. In general, a house seldom chooses to accept hazards.Institutional EconomicssInstitutional economic sciences accents larning, development, and restricted reason. It initial occurred on the twentieth century, and the representative economic experts are Thorstein Veblen, John R. Commons, and Wesley Mitchell ( Rutherford, 2008 ) . Hamilton ( 1987 ) pointed that ‘old institutionalism rejects the decrease of establishments to merely gustatory sensations, engineering, and nature. Tastes and outlooks of the hereafter, wonts and motives, are non merely determined by the nature of establishments, but besides limited and shaped by them ‘ . When people live and work in establishments on a regular footing, it shapes their universe positions. Basically says that traditional institutionalism focal point on the lawful foundations of an economic system and the evolutionary, used, and calculated procedure. The fluctuations of the establishments are surely a effect of the very inducements shaped by such establishments, and are hence endogenous ( ibid ) . Categorically, institutionalism is a traditional manner to response the current economic orthodoxy.4.5 LLSV theoryIn 1997, four celebrated jurisprudence and finance bookmans, La Porta, Lopez-de-Silanes, and Shleifer are from Harvard University, and Vishny is from the University of Chicago, issued the article ‘Legal Determinants of External Finance ‘ . LLSV ( 1997:1149 ) reported that states with poorer investor protections, measured by both the character of legal regulations and the quality of jurisprudence enforcement, have the smaller and narrower capital markets. In peculiar, Gallic civil jurisprudence states have both the weakest investor protections and least developed capital markets, particularly as compared to common jurisprudence states. LLSV ( ibid ) further discussed the relationship of jurisprudence and external finance, they pointed out that the legal environment has a immense consequence in the size of capital markets over states. LLSV ( 1998:1151 ) examines legal regulations covering the protection of corporate stockholders and creditors, the beginning of these regulations, and the quality of their execution in 49 states. The consequences display that common-law states normally have the strongest, and Gallic civil-law states the weakest, legal protections of investors, with German and Norse civil jurisprudence states located in the center. They besides notice that concentration of ownership of portions in the largest public companies is negatively related to investor protections, while consistent with the hypothesis that little, diversified stockholders are unlikely to be of import in states that fail to guard their rights.4.6 Balanced scorecardThe thought of Balanced Scorecard was proposed ab initio in 1992 by Kaplan & A ; Norton. They claimed that traditional fiscal accounting steps such as return-on-investment ratio and earnings-per-share rate might offer confusing signals for companies` uninterrupted bett erment and invention ( Kaplan and Norton, 1996 ) . ‘The traditional fiscal public presentation steps worked good in the industrial epoch, but they are out of measure with the accomplishments and competences companies are seeking to get the hang today ‘ ( Kaplan and Norton, 1992:71 ) . It means that the traditional financial accounting techniques focus on recording and gauging the past economic activities of corporations while it can non supply a wholly advice about companies ‘ current and future funding and puting events. Furthermore, in the current society of concern information, companies should take several factors such as clients, providers, employees, invention into consideration ( ibid ) . Therefore, balanced scorecard was offered from four chief positions to measure houses ‘ public presentation: the fiscal, client, internal concern procedure, invention and acquisition ( ibid ) . The purpose of balanced scored card is to take houses ‘ visions into actions ( Kaplan and Norton, 1996 ) .Figure 2i?sDesign of balanced scored cardBalanced mark card requires persons inside the group set up their ain scorecards, and on occasion look into the public presentation of scored cards. This result is related to their personal fillip. Mark cards are normally built based on four facets: fiscal, client, internal concern procedure, invention and acquisition. First, to recite non-financial informations, ‘What you step is what you get ‘ ( Kaplan and Norton, 1992:71 ) . It means to construe groups ‘ objects and thoughts into a series of aims, steps, ends and enterprises, which makes non-financial elements seeable and assessable ( Kaplan and Norton, 1996 ) .The above theories ‘ practical deductions for internal controlIn order to observe how internal control is generate, and why corporations should set up a sound internal control system for maintaining a good concern operation, the above portion introduces theories including bureau job, fiscal hazard and portfolio theory, Institutional Economics, LLSV theory and balanced scorecard. From a comprehensive position, following are some practical deductions of the theories for internal control. In the first topographic point, bureau job requires an internal control to protect the company owner`s benefits. In other words, bureau job is the root of internal control. Economists assume that resources can be divided into the undermentioned three: land, capital and engineering, and presume that what people pursue is to maximize their ain public-service corporation. With the uninterrupted development of productive forces, the graduated table of production of endeavors continuously expand, the proprietors of the company, though they have the economic resources such as land and capital, but non needfully hold the ability to pull off a concern ; However, directors occupy proficient resources, but no capital. In order to apportion resources expeditiously, the proprietors hire directors who have the ability to stand for them to take responsible for the operation of the endeavor. This action produces a separation of ownership and direction. But, the end of operators is non consistent wi th concern proprietors. The proprietor intend to maximize the value and make wealth for themselves, while the end of corporate directors are higher incomes, benefits and repute, which is consistent with the premise of economic adult male in the economic sciences, that is chase of their ain public-service corporation maximization. Furthermore, because of directors take responsible for day-to-day concern activities, they are able to make and hold on more concern fiscal information than the corporate proprietor, this is an information dissymmetry. Asymmetrical information can easy allow directors to do inauspicious choice and moral jeopardy, besides say that concern directors use private information to prosecute single public-service corporation maximization, the consequences of that may damage the endeavor ‘s value. Thus, bureau theories provide academic support for the reason of internal control. Besides, internal control as a powerful tool has utilised by the endeavor propriet ors for a better proctor. Second, fiscal hazard and portfolio theories propose to what widen internal control activities should accomplish. The bureau jobs lead to an happening of bureau cost, the being of bureau cost brings the hazard for proprietors. Thus the proprietors set up internal control system for modulating directors. Based on the comparative investing theory, in the same return rate, people prefer to take a undertaking with smaller hazard. Although there exists hazard of internal control costs, sing the world that investors normally can non to the full invest portfolios efficaciously to cut down a hazard, internal control hazard is still to be considered when judging an endeavor. Furthermore, institutional economic sciences makes internal control good organised. In order to cut down the bureau job caused by the hazard, proprietors would automatically supervise and control directors, inquire them to vouch and be responsible for the concern consequences. Some fiscal dirts show that the voluntary established internal control system does non run into the demands of the proprietors on the hazard control. Gradually, internal control system is developing to legal commissariats inside corporations. The institutionalisation of internal control is the consequence of concern enlargement. In bend, the institutionalisation of internal control strengthens the protection of the proprietor. Furthermore, LLSV theory of investor protection points out that when the capital market develops to a certain extent, the demand of protecting investors in capital markets in different states and different economic system is the same. The significance of set uping internal control is to protect investors efficaciously. Harmonizing to the theory of LLSV, mature capital markets require the mature internal control system, and internal control system criterions in developing capital market will bit by bit go rigorous as the mature market. Finally, balanced score card is a good practical manner of internal control. Balanced Scorecard ( BSC ) is a nucleus strategic direction and execution tool. It divides information into 4 dimensions, and makes it easy to be measured. The chief intent of BSC is to change over the endeavor scheme into elaborate actions, to foreground the comparable advantage. Inside the balanced scorecard, the factor of ‘financial ‘ and ‘internal procedure ‘ require endeavors set up sound internal control system, in order to vouch the accomplishment of endeavor scheme.Chapter 5 Internal control towards Group companiesIntroductionWith the progressively incorporate planetary economic system, the competition between states is really a competition between large companies and groups. In recent old ages, the group company has become an of import force and indisputably occupies a important place in the whole economic system, no affair in its size, efficiency or impact. However, after the lessons of Enron, Barings Bank and other serious incidents, it is concluded that: the success of internal control of a corporation is straight related to the company ‘s destiny. Corporations should rapidly set up a sensible system of internal control. The building of corporations ‘ internal control system should foremost guarantee the subordinate operating as a self-financing independent individuality. Second, prosecute the group ‘s overall involvements. However, the solution to the job of the effectivity of internal controls of the whole corporation is non simple, due to the many beds of direction inside the corporation, directors in the headquarter could merely through the indirect bid and control to restraint and proctor subordinates. The constitution of the group ‘s effectual internal control system is a cardinal to continuously better the overall value of a corporation and heighten the nucleus fight of the group. In this chapter, foremost introduce the definition and features of a group company. Additionally, the relevant survey provides a theoretical footing for farther researching the internal control manner. Then, in the last subdivision of this chapter we focus on a strategic way which uniting with characteristics of a corporation to transport out internal control`s relevant frame survey.Definition of group companySoderquist ( 2000 ) believes that a corporation is a configuration of relationships holding a varied and changing hierarchal construction. There is an ununderstandably big figure of relationships that can take topographic point in corporations, furthermore, many of these relationships will continuously change. A group is an gathering of parent and subordinate companies that function as a solo economic topic via a common beginning of control ( ibid ) . The impression of a group is frequently used in the revenue enhancement jurisprudence, accounting and house jurisprudence to clear up the rights and duties between companies. If a company involves in wholly different concerns, it is normally named a pudding stone.Features of group companyWhen it comes to group companies, people normally wonder what advanced a little and individual administration to go a multiple and complex group administration. Chandler ( 1992 ) points out that the thought of the group company is an account of alternate relationships between market and houses. In other words, the modern multiple endeavors ( groups ) will replace the traditional little companies when the direction and addendum inside a house could supply higher productiveness and net incomes, lower costs than the coordination of the outside market mechanism. Besides, it is a transmutation from the market behavior into corporations` internal buying behavior. For illustration, antecedently commercial activities are performed by several concern units, now through the restructuring or even amalgamation of corporations to make a trading internalization. Such internal dealing brings the undermentioned benefits for the expanded endeavor groups: First, minutess between inside units as a everyday work, which cut down the dealing costs. Second, for the production and selling ‘s integrating, information costs bead significantly. Finally, the coordination of integrating makes a steadfast to the full uses societal resources, hence heightening its efficiency. In this procedure, the types of parent and subordinate companies are the undermentioned three: First of wholly, concern enlargement. Corporations form a new subordinate driven by merchandise invention and industrial upgrading, to make a horizontal or perpendicular strategic integrating of subordinates. Second, capital driven. In order to accomplish the mark of strategic development, corporations use the methods of keeping, acquisition, amalgamation and equity engagement to command subordinates ( Soderquist, 2000 ) . Third, regional enlargement. The parent company develops specific regional markets, domestic markets or international markets based on the scheme demands of internal resources sharing, decrease of internal dealing costs and location advantage of market. All in all, no affair what sort of enlargement corporations are using, the indispensable features of a group company is that there is a parent-subsidiary based perpendicular organizational construction. In decision, the group does hold an independent legal position. More specifically, groups are consisted by a parent company with several subordinates, in other words, the group as the parent company includes a figure of subordinate companies. Subordinates are controlled by a parent company through keeping securities. Furthermore, equity and belongings rights are the nexus between a parent company and its subordinates. Furthermore, from the position of internal organizational relationships, on the one manus, the parent company and subordinates both have the independent legal position ; on the other manus, the parent company vertically controls low-level endeavors by busying equity or belongings rights.Fiscal Risks of a group companyDue to the big figure of subordinates, it is hard to to the full incorporate the resources inside a group. In add-on, the characteristics of fiscal hazards of a group are besides different from traditional endeavors and harder to work out. The first hazard of a group is possible debt default. Because of the so many direction beds inside parent company and subordinates, the hazard of debt default would be magnified ( Diana, 2005 ) . For case, each subordinate could be a guarantee topic, besides, could be a adoption organic structure. Some kinds of catastrophes such as inappropriate guarantee and big scale debt default would happen, doing a bad influence of the whole group ‘s repute. Even though, consequence in a prostration of a group. The 2nd 1 is a hazard of investing failure. Inside a group, the central offices can non acquire all the information of each subordinate, therefore it is hard to expeditiously supervise and measure each subordinate ‘s investing undertakings ( Buehler and Shetty, 1975 ) . Once a failure occurs, the loss of investing would be immense, to boot result in a big figure of non-performing assets and bad debts, thereby diminishing the net incomes of parent company. Furthermore, the benefit struggle between parent and subordinate company increases the fiscal hazard of a group. Harmonizing to the rational adult male theory, both parent and subordinate company are prosecuting their ain benefits maximal, therefore doing a batch of struggles in day-to-day concern operating. At the same clip, such many beds of direction consequence in a high direction cost and low efficiency. All of the above features increase the possibility of a group ‘s fiscal loss. Finally, a large group ‘s fiscal hazard would act upon the prosperity of regional economic system. More specifically, the parent company non merely impact the determination of subordinates but besides affect the steady of regional economic system. A prostration of a group would do a terrible societal and economic effect ; infinite failures of groups in the universe have confirmed this position.Specifications for a group ‘s internal controlIt is normally believed that an internal control system is designed for a peculiar administration. However, when speaking about a group company ‘s internal control system, things become complicated. It is stupid to utilize the same internal control contents between a group company and a common endeavor, because they are different in the facet of organizational construction, fiscal system and ability of bearing hazards. The nucleus of a group ‘s internal control is to use conjunct ends or schemes to aline and compress inside s ubordinates. Furthermore, strengthen the preparation of forces of internal control system, and finish the mechanism of incentive direction. Aiming to make a consensus of that the group is belong to the full participant includes investors, direction and employees. Because of the big figure of subordinates of a group, internal control for a group company may hold several particular characteristics and specific demands. First of all, unlike the little simple endeavor, in a group company internal control must cover the whole entity, which including both top-down and down-top control. For case, the parent company needs to supervise subordinates ‘ fiscal position, frailty versa ; subordinates should besides execute control activities towards the determination ordered by the parent company for avoiding an unsuitable order. Second, the control powers of different subordinates are non same ( Spira and Page, 2003 ) . For illustration, the types of subordinates include wholly-owned subordinates, joint stock company and keeping company. The parent company could merely execute a rigorous control to those close subordinates such as whole-owned houses, nevertheless, to those weak-linked companies, internal control activities are no demand and non poss ible to be perfect. Furthermore, unlike the common simple endeavor views the accounting and concern operation as the nucleus of internal control, a group tends to set ‘capital control activities ‘ as its cardinal procedure. In other words, the aim of a group ‘s internal control is to vouch a safe transmutation of hard currency flows from subordinates to the parent company. Therefore this kind of internal control is concentrating on the control of capital base on ballss in and out inside subordinates. Finally, manners of the parent company performs internal control in subordinates are assorted and different, because the control power is different. For case, for the wholly-owned subordinate, the parent company could straight delegate CEOs to take the direction, in add-on, scrutinizing and supervising the fiscal studies and budgets in order to command the capital flow. However, for the joint stock company or keeping company, the parent company could utilize their righ ts of vote in the general meeting of stockholders, to near an influence on the determination of targeted subordinate ‘s concern activities.Chapter 6 Research Methodology – a instance survey of BP groupAfter presenting the specifications for a group company, now a celebrated and typical group company is necessary to be analysed for back uping the points this thesis proposed. BP group as the sample of this instance survey is typical and constructive. In this chapter, we will present BP group ‘s internal control construction, and so carry on some informations analysis to verify the effectivity of BP ‘s internal control.6.1 BP group ‘s system of internal controlIn chapter 3 we have briefly introduced the COSO model and Turnbull study, they are celebrated instructions to endeavors for set uping an internal control system. However, when using those instructions into a group company, some revisions should be proposed. One of the most of import ‘revisions ‘ is to unclutter a long-run ‘strategic end ‘ of a group. The board of BP group takes duty for directing and oversing the whole company. The board has proposed a planetary end for BP group, which is to maximize long-run stockholder value through the allotment of its resources to activities in the oil, natural gas, petrochemicals and energy concerns ( BP PLC, 2010:32 ) . BP group keeps a wide system of internal control, which includes the general set of direction systems, procedures, organizational constructions, behaviors and criterions that are employed to carry on their concern and deliver returns for stockholders ( ibid ) . This internal control system is considered to run into the demands of internal control of the Corporate Governance Code in the UK and of COSO ( Committee of Sponsoring Organizations of the Treadway Commission ) in the US ( ibid ) . It solves hazards and how we can respond to them every bit good as the whole control environment. Core constituents of the system of internal control are: ‘the control environment ; the direction of hazard and operational public presentation ( including in relation to fiscal coverage ) ; and the direction of people and single public presentation ‘ ( ibid ) . The undermentioned image shows a comprehensive debut of BP group ‘s internal control system.Figure 3i?sBP ‘s system of internal control( Beginning from: BP.PLC Annual Report 2010:93 )The item contents of the control system are showed in the graph. Among the dynamic pie graph the hazard direction and operational public presentation should be viewed as a important portion. It includes concerns place, prioritize, manage, proctor and better the direction of hazards on a daily footing to fit them to cover with jeopardies and uncertainnesss ( BP PLC, 2011:123 ) . This enables the most of of import hazards can be identified. Mentioning to the facet of proctor, it is of import for BP to carry on a centrally control and proctor. BP`s centrally controlled procedure as a portion of internal control system, it consists of the undermentioned constituents: Accountabilities of forces of the group, to corroborate that there are reappraisal and mandate of proven militias engagements independent from the working concern and that there are effectual controls in the blessing procedure and verification that the proven militias estimations and the related fiscal influences are reported in clip ( ibid:90 ) . Capital allotment procedure, the proxy authorization is trained to prosecute in capital undertakings that are compatible with the bringing of the group ‘s concern program ( ibid ) . An official reappraisal procedure proposes to guarantee that both proficient and concern criterions are met old to the committedness of capital undertakings. Internal audit is to analyze whether the group ‘s internal control system is good designed and runing efficaciously to satisfactorily respond to put on the line that are of import to BP ( ibid ) .6.2 A confirmation of the effectivity of BP ‘s internal controlOn April 20th 2010 that was a catastrophe for BP group, due to the leak oil of Mexico gulf. This incident brought a black consequence of which BP had to pay 1000000s lbs to reconstruct the environment of Mexico gulf. However, from the chance of this thesis, it is a good opportunity to verify and analyze the effectivity of internal control system of the mark company after experienced such a hazard.6.2.1 Liquidity analysisThis portion aims to prove the ability of cashing of BP. Due to an incident of leak oil, BP must apportion immense figure of money to pay the Restoration work. Thus a information analysis towards BP ‘s liquidness could be a opinion for BP ‘s periodical internal control public presentation. Current ratios are viewed a swayer of a company ‘s liquidness. Following are graph of current ratio of BP Group.Figure 4i?sCurrent ratio of BP Group 1( Datas from: www.wikinvest.com, 2012 )Figure 5i?sCurrent ratio of BP Group 2( Datas from: www.wikinvest.com, 2012 )Form the image above, it is clear that in the 2nd one-fourth of 2010 the current ratio dropped evidently from 1.13 to 0.96, chiefly because of a immense hard currency outgo of environment Restoration work. While, from the 3rd one-fourth of 2010 the ratio had a steady addition from 1.01 to 1.25 ( till one-fourth 2 of 2011 ) . It is showed that BP group usage about 1 twelvemonth to increase their liquidness for the possible payment for the Restoration work. After the one-fourth 3 of 2011, the current ratio restored to the normal value ( around 1.15, above 1 ) as shows before the incident. To reason, from the chance of liquidness informations, BP ‘s internal control system was effectual and showed a speedy reacti on to the incident in seting their liquidness.6.2.2 Profitability and stock value analysisIn this portion, return on plus rate and stock monetary value would be used to analyze BP ‘s profitableness and stockholders ‘ assurance.Figure 6i?sReturn on assets of BP Group ( 2007-2011 )( Datas from: Thomson ONE Banker, 2012 )It is clear that in 2010 the return on assets was minus ( -1.22 ) due to a big figure of compensation payments decrease the return rate. However, merely 1 twelvemonth yesteryear in 2011 BP kept their return on assets rate to be 8.98 % . It is incredible for a company to hold such strong recovery ability but BP did it. It besides shows the hazard direction work of BP is first-class.Figure 7: Daily Stock monetary value alteration of BP Group, compared with the FTSE all portion from 2008 to 2012( Datas from: Thomson ONE Banker, 2012 )However, the stockholders seemed non to be that confident with BP. Harmonizing to the stock monetary value graph, it is easy to be concluded that before the Mexico incident, the stock public presentation of BP were ever better than the whole stock market, nevertheless, after the oil leak incident the stock performed worse than the FTSE all portions. Therefore, it shows that investors ‘ are non that confident with BP group. Due to stockholders ‘ subdued reaction to the stock, it shows that the internal control of BP has a job in communicating with public. Therefore, BP needs a more comprehensive sweetening in communicating with stockholders, investors and citizens.6.3 RestrictionsThere are chiefly two restrictions about this instance survey. First of wholly, the informations collected from the one-year study would non stand for the existent concern fortunes. It is normally believed that before a listed company releases its study they would use accounting houses to fancify their fiscal studies, thereby doing an mistake between written and true public presentation. Therefore, the analysis based on t his would non accomplish a complete carnival. In add-on, the stock market public presentation can non 100 % shows the true rating of a company. From the position of psychological science, investors have a ‘Herd behavior ‘ , which means people tend to carry on the same actions as most of market participants conduct. Take BP for an illustration, after the leak oil incident all the people plans to sell the stocks, therefore doing an unreasonable uninterrupted low monetary value of stock. Furthermore, a hapless public presentation of BP ‘s stocks is non merely due to the Mexico incident, but besides the planetary economic recession. Thus it would act upon the equity of the researching consequence.6.4 DecisionAlthough a sound internal control system has been established inside BP group, it is still hard to easy cover with the black incident. Furthermore, the protecting map of internal control it is still limited because hazard can non be wholly eliminated. However, the substance of internal control is a variegation of hazards, non turning away. Therefore, via the fiscal information analysis, the effectivity of BP group ‘s internal control is fundamentally satisfied.Chapter 7 DecisionThis thesis foremost reviews the construct of internal control, and so introduces relative back uping theories of internal control. In add-on, research the construction of a group company, and its issue of how to set up an inside internal control system. Furthermore, a instance survey of BP group is showed to intensify the points proposed in the former portion. After the instance survey of BP group, some valuable positions and inventions about how to hone a group ‘s internal control are concluded as the decision portion. In chapter 3 we have introduced the COSO model and Turnbull study, they are elaborate instructions to houses for set uping an internal control system. Here, we will discourse a group company ‘s internal control constituents by uniting the COSO and Turnbull instructions. When speaking about a groups ‘ internal control, we must foremost find the aims of internal control. COSO ( 1992 ) defined the aims of internal controls from three facets: economic system and efficiency of operations, dependability of fiscal and direction studies and conformity with Torahs and ordinances. Although the diverseness ends set by the COSO study can be more orientated to the internal control, but triggered a pandemonium of ends in coordination. COSO ( 2004 ) studies amended ‘reliability of fiscal and direction studies ‘ into ‘reliability of studies ‘ , this new definition of ‘reports ‘ screens endeavors ‘ all studies, including fiscal studies. In add-on, the COSO ( 2004 ) fr

Green Sea Urchin Fact Sheet

Green Sea Urchin Fact Sheet With its sharp-looking spines, the green sea urchin may look frightful, but to us, it is mostly harmless. Sea urchins arent poisonous, although you might get poked by a spine if youre not careful. In fact, green sea urchins can even be eaten. Here you can learn some facts about this common marine invertebrate. Sea Urchin Identification Green sea urchins can grow to about 3 across, and 1.5 high. They are covered in thin, short spines. The sea urchins mouth (called Aristotles lantern) is located on its underside, and its anus is on its top side, in a spot that is not covered with spines. Despite their immobile appearance, sea urchins can move relatively quickly, like a sea star, using their long, thin water-filled tube feet and suction. Where to Find Sea Urchins If youre tide pooling, you might find sea urchins underneath rocks. Look closely - sea urchins may camouflage themselves by attaching algae, rocks, and detritus to their spines. Classification Kingdom: AnimaliaPhylum: EchinodermataClass: Echinoidea Order: CamarodontaFamily: StrongylocentrotidaeGenus: StronglyocentrotusSpecies: droebachiensis Feeding Sea urchins feed on algae, scraping it off of rocks with their mouth, which is made up of 5 teeth collectively called Aristotles lantern. In addition to his work and writings on philosophy, Aristotle wrote about science, and sea urchins - he described the sea urchins teeth by saying they resembled a lantern made of horn that had 5 sides. Thus the urchins teeth came to be known as Aristotles lantern. Habitat and Distribution Green sea urchins are found in tide pools, kelp beds, and on rocky ocean bottoms, to areas as deep as 3,800 feet. Reproduction Green sea urchins have separate sexes, although it is difficult to tell males and females apart. They reproduce by releasing gametes (sperm and eggs) into the water, where fertilization takes place. A larva forms and lives in the plankton for up to several months before it settles on the sea floor and eventually turns into an adult form. Conservation and Human Uses Sea urchin roe (eggs), called uni in Japan, are considered a delicacy. Maine fishermen became huge suppliers of green sea urchins in the 1980s and 1990s, when the ability to fly urchins overnight to Japan opened an international market for urchins, creating a Green Gold Rush, in which millions of pounds of urchins were harvested for their roe. Overharvesting amid a lack of regulation caused the urchin population to bust. Regulations now prevent overharvesting of urchins, but populations have been slow to recover. The lack of grazing urchins has caused kelp and algae beds to flourish, which in turn has increased crab populations. Crabs love to eat baby urchins, which has contributed to the lack of recovery of urchin populations. Sources Clark, Jeff. 2008. After the Gold Rush (Online) Downeast Magazine. Accessed Online June 14, 2011.Coulombe, Deborah A. 1984. The Seaside Naturalist. Simon Schuster.Daigle, Cheryl and Tim Dow. 2000. Sea Urchins: Movers and Shakers of the Subtidal Community (Online). The Quoddy Tides. Accessed June 14, 2011.Ganong, Rachel. 2009. Return of the Urchin?(Online). Times Record. Accessed June 14, 2011 - no longer online as of 5/1/12.Kiley Mack, Sharon. 2009. Maine Sea Urchins Making a Slow Recovery (Online) Bangor Daily News. Accessed June 14, 2011.Maine Department of Marine Resources. Green Sea Urchins (Strongylocentrotus drobachiensis) in Maine - Fishery, Monitoring, and Research Information. (Online) Maine DMR. Accessed June 14, 2011.Martinez, Andrew J. 2003. Marine Life of the North Atlantic. Aqua Quest Publications, Inc.: New York.Meinkoth, N.A. 1981. National Audubon Society Field Guide to North American Seashore Creatures. Alfred A. Knopf, New York.