Auditing - report on the audit of Perfect Pies Lmt Essay

Evaluating - report on the review of Perfect Pies Lmt - Essay Example The company’s saves have likewise expanded during the current monetary year which shows that its financial specialists are thinking about the organization rewarding and are wanting to have a drawn out relationship with it. The company’s current proportion is additionally especially steady and presents the way that the organization is using its assets judiciously. We have been named as the legal examiner of the organization, for the money related year finished March 31, 2012, so as to communicate a feeling whether the fiscal report of the organization are liberated from any misquote and speak to a valid and reasonable perspective on the issues of the organization. By breaking down the money related execution of the organization in the earlier year, and considering the benefit base, the organization has been named SME (little and medium estimated substance). The review philosophy, chance inclusion and materiality have all been thought of and formulated which are significa nt for the review of a SME. The materiality has been determined by averaging out the benefit of the current year and earlier year and applying a hair style of 5% which is reasonable for SMEs. After the fruition of the interval review, no such occasion was recognized which could scrutinize that the budget reports of the organization are tangibly misquoted. ... Because of wild conditions, fitting trial of subtleties couldn't be performed on the end stock equalization, though, the aftereffect of the trial of subtleties on indebted person balance has likewise featured hardly any ill defined situations. Certain inconsistency has additionally been seen in the conveying estimation of the non-current resources. Stocks The period from December to May is the bustling season, during which our set number of staff attempts to cook a differing and complex cluster of customer, it becomes troublesome here and there to give adequate number of individual in a review group to do the review as arranged. Because of the referenced issue, the stock check of Perfect Pies Limited at its Wolverhampton site couldn't be performed. Review system in such circumstance was just shortened to management’s enquiry and setting dependence on the customer gave plan. During the visit to the Wolverhampton site, the review group obtained the point by point report of the s tock from the stock guardian and accommodated the absolute parity as of the report with the conveying estimation of the stock as announced in the fiscal summary. The recently referenced review strategy is very fruitful to gain comfort over the culmination and valuation of the stock parity. According to the material budgetary revealing structure, stock parity is esteemed at the lower of cost or net feasible worth. Without really evaluating the state of being of the stock it is absurd to expect to distinguish he stock thing over which the NRV testing ought to be performed. There’s likewise a possibility that the stock thing referenced in the stock rundown probably won't be available by any stretch of the imagination, in this way it is imperative to consider the stock either ‘tag to floor’ or ‘floor to tag’. Since the entirety of the above strategy could

Cultural Conservation Essay Research Paper One problem free essay sample

Social Conservation Essay, Research Paper One occupation with social protection: To set it simply, and its non an employments that only preservationists actually much of the time jumble ( or mix moralss and feel. When Gertrude Himmererfarf attacks out ( as she sees it ) # 8216 ; flippant, # 8217 ; explicitly freak # 8217 ; and # 8216 ; polymorpously unreasonable # 8217 ; human advancement she is predominantly responding to something that she finds socially outside and tastefully compromising. I concur with her that qualities are generally something to be thankful for, however simply when they are Conceived of a moral and matter-of-reality position, non a tasteful 1. The conservativists need an obviously precise and compartment society wherein stable visual viewpoints are kept up and antediluvian social firsts are clung to sacredly. I experienced childhood in a vast expanse of social firsts. I grew up with white business networks making a trip to office buildings while their wedded womans remained at place and their childs went to class. or then again, more precisely, I grew up with alcoholic, extramarital concern work powers who lives socially separate lives while their wedded womans took depressants and smoked final resting place nails and vented their annihilations on there childs, and these equivalent childs took reams of medications, got premature births, drove rummy, and misled the mats. I experienced childhood in what most conservativists would see an Utopia ; tonss of cash, renown, social intelligence, and great preservationist esteems. Be that as it may, their qualities were in truth feel, and keeping these style administered and demolished their lives. Nearly everybody in this rural working class framework detested their lives, but since they had been raised to adore stylish fantasies they felt that to request them was an induction of individual disappointment. What are these fantasies? they # 8217 ; re old and bromidic however I # 8217 ; ll run on them again: that # 8217 ; s cash fulfills you, that society is correct and that poverty is awful, that keeping show in each feature of your life is a definitive decent, that abnormality from these contemplations is sin. ECT. I # 8217 ; m non heading out to express that the polar antonyms of the clich # 233 ; s is valid, that would be one of the weaknesss of the fanatic left. I accept that for the most segment these gauges are superfluous. Cash can do life simpler, however it other than can do life languishing. Neediness can be terrible however it can other than be good. Show has some valid statements and some awful focuses . All that matters is flexibleness that should let for the prosperity of the single without trading off the privileges of different people. At the point when conservativists mention their reiteration of indecencies homosexuality, singular parent family units, multiculturalism, ect. I # 8217 ; m consistently asking # 8216 ; why? # 8217 ; . On the off chance that individuals are cheerful being gay so whets off base with that? it might be a way of life that # 8217 ; s stylishly not the same as what we # 8217 ; ve been raised with, yet so what? furthermore, singular parent family units? better a cherishing singular parent family unit than a # 8216 ; customary family # 8217 ; wherein the guardians abhor one another and the male parent is a riffraff rouser. One ground that we have such a wide collection of substitute ways of life is that the customary ways of life that the conservativists champion are much of the time rather defective and prohibitive. Prohibitive mores can be tremendous when applied to people groups savage inclinations, yet limitation is dreadfully undesirable when its used to obtain individuals to fit in with intervene cultural firsts. This limitation can do individuals experience inconsistent and mediocre and it should be done off with. On the off chance that individual # 8217 ; s gay, permit them be gay. On the off chance that your kid needs to get hitched a dark grown-up female ( or white or xanthous or Muslim ) so permit the, . We have to adore one another and back up each other regardless of whether we decide to populate in alternatives yet innocuous ways. Clearly if your kid is a raper or a wifebeater or a child molester so you have to oppugn your help of his activities and qualities. I # 8217 ; m non guarding a retreat for obligation. I accept that individual and cultural great being is based upon and establishment of troublesome work, genuineness, honestness, determination, respect, resilience, and other great # 8216 ; values. # 8217 ; But it doesn # 8217 ; t check what the social sign of the qualities resembles. It very well may be straight or gay or male or female or dark or white or anything each piece long as its deferential and causes the practician to feel great. So my encourage to social conservativists ( and others ) is develop an assault to values dependent on rules rather than style. I would other than wish to state that any proclamations on the estimations of others, especially declarations turning into the pre-scriptive realm, should be mindful, self evident actuality, legitimate and non just the commonly disdainful and traditionalist vacuums that we # 8217 ; ve become so used to.

Gullivers Travels :: essays research papers

Gulliver’s Travels      In the novel, Gulliver’s Travels, Jonathan Swift tends to numerous things amiss with the general public around him. His depiction of English society shows the amount he saw fiendish in it. He fundamentally tended to five issues all through his book: war, government and politics,economy, society, and humanity all in all.      The Lilliputians reveal the idiocracy of war in our general public. The Little-Ender and Big-Ender war all began the discussion of what direction to break an egg. It didn’t matter that the whole explanation of the war was strange - nobody realized that reason. They just battled on the grounds that they realized that they battled quite a while in the past, and speculated that it ought to have been for a valid justification.      Gulliver himself even indicated the foolishness of war when he clarified the reasons England would battle to Mistress or the Queen of Brobdingnag. His defenses to battle were just on the grounds that the foe was more vulnerable and they needed more land. This shows Swift’s compassion toward Ireland around then.      Swift accepted that legislative issues and government were games. The “election'; of “leaping and crawling'; of the Lilliputians was the premise of picking their administration authorities. The legislature was ran with individuals that could go under or bounce over a stick. The whole thought of classes and positions appeared to be moronic to Swift.      The island of Brobdingnag depicted Swift’s thought of an ideal society. Everybody was equivalent, and everybody got an equivalent offer. There were no assessments and everybody got a state in how to manage issues that emerged.      When Gulliver disclosed English society to the sovereign of Brobdingnag, she no longer respected the little man with amazement. She announced that the wrongdoings of his general public were lying and cheating, and the English were ghastly vermin. At the point when Gulliver chose to show the sovereign a miracle of his general public, he appeared to additionally estrange himself since he indicated her the damaging tendency of his reality.      Swift most likely realized that having information was power. Be that as it may, the illogical looking for of information was of no utilization to him. At the Academy, teachers would remain inside for quite a long time at once, letting nature outside go to squander. They would contemplate various approaches to perform basic errands and searched for answers to questions that hadn’t any. They didn't accept a thing of nature as God proposed it, rather they dismantled it and examined it.      Swift considered mankind to be detestable, as depicted in the life of the Houyhnhms and Yahoos.

A Biography of Geographer Ellen Churchill Semple

A Biography of Geographer Ellen Churchill Semple Ellen Churchill Semple will long be associated with her commitments to American geology regardless of her relationship with the since quite a while ago dismissed subject of natural determinism. Ellen Semple was conceived amidst the Civil War in Louisville, Kentucky on January 8, 1863. Her dad was a genuinely wealthy proprietor of a tool shop and her mom dealt with Ellen and her six (or conceivably four) kin. Ellens mother urged the youngsters to peruse and Ellen was particularly enchanted with books about history and travel. As a youngster, she appreciated horseback riding and tennis. Semple went to open and non-public schools in Louisville until she was sixteen when she took off to school in Poughkeepsie, New York. Semple went to Vassar College where she earned her lone rangers degree in history at nineteen years old. She was the class valedictorian, gave the beginning location, was one of thirty-nine female alumni, and was the most youthful alumni in 1882. Following Vassar, Semple came back to Louisville where she educated at the non-public school worked by her more established sister; she likewise got dynamic in nearby Louisville society. Neither instructing nor social commitment intrigued her enough, she wanted substantially more intelligent incitement. Luckily, she got an opportunity to get away from her weariness. To Europe In a 1887 excursion to London with her mom, Semple met an American man who had quite recently finished a Ph.D. at the University of Leipzig (Germany). The man, Duren Ward, informed Semple regarding a unique educator of topography at Leipzig named Friedrich Ratzel. Ward lent Semple a duplicate of Ratzels book, Anthropogeographie, which she drenched herself in for quite a long time and in this manner chose to concentrate under Ratzel at Leipzig. She got back to complete work on a bosses degree by composing a proposition titled Slavery: A Study in Sociology and by examining human science, financial matters, and history. She earned her lords degree in 1891 and hurried to Leipzig to concentrate under Ratzel. She got facilities with a nearby German family so as to improve her capacities in the German language. In 1891, ladies were not permitted to be taken a crack at German colleges in spite of the fact that by exceptional authorization they could be permitted to go to talks and courses. Semple met Ratzel and got authorization to go to his courses. She needed to sit separated from the men in the study hall so in her top notch, she sat in the first column alone among 500 men. She stayed at the University of Leipzeg through 1892 and afterward returned again in 1895 for extra investigation under Ratzel. Since she was unable to enlist at the college, she never earned a degree from her examinations under Ratzel and along these lines, never really acquired a propelled degree in topography. In spite of the fact that she Semple was notable in the geology circles of Germany, she was moderately obscure in American topography. After coming back to the United States, she started to examine, compose, and distribute articles and started to increase a name for herself in American geology. Her 1897 article in the Journal of School Geography, The Influence of the Appalachian Barrier upon Colonial History was her first scholastic distribution. In this article, she indicated that anthropological research could for sure be concentrated in the field. Turning into an American Geographer What set up Semple as a genuine geographer was her remarkable field work and examination into the individuals of the Kentucky good countries. For longer than a year, Semple investigated the mountains of her home state and found specialty networks that had not changed much since they were first settled. The English verbally expressed in a portion of these networks despite everything conveyed a British pronunciation. This work was distributed in 1901 in the article The Anglo-Saxons of the Kentucky Mountains, a Study in Antropogeography in the Geographical Journal. Semples composing style was a scholarly one and she was an entrancing instructor, which energized enthusiasm for her work. In 1933, Semple follower Charles C. Colby expounded on the effect of Semples Kentucky article, Probably this short article has terminated more American understudies to enthusiasm for topography than some other article at any point composed. There was a solid enthusiasm for Ratzels thoughts in America so Ratzel urged Semple to make his thoughts known to the English-talking world. He asked that she interpret his distributions however Semple didn't concur with Ratzels thought of the natural state so she chose to distribute her own book dependent on his thoughts. American History and Its Geographic Conditions was distributed in 1903. It increased wide recognition was as yet required perusing in numerous topography offices over the United States during the 1930s. Keep on paging Two Her Career Takes Off The distribution of her first book propelled Semples vocation. In 1904, she got one of the forty-eight sanction individuals from the Association of American Geographers, under the administration of William Morris Davis. That equivalent year she was named Associate Editor of the Journal of Geography, a position she held until 1910. In 1906, she was enlisted by the countrys first Department of Geography, at the University of Chicago. (The Department of Geography at the University of Chicago was built up in 1903.) She stayed associated with the University of Chicago until 1924 and instructed there in rotating years. Semples second significant book was distributed in 1911. Impacts of Geographic Environment further elucidated Semples natural deterministic perspective. She felt that atmosphere and geographic area was the significant reason for a people activities. In the book, she listed endless guides to demonstrate her point. For instance, she detailed that the individuals who live in mountain passes are generally looters. She gave contextual investigations to demonstrate her point however she didnt incorporate or examine counter models that could refute her hypothesis. Semple was a scholarly of her time and keeping in mind that her thoughts can be viewed as bigot or exceedingly straightforward today, she opened up new fields of thought inside the control of topography. Later geographic idea dismissed the basic circumstances and logical results of Semples day. That equivalent year, Semple and a couple of companions traveled to Asia and visited Japan (for a quarter of a year), China, the Philippines, Indonesia, and India. The excursion gave an enormous measure of grain for extra articles and introductions throughout the following barely any years. In 1915, Semple built up her energy for the geology of the Mediterranean locale and invested a lot of her time examining and expounding on this bit of the world for an incredible rest. In 1912, she showed geology at Oxford University and was a speaker at Wellesley College, the University of Colorado, Western Kentucky University, and UCLA through the span of the following two decades. During World War I, Semple reacted to the war exertion as did most geographers by offering talks to officials about the topography of the Italian front. After the war, she proceeded with her educating. In 1921, Semple was chosen President of the Association of American Geographers and acknowledged a situation as a Professor of Anthropogeography at Clark University, a position she held until her demise. At Clark, she instructed courses to graduate understudies in the fall semester and spent the spring semester inquiring about and composing. All through her scholastic profession, she arrived at the midpoint of one significant paper or book every year. Sometime down the road The University of Kentucky regarded Semple in 1923 with a privileged doctorate qualification in law and set up the Ellen Churchill Semple Room to house her private library. Blasted with a cardiovascular failure in 1929, Semple started to capitulate to sick wellbeing. During this time she was taking a shot at her third significant book - about the geology of the Mediterranean. Following a protracted medical clinic remain, she had the option to move to a home nearby Clark University and with the assistance of an understudy, she distributed Geography of the Mediterranean Region in 1931. She moved from Worcester, Massachusetts (the area of Clark University) to the hotter atmosphere of Ashevlle, North Carolina in late 1931 trying to reestablish her wellbeing. Specialists there suggest a much milder atmosphere and lower height so after a month she moved to West Palm Beach, Florida. She kicked the bucket in West Palm Beach on May 8, 1932 and was covered at the Cave Hill Cemetery in her old neighborhood of Louisville, Kentucky. A couple of months after her passing, the Ellen C. Semple School was committed in Louisville, Kentucky. Semple School is still in presence today. The University of Kentucky Geography Department has an Ellen Churchill Semple Day each spring to respect the control of geology and its achievements. In spite of Carl Sauers attestation that Semple was an insignificant American mouthpiece for her German ace, Ellen Semple was a productive geographer who served the order well and prevailing in spite of huge obstructions for her sexual orientation in the corridors of the scholarly world. She unquestionably has the right to be perceived for her commitment to the progression of geology.

Midsummer Nights Dream Essays (715 words) - Fiction, Arts, Film

Midsummer Night's Dream Following a night of meandering through the forested areas, pursuing pixies, having different mixtures scoured over their eyes, falling all through adoration, and undermining each other's lives and appendages, the four admirers of A Midsummer Night's Dream wake up in the backwoods to the trumpeting of horns and end up encompassed by respectability. It's no big surprise they are confounded, and can't genuinely say . . . (IV.1.7) how they wound up where they are and what happened the prior night. Be that as it may, what they make certain about is the way they feel towards each other. Regardless of whether it's an affection that has blurred, developed over again or been there up and down, the four sweethearts have a conviction about who (m) they love that is as solid if not more grounded than it is at some other point in the play. Lysander is the first of the four lovers to respond to Theseus' wonderment at their circumstance. He concedes that I will answer amazedly,/Half rest, half waking. Be that as it may, up 'til now, I swear,/I can't genuinely say how I came here. (IV.1.145-7). In this portion, Lysander's tone is naturally somewhat stupefied and uncertain, and his reaction is covered with vulnerability. This tone of shock is likewise present in the musings of Demetrius, Helena, and Hermia. Methinks I see these things with separated eye,/When everything appears to be twofold (IV.1.188-9) shouts Hermia, and Helena concurs that So methinks.(IV.1.190). Demetrius is befuddled to such an extent that he thinks that its important to ask the others Are you certain that we are conscious? I can't help thinking/That yet we rest, we dream. (IV.1.192-4). The fundamental tone all through this 'waking scene' is one of anxiety and disarray among dreams and reality; however the main time the darlings express genuine vulner ability is while they are sifting through what coincidentally fronted of them including the Duke and his chasing party. Demetrius asks the others Do not you think/The Duke was here, and offered us tail him? (IV.1.194-5), and just reasons that Why, at that point, we are alert. (IV.1.197) in the wake of getting affirmation from the others. Be that as it may, this tone of vulnerability blurs when the four discussion about their actual loves. Demetrius concedes that I wot know by what power . . . (IV.1.163) that his affection for Hermia has Melted as the snow . . .(IV.1.165), yet he is certain that The article and the delight of mine eye,/is just Helena. (IV.1.169-70). Lysander and Hermia don't allude to their affection as whenever being in question - their disarray again just relates to what's going on directly; what Hermia sees as though out of center, with separated eye . . . (IV.1.188). While it would take an entire other paper to discuss whether Demetrius is extremely infatuated with Helena in his tranquilized state, she at any rate is persuaded of his adoration. In the forested areas, Helena was certain that Demetrius' promises of reverence were to disdain her, and even as he professed to adore her, she mourned Wherefore talks he this/To her he detests? (III.2.227-8). Be that as it may, the following morning, she respects his promises with less uncertainty, and rather mirrors that she has Found Demetrius, similar to a gem/Mine own and not mine own.(IV.1.190). She recognizes that Demetrius was lost to her own at a certain point, however more critically she presently realizes that he is found. Helena's new acknowledgment of Demetrius' adoration could be on the grounds that his pledges are considerably more concrete than they were in the forested areas. There Demetrius broadcasted his affection through cases of deference and excessive admiration; utilizing turn expre ssions of artists without genuine profundity, similar to when he stirs and all of a sudden pronounces Helena to be a goddess, fairy, great, divine . . . (III.2.137). Toward the beginning of the day his announcements convey a demeanor of more explanation, and spotlight not on void catchphrases of magnificence and enthusiasm. Rather, Demetrius announces more what he feels, saying Now I do wish [for Helena's love], love it, long for it,/And will for evermore be consistent with it.(IV.1.174-5). His sentiments of adoration are currently increasingly certain and sure, accordingly he can communicate them with language progressively concrete. Shakespeare Essays

Common App Essay Question Sample - Answers That Make Sense

Common App Essay Question Sample - Answers That Make SenseCommon App Essay Question 1 samples can help you come up with good, effective answers to the questions asked. When writing an App essay, it is vital that you follow directions as stated in the assignment and make your answers flow logically. Answers you give will be used as the basis for judging the merit of your work, thus, it is important that you know how to answer a few specific App essay question sample questions.In order to give answers that are compelling and usable, you should look for good, well-written answers to common App essay question. Answering correctly requires first knowing the purpose of the question and answering it carefully. If you feel unsure about the answer, you should reword it so that it makes sense. If you think it doesn't, then you need to rephrase it so that it makes sense.Most common App essay question samples ask students to answer about their experiences with a certain topic or subject matter. Students are assigned examples of various subjects, such as traveling abroad or seeing a movie in the theater. When answering these questions, you must write an essay of about 300 words that will be used as a basis for judging the merit of your work.Usually, the next part of the assignment asks you to provide five to seven responses that address the examples given in the assignment. Before completing the essay, you should read through the samples of App essay questions for ideas. You can also choose to compose a 'masterpiece' on the topics given in the samples, which can be the basis for your work.When composing a masterpiece, you should follow instructions as stated in the Common App Essay Question Sample so that your essay flow and makes sense. Here are some sample questions from the Common App Essay Question Sample A:As long as you follow the directions, your essay should go without a hitch. If you get stuck or have trouble writing an answer, you should refer back to the sample e ssay. Try to figure out what the samples asked about and work from there. Just be sure to rewrite it completely and make it fit with your topic.Students are often confused when they find App essay question samples that require answers on technical subjects such as physics, biology, and chemistry. These types of questions are easy to answer with simple words and sentences. Remember that, when you are working on a Common App Essay Question Sample, you are working on a very specific assignment and therefore, you should spend your time on writing properly and not on trying to add detail to your essays.The more specific you can be in your writing, the easier it will be to answer the questions on the samples. It is also important that you use the terms correctly so that you will not appear to be a spammer. Also, when you are typing your essay, remember to change the punctuation so that you will not make spelling mistakes while working on your essay.

Finance Essays - Management Company Stockholders - Free Essay Example

Management Company Stockholders 1.1 Introduction In business finance management, the main objective of a public-listed company is to maximise the market value of the company and the wealth of the stockholders. Traditionally, stockholders yield the power and authority to hire and fire management should the latter fail to produce high returns with calculated risks for the company. Theoretically, the Finance Manager should act in the best interest of the stockholders by taking appropriate actions that will maximise the stock prices, which is a conservation concept that differs in reality. This will be discussed in depth in this paper. 1.2 Agency Relationship Problems In a public-listed company, there is a demarcation between the ownership and management due to differing interests, resulting in the possibility of conflicts of interests between the stockholders and the management, usually termed as an agency problem. The stockholders or Principals will appoint the managers or Agents to run the business. This relationship is also known as the Agency Relationship, which give rise to the following problems: When a company becomes public listed, the owner is appointed as the Agent by the Stockholders. The separation of management and ownership of the company results in managers making decisions that are not in-sync with the stockholders objective of maximising their wealth. Managers incurring high expenses by exploiting the perquisites such as expensive office decoration, high remuneration, travelling in business class flights or usage of private jets, claiming high transportation and entertainment costs at the companys expense. This is clearly depicted by the ex-CEO, TT Durai of the National Kidney Foundation (NKF) where it was reported that his annual salary was $600,000 and had lavish personal spending using the monies that were donated to NKF. Managers may adopt an extreme risk aversion attitude and refrain from investing in high risks investments with high returns for fear of losing their job should the investment fail. On the other hand, if they make money, the money will not go into their pockets, instead it will be the stockholders that stand to gain. The managers may act in their own interests rather than those of the stockholders. With no turnover or re-appointment of the managers and executives over the years, powers have been monopolised and resulted in vested personal interest of their own. Hence, this will lead to the employment of friends into the management and employing personal audit teams. Using the example of NKF, TT Durai has held the appointment as CEO for a period, resulting in his over-usage of companys funds for his own personal usage, and collaborated with his friends in fake business deals. Lack of proper governance in the company, which results in manipulation of accounting documents and false reporting of financial issues. An example is another charity saga after the NKF scandal of Ren Ci Hospital and Medicare Centre, which involved the Chairman, a Buddhist monk, Ming Yi. Ming Yi had doctored the accounts books and provided false information to the auditors and the Commissioner of Charities. He was also found guilty in lending the hospitals monies to the Mandala Buddhist Cultural Centre whereby he has a share in it. Poor risk management practice. With the increased complexity of investment options, companies failed to identify and thus implement the appropriate risk management policies should any of their investment options fails. The recent bankruptcy of the Lehman Brothers and the near-bankruptcy of the American International Group (AIG) were good examples of poor risk management practice. If theses agency problems are not properly resolved, in time to come, dire consequences may follow that could lead to the bankruptcy of the company, as illustrated in the agency problems in China Aviation Oil Company (Singapore). 1.3 Agency Problems of China Aviation Oil 1.3.1 Brief Background China Aviation Oil (Singapore) Corporation Ltd (CAO) shocked the stock market with the losses amounting to US$550 million on 30th November 2004 from oil option trading. CAO is a China company that is based in Singapore with its core business in jet fuel. Agency Problems It was revealed during the investigation that CAO has several agency problems, which led to the downfall of the Company. The major problems are as listed as follows: Loss arose after CAO had placed wrong bets on oil price movements. Instead of recuperating from the losses, CAO aggravated the matter by doubling its bets and selling larger put options with longer expirations. CAOs former CEO and Chairman of the parent Company in China made their own decisions instead of adhering to the Companys rules in decision-making process. They collaborated and transferred funds from the parent company to salvage CAO when the put options were rendered worthless. Lack of transparency and proper accounting in that the stockholders were unaware of the situation. Lack of corporate governance and monitoring in the management level by the stockholders. 1.4 Counter-Measures The agency problems faced by CAO could have been avoided if the following counter-measures were adopted; Proper system of corporate governance authorised by the stockholders. From the on-start, the proper procedures prior to the trading of derivations of oil prices should be to seek approval from the stockholders. However, CAOs ex-CEO made his own decision to venture further, after making some profits by purchasing the put options that eventually led to the loss of US$550 millions. This is an obvious personal decision of the ex-CEO. To aggravate the grim situation, he collaborated with the Chairman of the parent company in China to purchase all the worthless put options in order to salvage CAO from collapsing. If proper governance system has been implemented such as imposing restrictions on the authority of the CEO, the situation would have been salvaged. The stockholders were unaware of the situation as there was a lack of transparency in the accounting reporting. The app ointment of a team of external auditors by the stockholders would have put this situation in place with frequent annual or impromptu accounts audits on the management. This would have prevented the forgery of account documents to cover the losses faced by the company. The ex-CEO, CAO was left to run the business without any interference or check-back systems initiated by the stockholders to safeguard their interest. A board of directors can be appointed to supervise the management performance and to ensure that any decisions made are in the best interest of the stockholders. This enables the stockholders to have a hold over the management to ensure that business is profitable and safe. A possible deterrence is to implement a reward and punishment system such as increasing the salaries, bonuses and providing stock options for performance and dismissal for non-performance. An annual review on the re-appointment of the CEO and the executives to prevent possible monopolisation of authority and forming of cliques within the management level. 1.5 Conclusion As clearly illustrated by the CAOs issue, agency problems have to be identified and resolved at the earliest time, if not, the companys stocks will fall and the stockholders will suffer a loss. Relevant counter-measures have to be implemented at all levels to prevent any abuse of authority, fraud and insider trading. 2.1 Introduction In business finance, there are several investment appraisal methods to assist in the determination whether an investment is profitable to partake. These methods include calculation of the Net Present Value (NPV), Average Accounting Return (AAR) and Internal Rate of Return (IRR) to assess the profitability returns of an investment and assessing the Discounted Payback Period to determine the shortest repayment period. Theses individual investment appraisal methods will be further elaborated in the following paragraphs. 2.2 Net Present Value Net Present Value (NPV) is the measure of how much value is added today by undertaking an investment. In simple terms, NPV of an investment is the difference between an investments market value and its cost as shown in the below example: Example 1: Adeline intends to invest in a new project with a start-up cost of $50, 000. The table below shows the cash flows for the new project. The desired rate of return for the investment is at 10% per annum. What is the NPV and advice for Adeline whether she should proceed to invest in the project? Year Project A Cash Flow ($) 1 10, 000 2 30, 000 3 40, 000 NPV for Project: n Cash Flow ($) Disc. F. = 1 / (1 + 0.1)n PV ($) 0 50, 000 1 50, 000 1 10, 000 0.909 9, 090 2 30, 000 0.826 24, 780 3 40, 000 0.751 30, 040 NPV at 10% = $13, 910 The project has a positive NPV, which is $13, 910. This means that the investment is returning more than the desired rate of return of 10% per annum. As such, Adeline should invest in the project. In the calculation of NPV, there are certain advantages and disadvantages as follows: Advantages: It provides a correct advice based on a perfect capital market situation and provides correct ranking for mutually exclusive projects. It gives an absolute value. It allows for time value of the cash flows. Disadvantages: It is very difficult in identifying the correct discount rate. NPV appraisal method requires the decision criteria to be specified before appraisal can be undertaken. In other words, if it is a positive NPV, the project will be accepted, whereas if it is a negative NPV, the project will be rejected. 2.3 Discounted Payback Method Discounted Payback Method determines the period in which initial investment is equal to the sum of the discounted cash flows. The rule states that an investment is acceptable if its discounted payback time is less than some pre-specified number of years as explained by using the same scenario in Example 1: n Cash Flow ($) Disc. F. = 1 / (1 + 0.1)n PV ($) Cumulative PV($) 1 10, 000 0.909 9, 090 9, 090 2 30, 000 0.826 24, 780 33, 870 3 40, 000 0.751 30, 040 63, 910 Initial investment cost is $50, 000. Amount remaining after 2 years = $50, 000 $33, 870 = $16, 130 Remaining year = $16, 130 / $30, 040 x 12 months = 6.4 months Therefore, the discounted payback time = 2 years 6.4 months The advantages and disadvantages in the Discounted Payback Method are as follows: Advantages It takes into account the time value of money. It is easy to understand. It does not accept negative NPV value. Disadvantages It may reject positive NPV investment. It requires an arbitrary cut-off point. It ignores cash flows beyond the cut-off date. It is biased against long-term projects or investment such as Research and Development projects or land-banking investment. 2.4 Average Accounting Return Average Accounting Return (AAR) is similar to NPV, in making capital budgeting decisions. AAR is based on the average accounting return; a project is acceptable if its AAR exceeds a target average accounting return as illustrated: Example 2: Zak set up a car grooming shop with the required investment of $300, 000. The shops lease will expire in 5 years time; the depreciation will be a straight line over the 5 years. Profit is taxed at 20%. The table below shows the revenue and expenses for the 5 years. An average accounting return of 15% per annum is intended. Should this project be accepted? 1st year 2nd year 3rd year 4th year 5th year Revenue($) 150, 000 200, 000 250, 000 180, 000 270, 000 Expenses($) 50, 000 100, 000 110, 000 70, 000 110, 000 Annual Depreciation = $300, 000 / 5 = $60, 000 1st year 2nd year 3rd year 4th year 5th year Revenue($) 150, 000 200, 000 250, 000 180, 000 270, 000 Expenses($) 50, 000 100, 000 110, 000 70, 000 110, 000 Earning before depreciation($) 100, 000 100, 000 140, 000 110, 000 160, 000 Depreciation($) 60, 000 60, 000 60, 000 60, 000 60, 000 Earning before tax($) 40, 000 40, 000 80, 000 50, 000 100, 000 Tax @ 20%($) 8, 000 8, 000 16, 000 10, 000 20, 000 Net Income($) 32, 000 32, 000 64, 000 40, 000 80, 000 Average Net Income = $(32, 000 + 32, 000 + 64, 000 + 40, 000 + 80, 000) / 5 = $248, 000 / 5 = $49, 600 Average book value of investment = $300, 000 / 2 = $150, 000 AAR = $49, 600 / $150, 000 x 100% = 33.07% Since the intended average accounting return is 15% per annum, this investment is considered more than acceptable. However, there are certain advantages and disadvantages whilst using the AAR as follows: Advantages: It is easy to understand and compute. The accounting information is easily available and hence, it is always possible to calculate AAR. Disadvantages AAR is not a true representation of investment as it failed to take into account the time value of money. It uses an arbitrary cut-off point and a benchmark to consider whether an investment is acceptable. It is based on the book value of the investment and not the cash flows and the market value of investment. 2.5 The Internal Rate of Return Internal Rate of Return or IRR is an important alternative to NPV in which a single rate of return for the investment is identified to summarise the merits of a project. IRR only depends on the cash flows and not the rate of interest offered by banks. Based on IRR rule, an investment is acceptable if the IRR exceeds the desired return, if not, it will be rejected. This is shown as follows: Example 3: The initial cost of investment of Project Runway is $10, 000. The cash flows are $3,500 in the first year, $5,000 in the second year and $4000 in the third year. Calculate the NPV at 10% and 20% and the IRR if a 15% return of investment is require. Should this project be taken up? n Cash Flows($) Disc. F. = 1 / (1 + 0.1)n PV($) Disc. F. = 1 / (1 + 0.15)n PV($) 0 10, 000 1 10, 000 1 10, 000 1 3500 0.909 3, 181.50 0.870 3, 045 2 5, 000 0.826 4, 130 0.756 3, 780 3 4, 000 0.751 3, 004 0.658 2, 632 315.50 543 IRR = 10 + (315.50) x (15 10) / 315.50 + 543 = 10 + (1577.5 / 858.5) = 10 + 1.838 = 11.84% Since the expected rate of return is 15%, the above project should not be undertaken. The following are the advantages and disadvantages of IRR: Advantages: It gives the results in terms of percentage in which management is familiar. It takes into account the cash flows and the time value of money. Disadvantages: Since the results are in percentage, it ignores the difference in project magnitude and hence, is unreliable when evaluating projects of great difference in size. IRR decision rule will break down for multiple IRR calculations. IRR cannot be depended on to provide correct advice for mutually exclusive investment decisions. References 1. Commercial Affairs Department 2007, Singapore, Case of China Aviation Oil, viewed on 10 Sep 08, lt;https://www.cad.gov.sg/serv/pro/cas/Case+of+China+Aviation+Oil.htmgt; 2. China Aviation Oil (Singapore) Corporation Ltd, 2005, China Aviation Oil (Singapore) Corporation Ltd announces findings of PricewaterhouseCoopers pursuant of its investigations, viewed on 10 Sep 08, lt;bankrupt.com/misc/ChinaAviationPWCReportAnnouncement.pdfgt; 3. Chong Chee Kean 2008, Ren Ci Probe Ten Charges Against Ming Yi, The Straits Times, viewed on 17 Sep 08, lt;https://www.straitstimes.com/Free/Story/STIStory_258042.htmlgt; 4. Kent, Bakar H, Powell, Gary E (2005), Understanding Financial Management A Practical Guide, Blackwell Publishing. 5. Malcolm Borthwick, 2005, Investors throw China Aviation a lifeline, BBC News viewed on 10 Sep 08, lt;https://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4074404.stmgt; 6. Seah Chiang Nee 2007, NKF Scandal Ripples widely felt, The Star viewed on 17 Sep 08, lt;https://www.littlespeck.com/content/politics/CTrendsPolitics-070113.htmgt; 7. Wayne Arnold, 2005, After crash, China Aviation Oil offers creditors sweeter repayment deal, International Herald Tribute, The Global Edition of the New York Times viewed on 10 Sep 08, lt; https://www.iht.com/articles/2005/05/12/business/chiav.phpgt;