Riordan †International Marketing Plan

Riordan †International Marketing Plan Free Online Research Papers Riordan Manufacturing is an industry head in the assembling of plastic infusion forming. Presently, Riordan Manufacturing utilizes 550 individuals and has yearly profit of almost $46 million. Their parent organization, Riordan Industries, surpasses $1 billion dollars for each year in income. At present, Riordan markets their items predominately in the United States yet are building up an International advertising effort for a few nations in Asian market with an accentuation on South Korea. Moral strategic approaches should be a piece of the showcasing methodology actualized. With regards to South Korea, â€Å"It is a significant worldwide financial force; it has the fifteenth economy on the planet and the fourth in Asia, behind Japan,China and India. Its biggest exchanging accomplice and fare showcase today is China.South Korea has accomplished fast monetary development through fares of made merchandise, and is one of the Four Asian Tigers. Significant ventures in South Korea today are autos, semiconductor, hardware, shipbuilding, and steel.† There is 3 things should be considered for the showcasing effort: the organization, the business, and society. The first interesting point is the worker of Riordan Manufacturing. It is significant that choices made inside the organization are done in a house that is reasonable and positively affect the workers of the organization. For instance, pay bundles ought to agree with laborers aptitude levels and experience. It could be viewed as exploitative for Riordan to pay higher wages to laborers in a single segment of the organization and lower wages to representatives that have equivalent work aptitudes however work in another office. Segregation is region that consistently brings up issues on moral strategic approaches. Riordan should know about the work laws in South Korea to stay away from untrustworthy recruiting rehearses. The South Korea gadgets industry in general is another zone to consider that could be influenced by deceptive strategic policies. One way that the business or specific organization could be influenced by dishonest practices would be using bogus or deluding publicizing. In the event that Riordan created publicizing pieces that portrayed the opposition in a bogus or negative manner would be a significant moral infringement and most likely have a negative effect of Riordan Manufacturing. This kind of infringement could likewise affect Riordan’s acknowledgment into other worldwide markets in the event that they make a notoriety of being deceptive. Significant item providers and sellers might be reluctant to work with Riordan in the event that they are seen as unscrupulous. The last territory of worry that might be incredibly affected by dishonest strategic policies is society. This incorporates customers and every other person that either purchases or uses Riordan items. A case of sketchy morals could be selling items in South Korea that are made with less quality materials, debasing the quality and attempting to sell at the equivalent or more prominent cost so as to arrive at higher net revenues. Ecological issues likewise ordinarily play on morals. Issues could emerge if Riordan were intentionally or unexpectedly dirtying the earth, along these lines it is significant the Riordan knows and keep ecological laws in South Korea and other worldwide markets. Riordan advertisers should likewise be delicate to the distinctions that exist between the way of life in the US and South Korea. Promoting efforts that are effective in the US might not have a similar accomplishment in South Korea. Various societies may have various perspectives on what is viewed as good and bad, consequently advertisers should direct broad examination on remote markets and their societies before actualizing a showcasing effort. The choice to start showcasing to the whole Asian district will have a few ramifications on the current promoting system. To begin with, Riordan should modify their promoting endeavors to mirror the various societies that exist in various locales of Asia. Asia is included numerous nations and with various dialects and societies, which makes promoting progressively troublesome. The Korea Information and Communication Trade Unions was framed to solidify nations inside Asia and make one financial market, which does some to streamline the market, however there are still contrasts that exist in various nations. A huge global market can be exceptionally valuable to Riordan from multiple points of view. â€Å"A organization like Riordan, which bargains in large scale manufacturing, can circulate bigger amounts of items all through the whole area while expanding economies of scale.† Riordan Manufacturing has been an industry chief for a considerable length of time in light of their imaginative item plan and capacity to emotionally advertise their items. In the event that Riordan is to make progress in the South Korea advertise, they should know about morals in accordance with society, the business, and Riordan representatives. Advertisers need to inspect the progressions and adjust to the distinctions that exist between the US and South Korea markets so as to make progress. References: en.wikipedia.org/wiki/South_Korea â€307k Cateora, P. Graham, J. (2007). Universal Marketing (thirteenth ed.) McGraw Hill, New York, NY. Exploration Papers on Riordan - International Marketing PlanRiordan Manufacturing Production PlanMoral and Ethical Issues in Hiring New EmployeesDefinition of Export QuotasAnalysis of Ebay Expanding into AsiaTwilight of the UAWMarketing of Lifeboy Soap A Unilever ProductPETSTEL investigation of IndiaBionic Assembly System: A New Concept of SelfOpen Architechture a white paperNever Been Kicked Out of a Place This Nice

Where To Find Free GMAT Practice Tests

Where To Find Free GMAT Practice Tests  Preparing for the GMAT can be one of the most overwhelming undertakings of your life if youre genuine about getting into graduate school for your MBA. You need to score as high as could be expected under the circumstances. You need the absolute best test prep materials, regardless of whether that be GMAT books, applications, or classes. To the exclusion of everything else, you need to discover GMAT practice tests so you can recreate your testing experience over and over to ensure youve took care of business. Does that sound exact? Provided that this is true, here is a rundown of GMAT practice tests accessible for you to prepare your little heart out.â GMAC GMAC, the Graduate Management Admission Council, offers free GMAT practice tests for would-be analyzers through their downloadable programming. With the product, you get 90 free practice questions -  30 Quantitative, 45 Verbal, and 15 Integrated Reasoning - alongside two free full-length GMAT practice tests with answers. There are a huge amount of different rewards like a GMAT Quantitative survey alongside apparatuses you can use to make your own training questions. On the off chance that you need more than what is offered on the free form, you can expand your examinations by hacking up the cash.â Get The GMAC GMAT Practice Test Babson (F.W. Olin Graduate School of Business)â Without a doubt, theres somewhat of an admonition. It wouldnt be American if there werent, isn't that so? Youll need to join by means of email and consent to acknowledge messages from Babson school alongside the Economist GMAT mentor, yet you can generally stop those if fundamental. The great part is that you can join and take a smaller scale (20 moment), little (100 moment) or full (2.5 hours) GMAT practice test on the web and get a point by point examination of your mix-ups alongside complete tips to fix those blunders. Presently, that is only a success win. Get The Babson GMAT Practice Test The Princeton Reviewâ Prepared to utilize probably the greatest name in the test prep world to get your free GMAT practice test? Obviously you are. The Princeton Review offers free testing; in light of your postal division, it will either act naturally paced on the web or face to face. Youll take the testâ with indistinguishable testing conditions from the real GMAT, so youll have the option to make sense of the sort of mental quality and individual abilities expected to ace this awful kid. Reward? You will get a customized score report that shows your qualities and shortcomings. Get The Princeton Review GMAT Practice Test Veritas Prep A PC versatile test, one that is much the same as the genuine test GMAT, is wayâ better than the tests youll use in a GMAT book. Enter Veritas Prep. They offer a CAT GMAT so youre experience is much the same as what youll see on test day. Youll likewise get score execution examination and the choice of purchasing six more GMAT practice tests for just $15.00 once youve stepped through the free examination. Presently, if that is not a decent arrangement, I just dont recognize what is anymore.â Get The Veritas Prep GMAT Practice Test Kaplan Kaplan, the biggest name in test prep, offers a free GMAT practice test in a few unique manners. Initially, you can pick oneself administered GMAT test and take the test whenever the timing is ideal. Or then again, you can pick the live online adaptation, where youll take the GMAT test with an educator on the web and have the option to get your inquiries addressed by means of live talk. Whichever way is a success, considering both are free and both offerâ detailed score examination, answers and live clarifications from the Kaplan faculty.â Get The Kaplan GMAT Practice Test Last Notes The best thing you can accomplish for yourself is to take one of these GMAT practice tests cold. Dont get ready. Dont even split a GMAT book. That way, youll realize how to center your examinations when youâ doâ start getting ready for the test. Your qualities and shortcomings will be uncovered so you can all the more likely deal with your examination time.â Good luck!

Law of the European Union Essay Example | Topics and Well Written Essays - 1250 words

Law of the European Union - Essay Example Rivalry law advances and improves rivalry in a given country. This is on the grounds that once they exist, various business visionaries have an equivalent opportunity to set up organizations that can rival existing organizations. This is on the grounds that in a country with a locale that jelly rivalry laws, there is a decent possibility that an ever increasing number of organizations can be opened up and this will incite advancement and help organizations to look for the best outcomes. Richard Whish expressed that As a general suggestion rivalry law comprises of decides that are planned to secure the procedure of rivalry so as to amplify customer welfare3. This announcement proposes that opposition law at last tries to secure the eventual benefits of customers. This paper looks at the legitimacy of this statement through the assessment of European Union Law. As a foundation to the assessment of customer premiums, the examination will inspect the key part of market structures. The paper at that point proceeds to investigate European Union law to distinguish how rivalry law accomplishes the finish of ensuring purchasers. Market structures looks at some key segments of rivalry from the perspective of financial aspects. The essential supposition of market structures is that in each market, there are two predominant gatherings: purchasers and merchants. Venders are the business people who produce products and enterprises for purchasers. Venders have a solid relationship with purchasers since purchasers give income to merchants to stay gainful and in business. So a fundamental supposition of this part of financial aspects is that the higher the value the higher the amount produced4. Purchasers then again look to spend the least measures of cash on merchandise and enterprises. So there is a sort of contention among purchasers and merchants. Though purchasers look for the least costs, merchants try to get the most elevated measure of income from purchasers. This is the premise of

The Great Depression The Impact to US History - Free Essay Example

The Great Depression was a period of time marked by economic turmoil and the struggle to find ways to thrive in a society that was quickly deteriorating. The Great Depression created constant hardship and tension that only continued to escalate as the years passed. This turmoil created by the Great Depression began after the stock market crashed in 1929 and there was no end to the devastation until 1939. The buildup to the stock market crashing was a like a snowball rolling out of control and many people did not heed the warning. The stock market was constantly rising or dipping low, depending on the days which caused many investors to get nervous and start pulling their money out. Many societies during the Great Depression were left struggling as they tried to overcome this economic catastrophe. This event brought about a great change in many ways both economically and socially. America 1933 by Michael Golay provides an inside look through the eyes of Lorena Hickock who set out to detail the devastation of the Great Depression and its effects. The Great Depression and The New Deal by Kevin Hillstrom explains the background about the stock market crash as well as the impact the New Deal had on the Great Depression. This text analyzes the impact this event had on the economy as well as the impact on American families. The effects of the Great Depression altered peoples belief in the e conomy and dramatically changed how people lived. The Great Depression took an economical and psychological toll on American society while changing the course of history that can still be felt today. The Great Depression was a monumental event that took place and impacted how people lived their lives, and it changed their views on possessions and worth. It was a defining moment in the lives of many Americans whose lives were greatly impacted by this event. The Great Depression made its grand appearance after the stock market crash in 1929. According to History.com, the Great Depression reached a low point when there were 15 million Americans who were unemployed, and many of the banks had crashed (Great Depression 1). The Great Depression occurred as a buildup of many situations that came to a head once the stock market crashed. By the time the 1920s came around, many Americans were buying with credit and putting their money into stocks in the market. In doing so, this plunged many American families into debt they could not get out of. Those who were farmers dealt with prices dropping which influenced them to mechanize their farms, which in turn caused many farms to expand causing them more debt. Farms were often foreclosed upon because of overproduction and low prices (Green 1). There has been a lot of controversy and theories about what caused the Great Depression to occur. According to John Green, the Great Depression occurred because of a weak banking system. While depositors worked on moving their money out before the banks went under, banks called in loans and sold assets which meant credit froze up which destroyed the economy. A frozen credit system meant less money in circulation which led to deflation. Banks werent lending money so employers couldnt borrow it to make payroll to pay workers. More banks were going bankrupt as more workers were unable to purchase the goods services that would keep businesses open (Green 1). This meant that banks had to rely on their own resources and massive unemployment became evident soon after as well as the hardship that followed in trying to recover. The Great Depression was evident throughout history business co llapse and increase in taxes that was felt and made an impact in the lives of many. People were struggling to recover after it ended from unemployment or debt and their faith and trust in the economy was destroyed after the crash. The Great Depression caused a lot of economic turmoil that was felt throughout the country as well as different states in the United States. The impact of the Great Depression on history was major as it led to a deep fear of the stock market as well as how the economy and jobs would hold up after this monumental event ended. People were fearful to invest in stocks after all their work went up in smoke when the stock market crashed. In doing so, the economy put millions of peoples lives in jeopardy as well as leaving many without jobs, or a way to thrive in a failing society. Before the Great Depression, millions of Americans were hopeful about life and everyone was enjoying the freedom. Before the stock market crashed, the energy was positive, and people were hopeful and optimistic for the future. New developments were being made such as the telephone and automobiles as well as having well-paying jobs and living a comfortable lifestyle (Hillstrom 7). With this, we see how people were enjoying life without any worries. They were caught up in the new developments that were occurring, but little did they know how drastically their life was going to change when the Great Depression began. Once the Great Depression hit, unemployment skyrocketed, and businesses soon started going under because they had to lay workers off to try to offset what they lost.tens of thousands of businesses collapsed. Wages in manufacturing industries plunged from $16 billion in 1929 to less than $7.7 billion in 1932. The U.S. Gross National Product, the total dollar value of all goods and services produced for consumption during a given period of time, slumped from $104 billion in 1929 to $41 billion in 1933 (Hillstrom 29). These numbers show just how much the economy took a hit during this time and why so many people were struggling to support their families and keep food on the table. The Great Depression impacted class levels and societies and left a lasting impression on every aspect o f society and humanity. It left behind a path of destruction in its wake in the form of economic hardships, and a society that struggled to rebuild itself after the impact. People were fearful of what their lives would entail, and they wanted answers. There was frustration among the American people because they were struggling to understand why this was happening when they started enjoying life and the new developments. Another drawback from this event that affected both history and the economy was that federal income taxes were increased. The Revenue Act of 1932 doubled normal federal income tax rates for individuals. It also imposed a host of new taxes on the sale of all sorts of goods that were a part of everyday life, from gasoline, tires, and toiletries to electricity and telephone service (Hillstrom 37). Families from all across the United States felt the effects of the Great Depression as they struggled with understanding why this was happening. They were frustrated because they were trying to survive a harsh environment that was relentless is causing havoc and devastation. Adding increased taxes on families who were already struggling left them feeling undervalued and wondering how they would make it through this desolation that was slowly consuming lives. Instead of using the government to help many American families out of their suffering, President Hoover didnt want to have to shoulder th e weight of the relief effort to help those who had fallen victim to the Great Depression.the president convinced Congress to pass a massive increase in taxes so that the federal budget could be balanced. The United States thus imposed major new tax increases at a time when huge numbers of Americans were desperately searching for enough money to keep their homes and feed their families (Hillstrom 37). It was turning both the economy and family lives upside down as farmers struggled with foreclosures, businesses were struggling to find ways to repay their debt, and families were struggling to find ways to keep their homes and keep their families together during this hard time. Farmers largely felt the impact of the economy as they struggled with prices and foreclosures.the dairy regions dairymen were operating at a loss, forced to accept less than the cost of production from the distributors, using up their savings, falling deeper into debt, and facing the loss of their farms (Golay 101). Farmers were forced to take in less than what they could sell their products for because many businesses couldnt afford the prices which hurt farming lifestyles and how they lived. The Great Depression was a monumental event that left its mark on the United States and left its mark on history. This event shows how hard it is for families and society itself to get back on its feet after everything is stripped away from them. It is hard to fathom how such devastation can occur all because people did not listen to warnings about the stock market; thus, causing it to crash which ensued panic and left a major blow in how the economy and American families functioned. History has always been something that has intrigued me because it is interesting to see how much different events can make an impact and how it affects different people. These small factors such as inflation and the stock market crashed was all a big catalyst in causing the Great Depression to occur which influenced how our history was shaped and how we remember the Great Depression today and its effects. We can see the impact on society and how it influenced history following the crash. We are also abl e to understand how this monumental event impacted lives economically and socially. The effects of the Great Depression were felt throughout and the detriment it caused was severe. As a historical event, the Great Depression left a better understanding in history of the economy and how to better prepare ourselves if something drastic like this was to happen again. As we know, this event impacted lives all over the United States from the wealthiest people to the farmers in rural areas. It left a lasting impact on the economy as well as families during this time which took several years to recover from and it is something that is still felt today.

Legalization of Marijuana for Medicinal Usage - 800 Words

Legalization of Marijuana for Medicinal Usage The legalization of marijuana for medical purposes is a question that seems to be scourging many states. Have you ever experience excruciating pain? Or have you ever witnessed someone suffering from agonizing morning sickness? Then still there are those that feel plagued with the chronic arthritis pain, or the nausea and vomiting, which often accompany chemotherapy. These individuals would welcome the use of marijuana for medicinal usage. Medical marijuana is related to the possession, use and cultivation of marijuana for medical purposes. Some people suffering from a terminal illness or extreme painful conditions have given favorable reports concerning the benefits from the use of†¦show more content†¦Physicians recognized marijuana for medicinal use as early as 1840. It appeared in the Nation’s official list of acceptable drug from 1850 through 1942 in the United States Pharmacopoeia. It was sold in small packages for the treatment of migraines, rheumatism, and insomnia. (Anslinger) However, today, many individuals are left to choose between feeling better and breaking the law. More than twenty states have legalized the use and/or cultivation of marijuana for medicinal use, thereby removing any criminal penalties from the doctor who prescribe the drug and the patients who use it within the bounds set by state laws. As with any drug, one of the biggest dilemmas in legalizing marijuana is the potential for abuse and addiction. For this reason, under the federal Controlled Substances Act, it is classified as a â€Å"Schedule I drug†. (Rosenthal) It lacks safety acceptance, and has no accepted medical use in treatment in the U.S. Medical marijuana laws are constantly changing. There are many people out there that fear persecution so much that they would refuse to use marijuana for medicinal purposes. (Neihouse) In 1996, California was the first to legalize medical marijuana. Alaska, Connecticut, Hawaii, Maine, Massachu setts, and Nevada are among other states that have legalized marijuana for medical use. Colorado and Washington legalized marijuana for adults in 2012. However, there are certain boundaries that are required. For instance states mayShow MoreRelatedMarijuana as Medical Treatment917 Words   |  4 Pages Marijuana as medical treatment Should marijuana become legal in our country as a prescription and clinical drug for medicinal treatment? Imagine somebody that you love lying in bed at a hospital and having just undergone chemotherapy for their cancer treatment; Side effects of chemotherapy like constantly vomiting, fatigue and pain are difficult to tolerate every day. Doctor can prescribe medication, but any of it has absolutely no effectRead MoreIs Cannabis Dangerous? This Particular Issue Has Been Discussed,1291 Words   |  6 Pagessociety. Many individuals have their own opinions on marijuana, whether it be positive or negative, but an objective perspective is necessary to justly weigh the benefits and detriments of marijuana use and legalization. When an unbiased person analyzes the controversial topic of cannabis, he or she would realize that the substance does not plainly fall into a single category. There is ample, scientific proof that marijuana has numerous medicinal purposes, such as treating glaucom a and different seizureRead MoreEssay on Medicinal Marijuana: Miracle Drug Of the Future?1682 Words   |  7 PagesMedicinal Marijuana: Miracle Drug Of the Future? The many tales and legends surrounding the medical use of marijuana can be traced as far back to the ancient Chinese and Greek civilizations, who both believed that on top of its psychoactive capabilities, marijuana was effective in treating pain. Several thousand years later, Queen Victoria was urged by her doctor to take marijuana in order to relieve such pains as migraines or menstrual cramps. However, despite the many historicalRead MoreMarijuana Should Not Be Beneficial For Medical Purposes1080 Words   |  5 PagesMarijuana has proven to be beneficial for medical purposes. It has therapeutic effects that will ultimately allow patients with adverse health conditions to improve their quality of life. Legalizing marijuana can also improve the state of the United States’ economy through taxation and creation of job opportunities. Additionally, it can reduce the crime rate in the United States and save the United States tons of money. Contrarily, marijuana should not be legalized for recreational usage. ExtensiveRead MoreThe Risk Of Legalization Of Marijuana Essay722 Words   |  3 PagesThe risk of Legalization of Marijuana Marijuana, as we know, is a kind of drug. According to Thompson (2015), marijuana is not only one kind of drug, but also can be used as a medicinal material. The reason it can be a medicinal substance is that marijuana has a curative affect of relieving pain. Despite different states having a variety of regulations about the usage of marijuana, there is always one rule that is unified, which is the medicinal usage of marijuana must be approved by the FDA—theRead More Drugs and Alcohol Essay1599 Words   |  7 Pagesrecreational use. In the United States, marijuana has been and continues to be a very controversial drug. Some states have allowed marijuana consumption for medicinal purposes, while others have completely outlawed the drug. Those who are against the legalization and regulation of marijuana suggest the economical and health risk associated with consumption of the drug are too high. Although there is risk involved with the legalization of the marijuana, our cou ntry has already been risking tooRead MoreThe Legalization of Marijuana Essay966 Words   |  4 PagesIm for legalizing marijuana. Why pick on those drugs? Valium is legal. You just go to a doctor and get it and overdose on it - whats the difference? Prozac, all that stuff, so why not marijuana? Who cares? Its something that grows out of the ground - why not? Go smoke a head of cabbage. I dont care what you smoke (Stern). This particular quote is the reality of how many Americans actually feel about the supposed war on drugs. Mary jane, airplane, weed, reefer and dank are all commonly usedRead MoreShould Marijuana Be Legalized?1350 Words   |  6 Pagesin politics in the past decade would have to be the legalization of marijuana. The sale and production of marijuana have been legalized for medicinal uses in over twenty states and has been legalized for recreational uses in seven states. Despite the ongoing support for marijuana, it has yet to be fully legalized in the federal level due to cultural bias against â€Å"pot† smoking and the focus over its negative effects. However, legalizing marijuana has been proven to decrease the rate of incriminationRead MoreShould Marijuana Be Legalized?1232 Words   |  5 PagesIntroduction The possession, use, cultivation, transportation, and sale of marijuana are illegal under the federal law in the United States. However, the federal government announced that states are allowed to pass a law to legalize marijuana for medical and recreational use, provided that they develop a system to regulate the activities. Under the Controlled Substances Act, passed in 1970, Marijuana is classified as a substance of schedule 1, the highest listing under the legislation. The classificationRead MoreThe Regulation And Taxation Of Marijuana Act1618 Words   |  7 Pagessubmitted. Question four on the ballot was known as the â€Å"The Regulation and Taxation of Marijuana Act.† The numbers came in and beginning December 15, 2016 in Massachusetts, individuals above the age of twenty-one will now be able to legally purchase, possess, cultivate, and use marijuana, with limitations on quantity, for recreational and medicinal use under the statutes of the state laws. While the prohib ition of marijuana in Massachusetts has ended, many new movements must now begin to maintain, regulate

Eth316 Community Profile Paper - 1362 Words

Community Profile Presentation The City of Kelsey is an environment friendly and diverse community with residents from different ethnicities and backgrounds. The City Kelsey where most people regardless of the entry-level position have an opportunity to find a job. One of the largest employers is Smith System consulting, followed by Huffman trucking company own and managed by family members. This community has a diverse population of professionals on different fields such as consulting, transportation, organic farming, and construction. The City of Kelsey also offers their citizens many activities like; annual ballroom, festivals, monthly famer’s market, annual St. Patrick’s Day parade, craft fair, memorial day soft ball tournament, golf†¦show more content†¦If the visitors or the locals are feeling a little more adventurous they can take advantage of its beautiful scenery. Visitors can enjoy a day of boating, sailing, swimming, fishing or water skiing in Beautiful Lake Lora, which is locate d five miles west of the city or the Kelsey River which runs in the southern boundary of the city or catch a Ferry and cross the river to enjoy Baderman island, the Kelsey Aquatic Center provides residents with swimming lessons in its outdoor swimming pool in the summer and in the indoor pool year round. There is also the Kelsey Country Club with one of the most challenging courses in the region, there club members can take advantage of the golf course in the summer months and the club house year round. (Oswaldo) How would you describe the responsibilities of the individual to the community? (Daisy) Individuals of The Kelsey community carry a huge responsibility to preserve the land, as well as the ways of the community. It is very clear that this community is a small one, yet still, a strong and very productive one. The individuals of this community have learned to work and communicate with one another, in harmony, to survive and improve their way of life together. Initially, they survived on what they themselves grew; making sure that it was of quality. Throughout the years, as the community grew, by reproducing and evolving,

Financial Reporting Essay Example For Students

Financial Reporting Essay OnSeptember 28, 1998, Chairman of the U.S. Securities and Exchange CommissionArthur Levitt sounded the call to arms in the financial community. Levitt askedfor, immediate and coordinated action to assure credibility andtransparency of financial reporting. Levitts speech emphasized theimportance of clear financial reporting to those gathered at New YorkUniversity. Reporting which has bowed to the pressures and tricks of earningsmanagement. Levitt specifically addresses five of the most popular tricks usedby firms to smooth earnings. Secondly, Levitt outlines an eight part action planto recover the integrity of financial reporting in the U.S. market place. Whatare the basic objectives of financial reporting? Generally accepted accountingprinciples provide information that identifies, measures, and communicatesfinancial information about economic entities to reasonably knowledgeable users. We will write a custom essay on Financial Reporting specifically for you for only $16.38 $13.9/page Order now Information that is a source of decision making for a wide array of users, mostimportantly, by investors and creditors. Investors and creditors who areresponsible for effective allocation of capital in our economy. If financialreporting becomes obscure and indecipherable, society loses the benefits ofeffective capital allocation. Nothing illustrates the importance of transparentinformation better than the pre-1930s era of anything goes accounting. An erathat left a chasm of misinformation in the market. A chasm that was acontributing factor to the market collapse of 1929 and the years of economicdepression. An entire society suffered the repercussions of misinformation. Families, and retirees depend on the credibility of financial reporting fortheir futures and livelihoods. Levitt describes financial reporting as, a bondbetween the company and the investor which if damaged can have disastrous,long-lasting consequences. Once again, the bond is being tested. Tested by afinancial community fixated on consensus earnings estimates. The pressure toachieve consensus estimates has never been so intense. The market demandsconsistency and punishes those who come up short. Eric Benhamou, former CEO of3COM Corporation, learned this hard lesson over a few short weeks in 1996. Benhamou and shareholders lost $7 billion in market value when 3COM failed toachieve expectations. The pressures are a tangled web of expectations, andconflicts of interest which Levitt describes as almostself-perpetuating. With pressures mounting, the answer from U.S. managershas been earnings management with a mix of managed expectations. March of 1997Fortune magazine reported that for an unprecedented sixteen consecutivequarters, more SP 500 companies have beat the consensus earnings estimatethan missed them. The sign of a quickly growing economy and a measure of theimportance the market has placed on consensus earnings estimates. The singularemphasis on earnings growth by investors has opened the door to earningsmanagement solutions. Solutions that are further being reinforced to managers bymarket forces and compensation plans. Primarily, managers jobs depend on theirability to build stockholder equity, and ever more importantly their owncompensation. A growing number of CEOs are recieving greater percentages oftheir compensation as stock options. A very personal incentive for executiveachievement of consensus earnings estimates. Companies are not the only ones tofeel the squeeze. Analysts are being pressured by large institutional investorsand companies seeking to manage expectations. Everyone is seeking the win. Auditors are being accused of being out to lunch, with the clients. Manyaccounting firms are coming under scrutiny as some of their clients are beinginvestigated by the SEC for irregularities in their practice of accounting. Cendant and Sunbeam both left accounting giant Arthur Anderson holding a bigolbag full of unreported accounting irregularities. Auditors from BDO Seidmanaddressed issues of GAAP with Thing New Ideas company. The Changes were made andBDO was replace for no specific reason. Herb Greenberg calls the episode,A reminder that the company being audited also pays the auditorsbill. The Kind of conflict of interests that leads us to question the ideaof how independent the auditors are. All of these pressures allow questionableaccounting practices to obfuscate the reporting process. Generally acceptedaccounting principles are intended to be a guide, not a procedure. They havebeen developed with intended flexibility so as not to hinder the advancement ofnew and innovative business practice. Flexibility that has left plenty of roomfor companies to stretch the boundaries of GAAP. Levitt focuss on five of themost widespread techniques used to deliver added flexibility. BigBath restructuring charges , creative acquisition accounting, CookieJar reserves, Immaterial misapplications of accountingprinciples and the premature recognition of revenues. These practices do notspecifically violate the letter of the law, but are gimmicks thatignore the spirit and intentions of GAAP. Gimmicks, according to Levitt, thatare an erosion in the quality of earnings and therefore the quality offinancial reporting. No longer is this just a problem perceived in smallcorporations struggling for recognition. Throughout the financial community,companies big and small are using these tools to smooth earnings and maximizemarket capitalization. The Big Bath restructuring charge is thewiping away of years of future expenses and charging them in the current period. .u3a4353c4f06ff90ed33401256a3e52cb , .u3a4353c4f06ff90ed33401256a3e52cb .postImageUrl , .u3a4353c4f06ff90ed33401256a3e52cb .centered-text-area { min-height: 80px; position: relative; } .u3a4353c4f06ff90ed33401256a3e52cb , .u3a4353c4f06ff90ed33401256a3e52cb:hover , .u3a4353c4f06ff90ed33401256a3e52cb:visited , .u3a4353c4f06ff90ed33401256a3e52cb:active { border:0!important; } .u3a4353c4f06ff90ed33401256a3e52cb .clearfix:after { content: ""; display: table; clear: both; } .u3a4353c4f06ff90ed33401256a3e52cb { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u3a4353c4f06ff90ed33401256a3e52cb:active , .u3a4353c4f06ff90ed33401256a3e52cb:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u3a4353c4f06ff90ed33401256a3e52cb .centered-text-area { width: 100%; position: relative ; } .u3a4353c4f06ff90ed33401256a3e52cb .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u3a4353c4f06ff90ed33401256a3e52cb .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u3a4353c4f06ff90ed33401256a3e52cb .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u3a4353c4f06ff90ed33401256a3e52cb:hover .ctaButton { background-color: #34495E!important; } .u3a4353c4f06ff90ed33401256a3e52cb .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u3a4353c4f06ff90ed33401256a3e52cb .u3a4353c4f06ff90ed33401256a3e52cb-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u3a4353c4f06ff90ed33401256a3e52cb:after { content: ""; display: block; clear: both; } READ: My healthy lifestyle EssayA practice that paves the way to easy future earnings growth by allowing futureexpenses to be absorbed by restructuring liabilities. Large one time chargesthat will be ignored by analysts and the financial community through a littleconvincing and notation. In note fifteen of the Coca-Cola companys 1998annual report shows seven nonrecurring items from the past three years. Fours ofthese charges are restructuring charges, most significantly in 1996 in thisnote. In 1996, we recorded provisions of approximately $276 million in selling,administrative and general expenses related to our plans for strengthening ourworld wide system. Of this $276 million, approximately $130 million related tostreamlining our operations, primarily in Greater Europe and Latin America. These one time write-offs become virtually insignificant footnotes to thefinancial reporting process. Extraordinary charges that are becoming unusuallycommon. Kodak has taken six extraordinary charges since 1991 and Coca-Cola hastaken four in two years. The financial community has to wonder howunusual these charges are. Creative acquisition accounting is whatLevitt calls Merger Magic. With the increasing number of mergers inthe 90s, companies have created another one time charge to avoid futureearnings drags. The in-process research and development chargeallows companies to minimize the premium paid on the acquisition of a company. Apremium that would otherwise be capitalized as goodwill: and depreciatedover a number of years. Depreciation expenses that have an impact on futureearnings. This one time charge allowed WorldCom to minimize the capitalizationof goodwill and avoid $100 million a year in depreciation expensesfor many years. A charge hiding in this complex note on WorldComs 1996 annualfinancial statement. (1) Results for 1996 include a $2.14 billion charge forin-process research and development related to the MFS merger. The charge isbased upon a valuation analysis of the technologies of MFS worldwide informationsystem, the internet network expansion system of UUNET, and certain otheridentified research and development projects purchased in the MFS merger. Theexpense includes $1.6 billion associated with UUNET and $0.54 billion related toMFS. (2) Additionally, 1996 results include other after-tax charges of $121million for employee severance, employee compensation charges, alignmentcharges, and costs to exit unfavorable telecommunications contracts and $343.5million after-tax write-down of operating assets within the companys non-corebusinesses. On a pre-tax basis, these charges totaled $600.1 million. The dollaramounts are staggering and the future implications far reaching. Since thisapproach was introduced by IBM in 1995 these charges have become co mmonplace foracquisition accounting. A popularity, largely due to the level of room allowedin research and development estimations. The Third earnings manipulation tooldiscussed by Levitt is what he calls Miscellaneous Cookie JarReserves. The technique involves liability and other accrual accountsspecifically sensitive to accounting assumptions and estimates. These accountscan include sales returns, loan losses, warranty costs, allowance for doubtfulaccounts, expectations of goods to be returned and a host of others. Under theauspices of conservatism, these accounts can be used to store accruals of futureincome. Restructuring liabilities created by Big Bath charges alsoprovides these Cookie jar reserve effect. Jack Ciesielski, whomanages money and writes the Analysts Accounting Observer, calls theseaccounts the accounting equivalent of turning lead into gold a virtualhoneypot for making rainy-day adjustments. Various adjustments and entriesthat can produce almost any desired results in the pursuit of consistency. Thestatement of financial accounting concepts No. 2 (FASB, May 1980), definesmateriality as: The magnitude of an omission or misstatement ofaccounting information that, in light of surrounding circumstances, makes itprobable that the judgement of a reaonable person relying on the informationwould have been changed or influenced by the omission or misstatement. Todaysmanagement has started to ignore this fundamental principle. Materiality isbeing defined as a range of a few percentage points. Companies defend immaterialomissions by referring to percentage ceilings that draw a line on materiality. The amount falls under our ceiling and is therefore immaterial. Themateriality gimmick is one more method companies are using to stretch a nickelinto a dime. Simply put, In markets where missing an earnings projectionby a penny can result in a loss of millions of dollars in market capitalization,I have a hard time accepting that some of these so-called non-events simplydont matter, says Levitt. Finally, Levitt briefly touches on thecomplex issue of the manipulation occuring in revenue recognition. Moderncontracts, refunding, delaying of sales, up front and initiation fees all add tothe complications in some industries to follow specific rules of revenuerecognition. With plenty of holes in revenue recognition the door is open fortweaking. Microsoft is a good example of the problems facing todayscompanies. Concerned with proper revenue recognition, Microsoft started apractice in the software industry that allows companies to recognize revenueover a period of time. This recognition allo ws for better matching of revenuesto future expenses generated by the sale of the software. Expenses such asupgrades and technical support are related to the revenue generated by the saleof the software but are incurred at a later date. The complexities of modernbusiness transactions have left modern standards of accountancy years behind. .uaa8c71f0c7e93eacf7043563f9054df3 , .uaa8c71f0c7e93eacf7043563f9054df3 .postImageUrl , .uaa8c71f0c7e93eacf7043563f9054df3 .centered-text-area { min-height: 80px; position: relative; } .uaa8c71f0c7e93eacf7043563f9054df3 , .uaa8c71f0c7e93eacf7043563f9054df3:hover , .uaa8c71f0c7e93eacf7043563f9054df3:visited , .uaa8c71f0c7e93eacf7043563f9054df3:active { border:0!important; } .uaa8c71f0c7e93eacf7043563f9054df3 .clearfix:after { content: ""; display: table; clear: both; } .uaa8c71f0c7e93eacf7043563f9054df3 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uaa8c71f0c7e93eacf7043563f9054df3:active , .uaa8c71f0c7e93eacf7043563f9054df3:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uaa8c71f0c7e93eacf7043563f9054df3 .centered-text-area { width: 100%; position: relative ; } .uaa8c71f0c7e93eacf7043563f9054df3 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uaa8c71f0c7e93eacf7043563f9054df3 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uaa8c71f0c7e93eacf7043563f9054df3 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uaa8c71f0c7e93eacf7043563f9054df3:hover .ctaButton { background-color: #34495E!important; } .uaa8c71f0c7e93eacf7043563f9054df3 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uaa8c71f0c7e93eacf7043563f9054df3 .uaa8c71f0c7e93eacf7043563f9054df3-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uaa8c71f0c7e93eacf7043563f9054df3:after { content: ""; display: block; clear: both; } READ: The Absent Male In Little Women EssayGimmicks, that all must be addressed by the financial community. The task ofreturning integrity to U.S. financial reporting is of paramount importance. Theinterests of our financial system are at stake. Arthur Levitt and the SECstand ready to take appropriate action if that interest is not protected. But, a private sector response that obviates the need for public sectordictates seems the wisest choice. A nine part plan that involves theentire financial community is proposed by Levitt. Levitt has made it very clearthat the SEC is prepared to start forcing change. A line Levitt hopes will notbe necessary to cross. The SEC will begin to issue guidance on a wide array ofissues concerning the credibility and transparency of financial reporting. Guidance that must be acted on to Obviate the need for large scaleSEC involvement. The SEC will also act more proactively in two of itstraditional roles of information regulation and enforcement. First, the SEC willbegin requiring companies to provide additional disclosure details on changes inaccounting assumptions. Supplemental beginning and ending balances andadjustments of sensitive restructuring liabilities and other loss accruals willalso be required. Secondly, the SEC is unleashing the dogs on companies usingany practices that appear to be managing earnings. The gauntlet has been thrown,and it is up to the financial community to accept the challenge. FASB and otherstandard setting bodies have fallen behind a rapidly changing and evolvingeconomic environment. FASB and the AICPA are being coercively encouraged toclean up auditing and disclosure practices. The pressure is on and standardsetting bodies are scrambling to close the holes in GAAP. FASB has establishedcommittees to in vestigate a number of concerns and is diligently working towardsolutions that obviate. Auditors and the public accounting industryreceived a good scolding from Levitt. Glaring failures in the auditing processat Sunbeam, Waste Management Inc., and Cendant have put the whole industry atrisk of public solutions. The auditors have failed to be the watchdog of investors. It is time to clean up your industry. Criticism by theentire financial community has questioned the auditors, qualifications, methodsand their ability to police themselves. Finally Levitt challenges corporatemanagement, and investors to begin a cultural change. Change that resists thepressures to follow the leader in accounting chicanery. Investors are encouragedto set financial standards of integrity and transparency and punish those whodepend on illusion and deception. American markets enjoy the confidence ofthe world. How many half-truths, and how much sleight-of-hand, will it take totarnish that faith? With the shift away form company run pension planseveryone has become their own personal financial planners. What hangs in thebalance is the future of us all. BibliographyLevitt, Arthur. Quality Information: The Lifeblood of OurMarkets. Speech, 18 Oct. 1999. Fox, Justin, Searching for Nonfictionin Financial Statements, Fortune 23 Dec. 1996. Adams, Jane B. Remarks. Speech, 9 Dec. 1998. Ciesielski, Jack, More SecondGuessing. Barrons. Johnson, Norman S. Recent Developments at theSEC. Speech. 20 August 1999. Fox, Justin. Learning to Play theEarnings Game (And Wallstreet will Love You). Fortune 31 Mar. 1997Greenberg, Herb, The Auditors are Always Last to Know, FortuneInvestor 17 Aug. 1998. Melcher, Richard, Where are the Accountants.Business Week 5 Oct. 1998. Melcher, Richard and Sparks, Debra EarningsHocus Pocus Business Week 5 Oct. 1998. Bartlett, Sarah, CorporateEarnings: Who Can You Trust Business Week 5 Oct. 1998. Turner, Lynn E. Continuing High Traditions Speech, 5 Nov. 1998. Turner, Lynn E. Remarks Speech, 10 Feb. 1999. Aeppel, Timothy EatonsEarnings Increase but Miss Analysts Forecasts 20 Oct. 1999. Tran, KhanhExcite At Home Posts Quarterly Loss Due to Charges but MeetsEstimates 20 Oct. 1999. Bank, David Microsoft Earnings ExceedExpectations 20 Oct. 1999.