The hypotheses and how my research is conducted are set out in this chapter on research design. First I give an introduction on quantitative research in paragraph 6.1, followed by the hypotheses in paragraph 6.2. The research method will be discussed in paragraph 6.3 with thereupon an explanation of sample selection and data collection in paragraph 6.4 respectively 6.5. Validity and reliability of this research is discussed in 6.6. This chapter finishes with a summary in paragraph 6.7.
The introduction of Sarbanes-Oxley Act was fueled by recent incidents of accounting frauds by top executives of major corporations such as Enron. In contrast, Dodd-Frank Act was enacted as a response to the tendency by banks, insurance companies, hedge funds, rating agencies, and accounting companies to serve up harmful offer of ruined assets and liabilities brought by systemic non-disclosure (Anand, 2011, p.1). While these regulations have some similarities and differences, they have a strong relationship with the financial markets. Relationship between the Acts and Financial Markets: Since they are financial legislation, Sarbanes-Oxley Act and Dodd-Frank Act have strong relationship with the modern financial markets. This relationship is mainly attributed to the implications that the acts have on market participants, regulators, investors, and markets in general.
The global financial crisis hit banks’ regulation at its core. As significant portion of this crisis’ responsibility has been attributed to the lack of effective banking oversight, there has been immense pressure on the next Basel agreement to tackle such issues in order to avoid future crises, or at least decrease their severity. In essence, the Basel accords mainly intend to gauge the level of capital required to protect banks against risks related to their assets. As a result, the latest accord, Basel III, has substantially increased the capital requirements of banks and introduced other features as an effort to increase the soundness of the banking system. The banking industry, however, has proclaimed that it would promote mainly negative outcomes throughout the global economy due to higher required capital ‘set aside’.
Banking is a heavily regulated industry that is very protected to prevent crises that can cause huge economic harm. One topic that has been greatly debated in the history of financial systems is whether competition is good or bad for financial stability. It is complex and hard to know which side is right. Pretty much everyone with an opinion at least concedes that there are good points for both sides. All the arguments run both ways, and the evidence is mixed.
Before we can devise means for protecting the interests of each ... ... middle of paper ... ...act but on the efficacy of the actual claims of the group in question. Business ethics problems can be identified mainly as wrongful harms, misallocations, and misappropriations. These categories are commonly employed in economics, finance, and corporate law in the analysis of various kinds of problems, which are usually attributed to market failures, imperfect contracting, and other causes. However, many of these other kinds of problems arise from larger economic and political forces that would affect any theory of the firm. References Kenneth E. Goodpaster, "Business Ethics and Stakeholder Analysis," Business Ethics Quarterly, 1 (2001), 53-73; Allen Kaufman, Lawrence Zacharias, and Marvin Karson, Managers vs. Owners: The Struggle for Corporate Control in American Democracy (New York: Oxford University Press, 1995.
The cost of equity should be calculated using the Capital Asset Pricing Model. After calculating WACC my second analysis would be of the packaging machine investment. I will use incremental analysis and calculate NPV of the incremental cash flows of both strategies (to wait or to invest now). After calculating NPV’s of both scenarios I will calculate the difference between the two. In order to review the historical health of the firm I will calculate different ratios and gross margins and would try to see the trend.
1- Preliminary arrangements Progressively and for the sake of qualifying the proposed P-E's gap measurement context, the paper endorsed a number of acknowledged scholar techniques. The objective was to farm those techniques in order to spell out an acceptable managerial instrument, and to anticipate the concept of flexibility. a) Questionnaire /constructs development For developing a questionnaire, exploratory research is needed to investigate the likely determinants or attributes to be considered. Personal or focus interviews with the service users would be recommended. And for defining the scale attributes, a manager can capitalize on the previous empirical works cited in literature that are relevant to his or her own service sector.
The message is clear that it is under scrutiny, if accountants want to be relevant, they have to be more diligent and ethical. In recent years, there are many financial scandals in some very big corporations in Malaysia. According to the former Malaysian Institute of Accountants (MIA) President, Abdul Rahim Abdul Hamid, the responsibility of any wrongdoing in any company is on the shoulders of the directors, senior management team as well as the auditors, among others (MIA, 2007). As a result, litigations taken against auditors are increasing in number. For example, there are many financial scandals which include Perwaja Steel, Oilcorp Berhad, Transmile Group Berhad, Megan Media Holdings, Southern Bank and Technology Resources Industries Berhad.
Firstly, it introduces the background and related literatures of corporate fraud. These literatures present how corporate fraud reduce market value and increase the cost of equity. Secondly, it provides the background of Chinese stock market and regulators which are different from developed countries. Since the firm’s financial information can not be completely reflected by stock price in inefficient stock market of China, an alterantive perspective of debt financing has been proposed by several researchers. On the other hand, increasing occurrence of corporate fraud lead regulators’ credibility to be questioned and thus it is necessary to investigate on the long-term influence of fraudulent behaviors on the firm’s activities.
The report demonstrates why internal looting of companies is still a major problem in the United States despite having the best regulatory measures across the world and the effect of the looting on capital losses and lower rate of return. Notably, the main focus of the report is to provide important information to Mr. Smith regarding his concerns about capital losses and lower rate of return because of his decision to become a venture capitalist.