Management is responsible for the preparation and fair presentation of the consolidated financial statement of JP Morgan Chase Bank N.A. in accordance of GAAP. The main purpose is to recognize any reasonable assurance to test the consolidated financial statements of any material misstatements. The audit of JP Morgan Chase Bank N.A. present fairly, in material respects, the financial positioning of the firm. The FASB issued revenue recognition guidance with the intent of creating greater consistency with respect to revenue from customers, by how and when contracts will be represented on the income lines. Guidance states that revenue from contracts with customers must be recognized upon delivery of a good or service based on the amount …show more content…
Other Business Risks • JPMorgan Chase’s operations are subject to risk of loss from unfavorable economic, monetary and political developments in the U.S. and around the world. • JPMorgan Chase’s operations in emerging markets may be hindered by local political, social and economic factors, and may be subject to additional compliance costs and risks. • JPMorgan Chase relies on the effectiveness and integrity of its processes, operating systems and employees, and those of third parties, and certain failures of such processes or systems or misconduct by such employees could materially and adversely affect the Firm’s …show more content…
Risk Management • JPMorgan Chase’s framework for managing risks and its risk management procedures and practices may not be effective in identifying and mitigating every risk to the Firm, thereby resulting in losses. Other Risks • The financial services industry is highly competitive, and JPMorgan Chase’s inability to compete successfully may adversely affect its results of operations. • JPMorgan Chase’s ability to attract and retain qualified employees is critical to its success. • JPMorgan Chase’s financial statements are based in part on estimates and judgments which, if incorrect, could result in unexpected losses in the future. • Lapses in disclosure controls and procedures or internal control over financial reporting could materially and adversely affect the Firm’s operations, profitability or reputation. • Damage to JPMorgan Chase’s reputation could damage its
Recognized as one of the largest and oldest financial institutions in the world, JP Morgan Chase & Co is the world’s fourth largest bank by total assets. Dating back as far as 1799 where its earliest predecessor was established in New York, JPMorgan Chase & Co was founded in 2000 during a merger between Chase Manhattan Corporation and JP Morgan & Co. Today it has developed into one of the world’s top multinational banking and financial services holding company. Built from the foundation of more than 1200 former institutions, comes the JP Morgan Chase and Co brand that leads in the finances and advancement of the United States and the economy.
Residual fraud risks could be included in the report. Because high cost and time consuming, some controls may be not using. Fraud risks can be addressed by accepting the risk of a fraud based on the perceived level of likelihood and significance, increasing the controls over the area to mitigate the risk, or designing internal audit procedures to address specific fraud risks. Management needs to implement the right level of controls based on the risk tolerance it has established for the
It is important for a company to control fraud risks in any departments whether it is internal fraud or stock fraud. It’s important to put controls in place to protect company reputation and assets.
This report contains information that is calculated under accrual accounting principle. Because all transactions are recorded at the time when they are made rather than when actual money has been made or received, there is a likelihood that transactions are shown on one accounting period but actual change has not be made it, and it may deliver biased information about the company’s true financial position.
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
Other types of exchange rate risks are translation risk and so-called hidden risk. The translation risk relates to cases where large multinational companies have subsidiaries in other countries. On the financial statement of the whole group, the company may have to translate the assets and liabilities from foreign accounts into the group statement. The translation will involve foreign exchange exposure. The term hidden risk evolves around the fact that all companies are subject to exchange rate risks, even if they don’t do business with companies using other currencies. A company that is buying supplies from a local manufacturer might be affected of fluctuating foreign exchange rates if the local manufacturer is doing business with overseas companies. If a manufacturer goes out of business, or experience heavy losses, it will affect all the companies it does business with. The co...
Country's policies potentially affect a country’s vulnerability to debt-serving problems, particularly if the external economic environment becomes unfavorable.
Introduction This paper will analyze the mission and vision statements of JPMorgan Chase & Co against the performance of the organization. An evaluation of how well the company lives out its mission and vision statement will be provided. The organization’s strategic goals linked to the company’s mission and vision will be assessed. An analysis of the company’s financial performance to determine the link between the company’s strategic goals, strategy, and its financial performance. A competitive and marketing analysis of JPMorgan Chase & Co will be conducted to determine its strengths and opportunities.
The ability of the management to fulfill financial reporting roles depends on the design and effectiveness of the process as well as the security that is put in place over financial and accounting reporting. Without this controls, it will be difficult for businesses to prepare reliable and timely financial reports for lenders, investors, management and other users. While there is no guarantee that financial reports will miss errors, effective internal control systems over financial reporting are able to substantially minimize such inaccuracies or errors in financial statements of the company.
With China planning to open up gradually the banking sector and the constant introduction of new businesses, commercial banks are facing more pressure on the risk management. Operational risk is the inherent risk of commercial banks, and it cannot be avoided completely. However it was investigated that the operational risk was resulting from the credit risk mostly, and it referred to the Ethics in the risk management. There are same like the line graph as following:
( )( )( ) “A financial statement represents a formal report, showing records of financial activities of an entity at the end of an accounting period, in order to review the financial strength and performance of the entity. Where it summarizes the accounting process and reflects the financial effects of a business’s transactions, and the financial position of a business during a particular period of time. Furthermore it serves as the main method of communicating financial information about decisions that have been made by a business entity to inside and outside parties.” ( ) “People who might be interested in an entity’s financial statements need information on that entity for a variety of purposes. Lenders for example need information about the ability of the entity to pay back the loan on time and with interest, employees are a second example as they are interested in information on their employer’s stability and profitability. Potential investors need to know the risk inherited after investing in an entity thus they use financial statements to help them” ( ) “A financial statement is made up of
The company recognizes that it is subject to both market and industry risks. We believe our risks are as follows, and we are addressing each as indicated.
Gunther, Jeffery, ¡§Financial statements and reality: Do troubled banks tell all?¡¨ Economic & Financial Review. Third Quarter 2000, p. 30-35.
6. Members disclose to affected parties known or potential conflicts of interest or other circumstances which might influence - or appear to influence - judgement or impair the fairness or quality of their performance.
Saunders, A., & Cornett, M. M. (2011). Financial institutions management: A risk management approach (7th ed.). New York, NY: McGraw-Hill/Irwin.