Macbeth Literary Analysis

The Soliloquies of Macbeth Many times in a play, a character, usually alone on stage and pretending that the audience is not there, thinks out loud. This type of action is called a soliloquy: â€Å"An instance of talking to or conserving with oneself or of uttering one’s thoughts aloud without addressing any person† (Oxford English Dictionary).A remarkable author, William Shakespeare, uses the soliloquy technique in his famous playwright, The Tragedy of Macbeth. In this tragedy, many of Shakespeare’s soliloquies target around Macbeth, revealing important aspects about himself. The first soliloquy expresses Macbeth’s conscience, â€Å"indecision, and his fierce inner conflict† (Richard 383). He is dealing with the internal conflict of â€Å"pity and horror at killing the virtuous Duncan† (Jorgensen 8:90).In this soliloquy, Shakespeare defines Macbeth’s agonizing imagination: â€Å"Besides, this Duncan/ Hath born his faculties so meek, hath been/ So clear in his great office, that his virtues/ will plead like angels trumpet-tongued against/ The deep damnation of his taking-off;/ And pity, like a naked newborn babe,/ Striding the blast, or heaven’s cherubin horsed/ Upon the slightest couriers of the air,/ Shall blow the horrid deed in every eye,/ That tears shall drown the wind† (Shakespeare I:7:16-25).This best describes Macbeth as being directed into conflicts by prophesies of the three witches. Macbeth is a grief-stricken man with a wounded heart that is bleeding for someone else. The second soliloquy is found in the beginning of Act II, where Macbeth is seen alone with a â€Å"dagger† in his hand. Macbeth is giving into evil and the â€Å"terror in his soul and his inability to recover his lost innocence† (Richard 383) is revealed. He lets the illusion of the dagger affect him greatly by talking about satanic images of witchcraft.Shakespeare verbalizes the evil spirits as he goes on t o write: â€Å"†¦witchcraft celebrates/ Pale Hecate’s offerings, and withered murder,/ Alarmed by his sentinel, the wolf,/ Whose howl’s his watch, thus with his stealthy pace,/ With Tarquin’s ravishing strides, towards his design/ Moves like a ghost† (Shakespeare: II:2:51-56). Mabillard sums up the quoted soliloquy by documenting: â€Å"Hecate, the goddess of witchcraft and a strong presence in Macbeth, is preparing her acrificial victims, and Murder himself, called by his trustful watchman, the wolf, moves with the power and speed of evil king Tarquin near his prey† (Mabillard). The witchery turns Macbeth into an evil murderer. Lastly, there is another one of Shakespeare’s soliloquies that describes Macbeth. Jorgensen explains what is happening pertaining to this soliloquy: â€Å"Macbeth becomes king. But the ‘settled’ is deeply ironic, for he will be more driven in restless ecstasy to seek final security† (Jorgense n 8:91).This meditative kind of speech can be found in the beginning of Act III, where Macbeth specifies his own great loss: â€Å"For Banquo’s issue have I filed any mind;/ For them the gracious Duncan have I murdered;/ Put rancors in the vessel of my own peace/ Only for them, and mine eternal jewel/ Given to the common enemy of man,/ To make them kings, the seeds of Banquo kings! † (Shakespeare III:1:65-70). The killings lead Macbeth into â€Å"being accommodated to his murderous career† (Richard 383).Richard Sime also states that: â€Å"This suffering Macbeth is experiencing describes the person Macbeth has become† (Richard 383). At this point, the evil in Macbeth has definitely outweighed the good. Without Shakespeare’s choice of technique, the audience will not fully understand what Macbeth does to become who he is. The reader can see how Macbeth’s character changes throughout the period of time by seeing and hearing the feelings reveal ed by the use of soliloquies. Therefore, in Macbeth, â€Å"the inner spiritual catastrophe parallels the outer physical catastrophe† (Richard 383).

Motivational Methods Paper Essay

Every manager in an organization must develop the necessary skill of motivation, and apply it to their staff in order to work more efficiently. This ability is a key role for each department and it is of utmost importance that it be applied in a manner that is both beneficial to the organization and staff as well. Each staff member has a role to play in accomplishing goals and it is the duty of the managers to facilitate and motivate their staff. This paper will address three motivational methods to motivate staff for upcoming changes for the organization. Motivation can be defined as: â€Å"Forces within individuals that account for the level, direction, and persistence of effort they expend at work.† (Lombardi, Schermerhorn, 2007). Individuals who possess a strong work ethic and integrity will put 110 percent into their job, those who do not will do just enough to slide by and stay under the radar. Managers must motivate and inspire staff to continue to give that 110 percent while receiving acknowledgment and respect. In other words; â€Å"Motivation is getting people to do what you want them to do because THEY WANT to do it. The challenge is to give them a reason to want to do it because doing it will satisfy a need they have. You have to tune in to their needs, motives and reasons, not yours.† (Saleem, 2007). Upon learning that upper management is going to implement changes within the organization a manager is tasked with identifying what makes their staff motivated, what makes them perform at peak levels? What does the staff need? â€Å"Needs are unfulfilled physiological or psychological desires of an individual†. (Lombardi, Schermerhorn, 2007). Each individual will have different needs; however it is possible to identify what the team needs by simply asking them. One may think that by developing a list of needs and instructing each member to put them in order of priority it is possible to get an accurate picture of where  to start with the team and how to introduce the up-coming changes in a manner that will motivate the team to accept these in a positive and professional manner. Howev er, â€Å"A study, published in 1999 by Kenneth Kovach of George Mason University, compared associates’ ranking of what they wanted from their jobs with what their bosses thought was important to the associates. The results of the study were somewhat surprising. At the top of the associates’ list was interesting work, followed by appreciation of work, a feeling of being â€Å"in on things†, job security, and good wages. Employers thought good wages, job security, promotion/growth, good working conditions, and interesting work were most important to their staff.† (Bessel, 2012). The key here is to listen to the responses from the staff when asked what is important to them, and then we can identify their motivation. One motivation theory is the Two-Factor Theory, developed by Frederick Herzberg, (Lombardi, Schermerhorn, 2007), which identified that what really made the 4,000 respondents he questioned, enjoy their jobs were factors which related to the job itself, he labeled this satisfier factors. These are items such as feeling pride and a sense of achievement, recognition, and room for advancement. As it turned out, things relating to the setting of the job were what they enjoyed least about the job, he labeled this hygie ne factors. These are items such as work environment and conditions, interpersonal relations, policies, quality of supervision, and salary. These negative factors can be remedied with improving policies to enable staff to feel more satisfied in their environment, such as adding soothing environmental sounds, music, or providing chair message for example can help create a less chaotic work environment and positive hygiene factors. However, in using this method it is also important to be conscious that the two-factor theory is a complementary theory, improving the hygiene is also along with improving the satisfier factors as well. Common sense means that one follows with the other, recognition must also come along with environmental motivation. A second motivation theory is Acquired Needs Theory, from David McClelland, which is based on the needs of individuals. He identified three needs; first, the need for achievement as a desire to go above and beyond the norm of what is expected. Then second is the need for power, which could include control over others, or to be able to provide influence and responsibility over them. The third is the need for affiliation which  is a desire to have friendly and warm friendships with others. (Lombardi, Schermerhorn, 2007). These are all needs that people acquire over time of life experiences and a savvy manager will create a work place that is responsive to these needs. The manager must allow these staff members to takes risks and challenges and encourage their ability to work with little supervision. Delegating higher responsibilities to these individuals creates security for the team and enables the manager to respond to other concerns that normally they may not be able to give the proper attention to. The third method of motivation is motivating through job design. Utilizing the two previous methods of motivation based on the needs of staff, a manager can then create jobs by assigning the required tasks to those individuals who are appropriate to accomplish job performance and job satisfaction for themselves as well as the organization. To make the future changes the organization is anticipating it is essential that the managers utilize their skills to â€Å"tailor job design† (Lombardi, Schermerhorn, 2007), to fit the strengths of staff with their own specific qualities and needs, this includes four specific areas, one, job simplification: identifying work processes and tasks for staff to work in clearly defined and specialized tasks. Managers can utilize lesser skilled staff to perform duties of lesser complexity, allowing others with higher skill levels to focus on areas of greater need. Job rotation allows the manager to create flexibility and understanding of other areas, creating a better relationship and moral between departments. Job enlargement integrates or combines tasks previously done by separate workers, this is an option that a manager should do with caution because it could have an opposite reaction to the motivation they are trying to create. The final alternative in job design is job enrichment which is essentially delegating some of the responsibilities of the manager to another individual creating a broader scope to their current position and allowing the manager to take on other responsibilities they may have had a hard time giving the appropriate time to. By focusing on these three types of motivational methods I intend to accomplish introducing the staff and motivating them into the future of the organization while taking into consideration their needs and skill levels to better serve them and the organization. Through personal experience, being motivated to provide superior service and customer satisfaction in the health care  industry, individuals who are appreciated, recognized, and offered more responsibility will work hard to meet deadlines and provide excellent patient care. This is a win-win situation for any health care organization and management team. References: Bessel, I. (2012). Understanding Motivation: An Effective Tool for Managers. Retrieved from http://edis.ifas.ufl.edu/hr017 Kovach, Kenneth. (1999). Employee motivation: Addressing a crucial factor in your organization’s performance. Human Resource Development. Ann Arbor, MI: University of Michigan Press. Lombardi, D.M., & Schermerhorn, J.R. (2007). Health care management: Tools and techniques for managing in a health care environment. Hoboken, NJ: John Wiley & Sons. Saleem, H. (2007). Motivating your staff. Retrieved from http://www.dirjournal.com/guides/motivating-your-staff/

A Little History Essay

In a government sponsored website one can find the following information regarding the ancestry of most Taiwanese: Archaeologists have found evidence of prehistoric human habitation in Taiwan that dates back 12,000 to 15,000 years, and suggests that the earliest ancestors of Taiwan’s present inhabitants came from at least two places: southern China and Austronesia. Early settlers from southern China settled in northern and central Taiwan†¦ (see Taiwan website). Aside from its proximity to China this historical trivia provides an explanation why Taiwan is very similar to China. This also explains the influence of Chinese culture that is so evident in the whole of Taiwan culture. Food is the closest thing to culture and since Taiwan is closely related to Mainland China in terms of culture, there is also a significant similarity in the way food is prepared. This is a factor to consider for any expatriate coming in to work. If the expatriate is used to eating Chinese food then there is no problem adjusting to the culinary preference of the Taiwanese people. The Economy In the CIA World Factbook a bright outlook is seen with regards to business opportunities, â€Å"Taiwan has a dynamic capitalist economy with gradually decreasing guidance of investment and foreign trade by government authorities [†¦] Exports have provided the primary impetus for industrialization. The trade surplus is substantial, and foreign reserves are the world’s third largest [†¦] China has overtaken the US to become Taiwan’s largest export market† (see CIA). The last statement in the above-mentioned information, the one about China becoming the number export market for this nation speaks volumes about the economic potential of Taiwan. This also tells of its strategic position. Moreover, judging from this business relationship in spite of the shaky political relationship with the People’s Republic of China hints at Taiwan’s seriousness to overcome any obstacle to become a serious economic player in the region, in Asia and the world in general. Conclusion Looking at Taiwan and South Korea there is not much difference. This means that if I am forced to go to either one then I will be able to survive, thrive, and most probably succeed. Yet, since I have a choice in this matter, then I will choose Taiwan over South Korea. The following reasons supports my decision. Culture As mentioned earlier my family originally came from China. This means that I was raised in a family that practices or even cherishes values similar to those in China. Now, since Taiwan is considered part of China then it also implies that both countries share similar cultural traits. The same could not be said of South Korea whose culture is very different from the Chinese of mainland China. Having similar culture could also mean that it will take me a shorter amount of time to learn the do’s and dont’s of the Taiwanese culture. This translates to efficiency and promotion up the corporate ladder. This also means less mistakes and an increase in customer satisfaction. It also enable me to contribute in terms of giving inputs on how to improve servcie since I fully understand what the Taiwanes customers are actually saying and not merely interpreting their words into English and assuming that translated words are the actual intent of their communication. Food The closest thing to culture is food. In this aspect Taiwanese cuisine is similar to those in the mainland. This means that less trouble for me nutrition wise. Many have said that the most difficult part in crossing over other culture is not the different clothes and not even the language barrier. What is most difficult according to many is learning to stomach the exotic foods available in a particular locale.

Letter of Affection and Roxanne (1987) Essay Example | Topics and Well Written Essays - 750 words

Letter of Affection and Roxanne (1987) - Essay Example Looking back, I can definitely say that it was your personal involvement with me, the way you encouraged me to read books and how you introduced me to some of the great works in literature that saved me from my loneliness and distraught. Long four years, it was a crucial time in my life; moreover high school was my turning point. Initially it was a hard time with my studies, and it took time to cope up the new environment, and above all method of study was extremely different here. I had felt really disappointed. But you never made me feel that I was out of home. It was only because of your strong support, and guidance in my studies that I could cope with the situation and achieve my objectives. You always kept me out of my troubles and stress. As a ward I am grateful to you, that you took the pain to come along with me during the time of admission and for the meetings. My friends used to tell about your concern towards me, in spite of your busy schedule especially in finding time to often visit my teachers and personally discussing my problems and sorting them out. Your patience and conscious behavior are something that I admire. You were there around me whenever I needed somebody. I never had to come to you; instead you always came to me to find out what I needed. Uncle, you are my best friend too, and I am aware of the fact that I won’t get a person like you again. Four years have been great albeit with sprinkles of bitter experiences. There are so much of emotions bubbling up within my heart, and I can never let go of even one, because that would invariably mean that this chapter along with you never

Digital Marketing Essay Example | Topics and Well Written Essays - 2500 words - 1

Digital Marketing - Essay Example In the past Clarks has overcome challenges such as volatile market conditions, lack of financial flexibility as well as questionable planning and today, through extensive employment of digital marketing, Clarks is one of the largest private companies in the united kingdom and with massive global presence (Jones, 2012 p, 192-193). According to Tran (2012), Clarks’ products have a good reputation for high quality and are available in the latest fashions. The products have a good reputation for high quality and are available in the latest fashions. In the changing footwear industry, Clarks always comes with refreshing brands. The launch of online business has been a success for the company in building its international brand. Clarks has three main distinctive products that include the Desert Boot, Wallabee and desert Trek. The main feature for Clarks shoes is that they have unique comfort. Clarks designs and manufactures shoes that are uniquely styled, comfortable and of premium quality. Its concept of comfort in footwear dates back to 1960 when the company designed the Moccasin-inspired Wallabee. It was the most comfortable shoe in the world. Today, the Wallabees and the iconic desert Boots still sell at the company stores. Today, Clarks shoes that classified into different categories. They include Clarks walking shoes, Clarks’ casual shoes as well as Clarks business casual shoes. There are many other unstructured collections of shoes for men, women, boys and girls. The company’s product line includes boots, slippers, sandals, casual and sport shoes as well as bags (Jones, 2012 p, 192-193). Digital marketing strategy had been a drive towards the realization of massive digital presence for the company. It all begun in 2010 after the appointment of the current CEO, Melissa Potter, who drove the re-organization of the company’s business operations. Most importantly he launched online business for the company, and it has made Clarks a

Make up Essay Example | Topics and Well Written Essays - 1000 words

Make up - Essay Example Moreover, the plan requires all businesses and workers to abide by these rules. For a long time Republican and Democratic presidents used legal authority in dealing with the issue. However, President Obama took a commonsense approach. The approach by the President relies on his executive authority to ensure everyone is accountable and capable of following the law in contributing to the US. The president took the approach as the country anticipates for the Congress and Republicans to act. No hindrances exist that can affect the president’s decision since US constitution as well as Immigration and Naturalization Act offer the Executive authority to come up with enforcement priorities that improve the way agencies apply the law. US Supreme Court agrees on this. The executive authority allows both Democrat and Republican presidents to act on immigration. All presidents after President Eisenhower have legal authority that enables them to deal with immigration (The White House). For a long time, the US immigration system has been broken making it pointlessly difficult for the country to draw the best talent around the globe. Skilled workers usually wait for years or even decades before obtaining green cards to allow them contribute fully to the country’s economy and gain citizenship with time. Entrepreneurs lack devoted immigration corridor to allow them develop their enterprises and create jobs in the country. Every year, the country’s universities educate a number of well talented students only to coerce them to return to their country of origin and compete against the US. Through the executive action by the President, the immigration system is set to enhance immigration of highly skilled workers, entrepreneurs, and graduates (The White House). In the past, skilled immigrants got temporary work visas. Only in cases where no American employees available to

An Analysis of US Commercial Banking Sector of USAs Banking Industry Essay

An Analysis of US Commercial Banking Sector of USAs Banking Industry - Essay Example It is evident from the study that strong rumour is haunting the global banking industry that another banking crisis may spearhead in the wake of recent crisis in EU, and that may impact US banking industry also. In response to the scenario in Europe, the financial markets in US are demonstrating mounting signs of risk aversion and volatility. The outcome of the 2008 financial turmoil has prolonged to weigh on the recovery of economy; the credit rate downgrade and the recent debt ceiling fiasco have surmounted anxieties of financial volatility. Nonetheless, the US commercial banks as compared to their counterparts in Europe have more expanded portfolios and retain a much lesser share of government bonds. Moreover, US government backing and deposit insurance offer a vibrant backbone in the case of future bank failures as depositors prolong to have confidence in the capability of the US government to meet its commitments if there is a run -on -banks. This can be corroborated from the co ntemporary extreme low treasury yields. Commercial banking can be described as fiscal mediators with towering leverage, i.e. a comparatively higher ratio of short-term debt in the guise of deposits with a moderately little portion of equity. Large number of individual customers and business might have contributed the deposits to the bank. Thus, so pooled funds of commercial banks are accustomed to advance loans to individuals and businesses. (Iannotta 2010:2) In USA, commercial banks are institutions, which function as a financial mediator between borrowers and savers – thus, grouping the savings of many depositors and lending the same to eligible borrowers. Commercial banks thrive with a little margin as there will not much difference between the interest rate paid to the depositors and interest rate charged to the borrowers. To minimise the risk, commercial banks have established loan

Spotify Essay Example | Topics and Well Written Essays - 2000 words - 1

Spotify - Essay Example The strategic framework of SpotifyTM will help to implement technology to sustain competitive advantage in terms of cost and efficiency. Formulating other forms of strategies such as e-marketing, CRM, or SCM as part of organisation’s strategy helps a company to mange and utilise their resources optimally. Introduction SpotifyTM provides cloud based music streaming service delivered via internet mobile phones. Through cloud computing it offers subscribers access to its vast database of music. To maintain such large database the company would require effective managing of its information system. The information system is not isolated and constitutes interaction between hardware, software, data, people, and telecommunication. These components of an information system are built to create, assemble, and distribute important data and information to people across the globe (Lucey, 2004, p.31). From the information system hierarchy model it can be said that the strategic development i s a top down approach and it flows downwards from the top level management of organisation. The information system connects the top level management with people and process (Doyle, 2001, pp.2-14). ... he business strategy of SpotifyTM is to adapt to new technology of cloud computing and generate revenues through cloud based business model which will allow subscribers unlimited access to music database at least cost and shortest time. Using the five forces model, the relative attractiveness of cloud based technology industry can be analysed as follows: Threat of New Entrants - SpotifyTM offers its subscribers a vast database of music via cloud computing technology. As a result the subscribers will have faster access to music more conveniently and even from their mobile sets, at any place any time without having them to carry memory devices. At the same time multi-user interface will not slow down the server. The users will also get unlimited storage space and remote access even if their hard disk may have limited space. All these features and facilities provided by SpotifyTM are unlikely to face threat from the new entrants. Bargaining Power of Suppliers - The cost of cloud computi ng is economical since the database is centralised. It also requires less space, bandwidth and power. Thus, suppliers will have limited influence over SpotifyTM business model. Bargaining Power of Buyers - Cloud computing is very cost effective as it do not require subscribers to invest extra time and money to use standalone servers. Using cloud based computing the subscriber will get the opportunity to save money on data storage cost, management cost, and software updates. Threat of Substitutes – The only threat to cloud based technology is open source computing but it is much slower and requires the subscriber to have physical memory in order to store data which makes it more expensive compared to cloud based technology. Rivalry among Existing Competitors - SpotifyTM offers cloud based

Collaboration Systems at Isuzu Australia Limited Case Study

Collaboration Systems at Isuzu Australia Limited - Case Study Example The first step is to look at whether or not the company’s network can handle the increased bandwidth that will be used by the groupware itself; if not, additional steps will need to be taken in order to either upgrade the network that the company is on, or increase the amount of available bandwidth they have by obtaining a second account for company internet, increasing the plan that the company is on, or if the company is not obtaining their internet from a third party, reconfiguring the current network to increase available bandwidth.Once the bandwidth allocations of the network can handle the requirements of the groupware, the next step is to ensure that there is an intranet in place, or if not, to establish one. An intranet is a local or restricted communications network, especially a private network that is created using world wide web software. An intranet will allow for â€Å"a chance to streamline internal communication and collaboration† (Taylor, 1997); it is t hrough the use of the intranet that the groupware can be established across all different branches or locations.Though these are just two of the issues that may be faced with the companywide implementation of groupware, the issues themselves may be quickly resolved in order to ensure the modernization of a well-run company. Many people who use Sharepoint Servers use the terms â€Å"dashboard† and â€Å"scorecard† interchangeably, â€Å"but there is a significant difference between them† (Microsoft 2013)....Though these are just two of the issues that may be faced with the companywide implementation of groupware, the issues themselves may be quickly resolved in order to ensure the modernization of a well-run company. Explain the differences between dashboards and scorecards and propose ways Isuzu Australia Limited could use them Many people who use Sharepoint Servers use the terms â€Å"dashboard† and â€Å"scorecard† interchangeably, â€Å"but the re is a significant difference between them† (Microsoft, 2013). To best understand the differences between the two terms and how they could be best implemented at Isuzu Australia Limited, the terms themselves must be fully understood. A scorecard â€Å"is a type of report that displays a collection of key performance indicators (KPIs) together with performance targets for each KPI†¦it measures performance against goals† (Microsoft, 2013). A dashboard is â€Å"a container for a related group of scorecard and report views that are organized together in a SharePoint site† (Microsoft, 2013). In other words, a dashboard is made up of scorecards, and the scorecards themselves contain the information regarding the organization’s performance at a specific point in time. Isuzu Australia Limited could setup a SharePoint server in order to use the technology, allowing them to create scorecards that show them where they are from a business standpoint in terms of where they want to be. This can track any particular aspect of the business, from employee productivity, progress on a particular project, or even sales and revenue. This will allow Isuzu Australia Limited to be able to see at any given

Macro-Economics Essay Example | Topics and Well Written Essays - 1500 words

Macro-Economics - Essay Example Aggregate demand is the economy-wide demand for goods and services by all economic agents and aggregate supply is the total goods and services produced. The macroeconomic model of aggregate demand and aggregate supply determines the relationship between aggregate price level and aggregate output in the short run as well as the long run through the interaction of all the markets (Mankiw, 2008). The aggregate demand curve, that is the relationship between AD and aggregate price level, is drawn for a given supply of money. It slopes downward since higher the price level, lower is the real money balances, on account of the Quantity Theory of Money, and so lower is the demand for goods and services. The aggregate supply curve is the relationship between total goods and services produced in the economy and the price level. The long run AS supply curve is vertical while, in the Keynesian macroeconomic model, the short run AS curve is horizontal since prices are assumed to be sticky in the short run. In the long run, changes in aggregate demand affect prices but in the short run, changes in aggregate demand affects output only. Keynes proposed that low aggregate demand is responsible for low income and high unemployment that characterize economic downturns. This is in contrast to the classical view that aggregate supply, depending on the supply of labor capital and technology, determines national income. To reconcile these two views, it is considered that in the long run, prices are flexible so that aggregate supply determines the national income while in the short run, prices are sticky so that aggregate demand determines national income (Mankiw, 2008). The IS-LM model of aggregate demand represents the interaction of the goods and money markets. The IS curve is a downward sloping relationship between rate of interest and output that is derived from the equilibrium in the goods market. Here, planned expenditure, given by the total of consumption, investment and government expenditure in the closed economy and in addition, net exports in the open economy, is equal to the actual expenditure, given by the total output. Consumption depends on the disposable income after paying taxes, investment on interest rates, through the loanable funds market, and exogenously given government expenditure and net exports. In the money market, the LM curve denotes the relationship between rate of interest and output such that real money supply is equal to the real money demand. Even though money supply and prices are exogenous in the short run, real money demand depends positively on output (through the quantity theory of money) and rate of interest (through the theory of liquidity preference). The intersection of the IS and LM curve gives the equilibrium rate of interest and output. Thus, the interaction of the money market, the goods market and the loanable funds market determines equilibrium output and rate of interest. This may or may not be equal to the full employment output which is achieved in the long run when prices are flexible (Mankiw, 2008). Role of Government Policies If the economy is producing less than full employment output at equilibrium, the government can increase output by either fiscal policy or monetary policy. Fiscal policies to

Forced Convection (in a cross flow heat exchanger) Essay Example for Free

Forced Convection (in a cross flow heat exchanger) Essay The aim of this lab is to determine the average convective heat transfer coefficient for forced convection of a fluid (air) past a copper tube, which is used as a heat transfer model. Introduction The general definition for convection may be summarized to this definition energy transfer between the surface and fluid due to temperature difference and this energy transfer by either forced (external, internal flow) or natural convection. Heat transfer by forced convection generally makes use of a fan, blower, or pump to provide high velocity fluid (gas or liquid). The high-velocity fluid results in a decreased thermal resistance across the boundary layer from the fluid to the heated surface. This, in turn, increases the amount of heat that is carried away by the fluid. [1] Theory Background [2] Considering the heat lost by forced convection form the test rod. The amount of heat transferred is given by (1) Where = rate of heat transfer, unknown value. ?= film heat transfer coefficient, this is what we need to found out. A= area for heat transfer, this is the area of the cross section area of test section. T= temperature of the copper rod, the temperature after heating. Ta= temperature of air, surrounding temperature. So, in any period of time, dt, then the fall in temperature, dT, will be given as: (2) Where m= mass of copper rod, cp= specific heat of the copper rod, J/kgK Eliminating Q from (1) and (2) then Since Ta is constant, dT=d(T-Ta) Integrating gives: At t = 0, T=To, hence C1 = ln(T-To), hence: Or Therefore a plot of ln((T-Ta)/(Tmax-Ta))) against t should give a straight line of gradient from which the heat transfer coefficient, ? , can be found. To find the velocity of air passing the rod, first the velocity upstream must be found.

A Review of the Literature Essay Example for Free

A Review of the Literature Essay Introduction Because the focus on market orientation has steadily increased over the last decade, academicians and marketing managers have begun to debate the effectiveness of market orientation as a profit enhancing strategy. Researchers and marketing managers are attempting to measure the benefits and costs associated with the implementation of market orientation. For researches and managers, the key questions that surround market orientation are whether or not it increases performance, and if so, in which circumstances should market orientation be implemented. In order for market orientation to become a cornerstone of business practices in years to come, these questions must be answered. This review will focus on three articles which address these key questions: Market Orientation and Company Performance: Empirical Evidence from UK Companies by Greenley, G (1995), Market Orientation: Antecedents and Consequences, by Jaworski and Kohli (1993) and The Effect of a Market Orientation on Business Profitability by Narver and Slater (1990). Summary of The Effect of a Market Orientation on Business Profitability by Narver Slater (1990) In The Effect of a Market Orientation on Business Profitability (1990), Narver and Slater address the lack of empirical evidence surrounding the effectiveness of market orientation. They begin the article by stating: market orientation is the very heart of modern marketing management and strategy ? yet to date, no one has developed a valid measure of it or assessed its influence on business performance? as a result, business practitioners have had no specific guidance as to what precisely a market orientation is and what its actual effect on business performance may be. Their study attempts to develop a valid measure of market orientation and its effect on the profitability of the firm. Narver and Slaters study is designed to test the hypothesis that there is a strong correlation between market orientation and profit levels for both commodity and non-commodity businesses. Narver and Slater  hypothesize that market orientation is a one dimensional construct consisting of three behavioral components: customer orientation, competitor orientation and inter-functional coordination. Additionally, they hypothesize that there are two decision criteria: a long term focus and a profit objective. Based on these criteria, Narver and Slater developed a questionnaire which was given to a sample group of 140 strategic business units in the same division of a major Western corporation. They then used statistical analysis to try to determine the correlation between the adoption of market orientation and the increase in profit and overall performance. In order to obtain accurate results, the researchers attempted to limit the influence of the other forces that impact a businesss profit margin; by doing this, they were able to isolate two key variables and find the relationship between them. Based on their data and analysis, Narver and Slater concluded that there is a monotonic relationship between profit and market orientation for the non-commodity business, whereas the relationship with commodity business was only apparent above the stated median in market orientation. Narver and Slater also concluded that market orientation is economical in all environments, and the question was finding the optimal level of market orientation. Critique of The Effect of a Market Orientation on Business Profitability by Narver Slater (1990). Narver and Slaters study is one of the first major empirical studies on the subject of market orientation and its impact on the firms profit. This ground-breaking study offers empirical validation to theories that were unproven prior to the study. However, based on the results of Narver and Slaters study, there are still many questions that remain unanswered. I found that the most significant problem with the study is that their sample was taken from a single corporation, meaning that the data they used was limited to only one industry and one region. As Narver and Slater noted in their conclusion, a sample this limited means that their results can be influenced and skewed by many variables, including corporate culture and regional practices. It is also possible that their findings are industry-specific and do not pertain to other companies outside of foresting. However, in the articles conclusion, Narver and Slater acknowledge these shortcomings and are eager for others in different regions to conduct further research in this field. Although the limited nature of the study makes it difficult to draw any large scale conclusions about the effectiveness of market orientation, Narver and Slater have created a useful model for an empirical study of market orientation which can now be applied to other industries and regions. The most interesting part of the study is not necessarily the results, but the fact that they were able to design the first successful empirical study. Another problem with the study is that Narver and Slater concluded that an equilibrium existed: the point at which the level of market orientation reaches a point at which its cost is equal to its benefit. At this point, any increase of market orientation would only be detrimental to the firms profit margin. Although the study states that the equilibrium is present, the authors offer no guidance on how marketing managers can identify this critical point. Further studies should be dedicated to answering this question in order to make market orientation a more effective strategy for businesses. Additionally, in the articles conclusion, Narver and Slater neglected to discuss a very key finding which surfaced in their data. Their study revealed that market orientation can have a detrimental effect on a companys overall performance when certain market forces and internal conditions apply. In my opinion, this finding was largely ignored in the conclusion in order to validate their original hypothesis: that market orientation has a positive impact on the performance of an organization. Although this finding was acknowledged in the article, I felt the conclusion was somewhat misleading with regard to the outcome of the study in this respect. Summary of Market orientation: Antecedents and consequences, by Jaworski and Kohli (1993) In Market orientation: Antecedents and consequences (1993) Jaworski and Kohli set out to empirically build upon Narver Slaters study. Jaworski and Kohli attempt to study the relationship between market orientation and its effect on numerous aspects of the firm. The authors lay out a series of 13 hypotheses which they attempt to prove within their study. The four hypotheses that dealt directly with the key questions noted in the introduction of this review are: A. The greater the market orientation of an organization, the higher its business performance. B. The greater the market orientation, the greater the (1) esprit de corps and (2) organizational commitment of employees. C. The greater the market turbulence, the stronger the relationship between market orientation and business performance. D. The greater the competitive intensity, the stronger the relationship between market orientation and business performance. The other nine hypotheses are related to the antecedents of market orientation, including managements role on market orientation and the impact the organizations structure and communication has on market orientation. Although these questions are important, I am primarily interested in Jaworski and Kohlis conclusions on whether or not market orientation affects overall performance and profit/return on equity. Jaworski and Kohli set up two samples from which they derived their data. The first sample was made up of executives from 102 companies; the second sample was made up of 230 executives taken from the membership roster of the American Marketing Association. The authors gathered data via a questionnaire that was sent to participants by mail. Based on the data reviewed, Jaworski and Kohli concluded that market orientation is an important determinant of overall performance regardless of factors such as market turbulence, competitive intensity or technological turbulence. However in both samples, the authors found little correlation between market orientation and return on equity and market share. Jaworski and Kohli also found that the commitment of top management towards implementing market orientation is an important factor on the strategys overall performance, as are the levels of interdepartmental coordination and interdepartmental conflict. Critique of Market orientation: Antecedents and consequences, by Jaworski and Kohli (1993) Jaworski and Kohlis study measures the value that market orientation creates for a business. In their introduction, the authors state their intentions quite clearly: The purpose of this research is to address the voids in knowledge [in the Narver and Slater study]. (Jaworski Kohli 1993) In this study, Jaworski and Kohli build upon and answer many of the questions left unanswered in Narver and Slater (1990). In my opinion, one of the most important aspects of Jaworski and Kohlis article is that they attempted to explain their study in an accessible manner by including a section that dealt with the implications of their findings for market managers. Unlike Narver and Slater, I felt that Jaworski and Kohli went to great lengths to try to answer the key questions that managers might have and attempted to lay down guidelines that managers could use in the implementation of market orientation. Jaworski and Kohli also realized the importance of one of the findings Narver and Slater neglected in their conclusion: that market orientation could be detrimental to a business in certain circumstances. Jaworski and Kohli explained the relationships between market orientation and certain environmental contexts including market turbulence and competitiveness. The aspect of the study that I found most interesting was Jaworski and Kohlis discovery that there is neither an association between market orientation and return on equity nor a relationship between market orientation and market share. Although the two authors still concluded that market orientation was beneficial for overall performance, the finding that it does not help return on equity is very significant. Return on equity, for many firms, is the guiding factor in the decision-making process, especially for private equity groups and investment banking firms. Having worked for a private equity firm, where return on equity is the principal goal, I can confidently say these findings are a huge blow to the advocacy of market orientation. However, I would not feel comfortable ruling out market orientation based on one study; further research must be done on this topic. Additionally, I found one aspect of Jaworski and Kohlis conclusion problematic: the authors concluded that market orientation had a direct relationship with overall performance, organizational commitment and esprit de corps, yet they stated that it did not influence return on equity and market share. This finding seems to be contradictory to common business beliefs, which would suggest that if market orientation had a positive impact on commitment, overall performance and esprit de corps, it would therefore have an impact on profit or return on equity. This finding is either misleading or it indicates that common beliefs regarding performance and employee motivation are incorrect. Summary of Market orientation and company performance: empirical evidence from UK companies by Greenley, G (1995) In the article Market orientation and company performance: empirical evidence from UK companies Greenley identifies a clear need for an  empirical study in the United Kingdom. As of 1995, no major empirical research had taken place anywhere but the United States. Greenley created his study based upon this research gap. His basic hypothesis, that market orientation is positively associated with performance, is taken from the aforementioned studies by Narver and Slater (1990) and Jaworski and Kohli (1993). Greenley also tested additional hypotheses from Narver and Slaters 1990 study. The hypotheses Greenley tested dealt with the relationship between market orientation and cost, size of the company, market entry, customer power and competitive hostility in the market. Additionally, he tested hypotheses pertaining to market growth, turbulence and technological change. To obtain his data, Greenley used a slightly altered version of Narver and Slaters 1990 questionnaire, adapted for UK business culture. The questionnaires were sent to 280 top level managers, mainly CEOs. Of those 280 questionnaires, he received 240 usable responses, which made up the data for his study. Based on the analysis he conducted, Greenley concluded that market orientation does not have a direct affect on performance. (Greenley 1995) He also concluded that with high levels of market turbulence, market orientation is negatively associated with return on equity, whereas with low levels of market turbulence, market orientation is positively associated with return on equity. Critique of Market orientation and company performance: empirical evidence from UK companies by Greenley, G (1995) Greenleys study is the first major empirical study of market orientation in the UK, and quite surprisingly, his results were very different than the previous findings of studies conducted in the United States. Any reader of Greenleys study Market orientation and company performance must immediately question whether or not business culture and practices in the UK are so different from their United States counterparts that one strategy empirically proven to work in the United States will be rendered ineffective in the UK. If Greenleys results are accurate, multinational corporations using a centralized control method would have to rethink using market orientation. This, however, does not seem to be the case. Proctor and Gamble (PG) appear to successfully implement global strategies, including market orientation, profitably. Therefore, I propose that Greenleys inability to find a positive relationship between market orientation and performance is a result of a problem in his data collection process. As Greenley stated in his conclusion, his data was gathered during a recession, and therefore a managers thoughts on a long-term profit schemes such as market orientation might have been skewed. Also, Greenley obtained nearly 60 percent of his data from top level CEOs and Chairmen, a different sampling base than previous studies in the United States. For instance, Narver and Slater used CPUs and Jaworski and Kohli primarily used market managers for their samples. The difference in sample bases significantly impacts the results of Greenleys study; typically, CEOs and top management, like those that Greenley questioned, are not as involved in the day-to-day implementation of market orientation and tend to be short-term profit oriented. Managers lower on the organizations hierarchy, such as marketing managers, might have a more direct involvement with the implementation of market orientation. For future research, I think it would be more prudent to take a broader sample of managers at all levels, thereby eliminating any bias that can occur when only sampling a certain section of the managerial hierarchy. Another problem that I found in Greenleys conclusion was the fact that he did not make the individual participants aware of the studys purpose. Although he intended for this to be a tool for gathering accurate and unbiased data from participants, I believe this strategy actually had the opposite effect, given the timing of his article. During a recession, CEOs and Chairmen are attempting to regain short term profitability and/or attempting to scale down costs in order to survive until the recession ends. At such a time, market orientation would not be a viable option and it is unlikely that the top management Greenley questioned would consider it a useful strategy. Therefore, the data collected by Greenley during this period would have little or no relevance for the measurement of the effectiveness of market orientation outside of a recession. Conclusion All three of the articles discussed deal with the task of empirically studying the relationship between market orientation and its effects on businesses. Narver and Slater produced the first major study in this field and their research became a significant starting point for future studies. Narver and Slaters article stated that they found a direct relationship between marketing orientation and performance; however, the study also brought to light many holes in their research and aspects of this relationship which needed further study. Jaworski and Kohlis 1993 study attempted to answer some of the key questions that arose from Narver and Slaters article. The questions Jaworski and Kohli addressed included why some organizations are more market oriented then others and whether or not the linkage between market orientation and business performance depend on the environmental context. The Greenley study in 1995 was the first major study done outside the United States. Greenley followed Narver and Slaters model in his attempt to empirically study market orientation in the United Kingdom. While his methods were the same, Greenleys research produced very different results than that of Narver and Slater, and only agreed with some of Jaworski and Kohlis conclusions. In my opinion, Greenleys research only added to the confusion that surrounds the study of market orientation; the differences in his results can be attributed to many factors, including gaps in previous research, differences between the United States and the UK, or differences in the economy at the time of the studies. The ambiguous results of this study confirm the need for more research in order to answer the key question of market orientations relationship with performance and profit. Therefore, after reading and critically reviewing the above articles, my conclusion is that further empirical research must be done in order for there to be any confidence in the use of market orientation as a performance-enhancing strategy. A multi-national study or the study of multiple multinational companies would provide valuable insight into whether market orientation is exclusively suited to companies operating in the United States or if its implementation in different countries can also be profitable. Further research must also be done in order to affirm or refute Jaworski and Kohlis claim that market orientation has no positive relationship with market share and return on equity. I believe that if Jaworski and Kohlis claim is true, managers, especially those operating publically traded companies, will inevitably need to rethink the use of market orientation within their corporations. List of References Greenley, G. (1995). Market orientation and company performance: empirical evidence from UK companies. British Journal of Management, 6:1-13. Jaworski, B. and Kohli, A. (1993). Market orientation: antecedents and consequences. Journal of Marketing, 57(July): 53-70. Narver, J. and Slater, S. (1990). The effect of a market orientation on business profitability. Journal of Marketing 54(October): 20-35.

Benefits of the International Reporting Standards

Benefits of the International Reporting Standards 2. 0 Literature review 2.1 Introduction Literature abounds in polarising this subject matter the benefits of the international reporting standards. Looking back at the last quarter of the 20th century it will no longer be seen as an evolutionary period global financial market in a bit to introduce a single set of standards that will be generally acceptable in financial reporting. International reporting standards have revolutionized the domestic accounting system to a more capital oriented system (Hope et al, d Archy 2001). Lantto (2007) states that the information provided by the IFRS is more reliable and relevant. Darke and Deske (2006) highlights that the disclosure quality has increased tremendously since the adoption of the IFRS. Furthermore, Ding et al (2006) states that the adoption of the IFRS has made a great impact in bridging the differences in the use of the domestic standards among the countries. In justifying the theories, there are opinions as well as oppositions on the advantages of the international reporting standards. What becomes evident although arguably is that the movement from the domestic standard of reporting to the international standard of reporting is of great benefit to financial reporting to the shareholders, firms ,organizations and also global economy as it will place the whole countries in the same reporting field. This chapter will review this report from the historical background of the international financial reporting standards, the Implementation and enforcement then to the benefits of the adoption of this standard. 2.2 Financial Reporting. In the beginning financial reporting can hardly be called external (Alexander, Britton and Jorissen, 2003: 22) rather it was a way by which the owners were informed on their income and capital. This is because the owners and managers of the company were not separated. Until in the 1800s when they started encountering the agency problems it becomes evident to separate ownership (management) from capital supply. Then external wreporting was introduced in order to provide information outside the borders of a specific country. Hence, financial reporting emanates from internal to external reporting. Financial reporting provides information to the users for making economic decisions (Iqbal 2002). Gilmore and Wilmot (1992) states that reporting has developed over time in a bid to stress the need for investment decision making and also to attract investors into the company. Hegarty (1997) opines that the range and varieties of this reporting regime is as a result of an evolution which shows the uniqueness in the economic, cultural and legal jurisdiction. As a part of the revolutionary process financial reporting has changed over time (Crowther 2000). The change is a result of a need for a good financial reporting system that will communicate real value an d risk to the users of the reports (Damant 2000) .Hence, the quality of a financial report is dependent on the reporting standards. 2.3 Why Standards? According to (Perks 1994,p.137),Accounting standards may be seen as the professions rules, which supplement companies Act requirements that are intended to restrict directors freedom of manovoevre and to ensure that the financial statements are presented on a more comparable, consistent and standard basis. Perks (1994) reporting standards is also important in order to prevent scandals, abuses, financial collapsing in the companies and creative accounting that may jeopardize the profession. Also, Elliot and Elliot (2008) highlight some reasons for standard this includes: Comparability: Financial statements should be able to allow users make predictions on future cash flows and also evaluate managements performance. Credibility: For financial information to disclose information that will give a true and fair view, uniformity is therefore essential. Influence: To be able to stimulate a development of the conceptual framework the process at which the standards are formulated should be able to give a constructive appraisal of the policies proposed for the individual financial reporting. Discipline: A mandatory standard is necessary as it structures a regulation that will be systematic and ongoing thereby enforcing a disciple in the financial markets for all organizations listed in the stock exchange. The usefulness of a reporting standard cannot be overemphasized although there are some arguments on this. Harvey and Keer (1983) argued that information produced using financial standards could be unreliable at times and the standards might be bureaucratic and inflexible. Also, there may be adverse allocative effects . Consequently, there might be consensus-seeking and standard overload . Lets take an illustration of a of two companies; Enron and Ahold to further explain why we need standards. Enron is the seventh largest US based company falling into bankruptcy as a result of an overstated profit of $500 million and the Ahold the third largest US grocer had their earnings overstated for the past two years by $500. 2.3 How National differences affects reporting. Given that the environment differ from country to country, the types of decisions to be taken and information needed in decision making differs from one country to another. Hence, accounting system is environment specific. (Iqbal 2002). Adhikari and Tondkar (1992) reported that financial accounting reporting and disclosure standards and practices do not develop in a vacuum but reflect the particular environment in which they are developed (p. 76). The culture of a country affects its method of accounting and financial reporting. For example, Gary (1988) in his books illustrated one of the ways by which cultural differences affects countries financial reporting; a country with a high uncertainty avoidance and low individualism will tend to be more conservative in their income measurement than in a country with low certainty avoidance and high individualism. Although the measures of cultural attributes may be indistinct and not direct in financial reporting compared with the other factors that affect financial reporting.Also, the nature of accounting regulations in a country is influenced by the general system of law applicable in that country. For example Jaggi and Low (2000), notes that companies in the common laws countries tends to have a high level of disclosures than countries in a codified Roman law system. La Porta et al. (1998) argues that common countries have investors with a strong legal protection than the Roman law countries do. Moreover, the differences in the types of business organization and ownership also affect financial reporting. Elliot and Elliot (2008) further explains this stating that in a country like the UK the business structure indicates a separation of the ownership and the management while in the French business the structure differentiates the ownership from the managers.. According to Nobes and Parker (1 998, p.21):The difference in the providers of finance (creditors/insiders) versus (equity/ outsiders) is the key cause of international differences in financial reporting. Although there is an increasing scale, companies firms had to find extra capital to finance growth. (Alexander, Britton and Jorrisen 2003). Roe (2003), further argues that political differences are the major cause of the differences in corporate structures in the developed western countries. Also the accountancy profession is another determinant of the differences in financial reporting. Nobes and Parker (2006:36) emphasizes that the strength, size, and competence of the accountancy profession in a country affect the type of financial reporting that will be obtained in that country. So with these differences the financial analyst cannot be able to make a headway there is therefore a need for a uniform reporting standards. 2.4 Why the call for international reporting standards Over the years it becomes apparent for an ever increasing worldwide competition. The globalization of the markets and companies increased as a result of the cross-border securities market listings and capital raising.. Thus, there was no cross-border investments, investors therefore prefer to invest in companies whereby there will are more comfortable with their system of accounting . 2.5 Background of the International Reporting Standards. Financial reporting standards for international applicability became prevalent in the 1970s. International Accounting Standards committee (IASC) was set up in the 1973 in order to standardize the reporting differences in international investment communities. The establishment of the International Accounting Standard committee is seen as a response to the call by the accounting profession for a greater co-ordination of accounting rules among the various nations of the world (Kraayenhof 1960).The need was expressed in the international congresses of Accountants held in September, 1972 in Sydney. Chetkovich (1979, p.13) emphasizes that at each of these congresses, there was a demand for a better communications and closer cooperation among accountants on a worldwide basis; and also for greater harmonization of accounting standards. This statement led to the establishment of the IASC on June 29, 1973. The objectives of IASC are: to formulate and publish in the public interest, international standards; also to promote their acceptance and observance world-wide, and to work generally for the improvement and harmonisation of regulations, accounting standards and procedures relating to the presentation of financial statements. (IASC, 1983, Preface to Statements of International Accounting Standards, p.1). This is the first step towards the achievement of a globally recognised standard .The members of the IASC accept that adopting of international accounting standards (IAS) will improve the quality of financial statements (IASC ,1995). How far did this go or were there criticisms to this standard? IASC helped in solving the problem of uniformity although the purpose of it enactment was far from being realised. One of the weaknesses is that the standard issued by IASC has many objectives thereby making it difficult to achieve the purpose of consistency in recognition, measurement and presentation of transactions (IASB section 4). The standard is also too broad and allowed the use of several alternative accounting treatments. Atiken and Wise (1984) emphasizes that the IASC gives more attention to the multinational companies and investors in the multinational businesses more than it emphasizes on the harmonization of all spheres of the organization globally. Therefore emphasizing that IAS C was set up for the harmonization of accounting on a worldwide basis in order to improve the financial reporting and decision-making capability of multinational businesses, and investors in multinational businesses.(p.176). The second criticism to the use of IASC is that of the mandate. The statement starts with the phrase to formulate and publish in the public interest international standards†¦. (IASC). Hence they act in the interest of the public by a way of enforcing the rules which may not be favourable to the public. This absence of democratic legitimacy has been the major reason by which the IASC standards have not been enforced. Besides , this the structure and the membership composition of the IASC lacked the requirements needed for a global standard setting organization which includes the independence of its members, technical expertise and the decision making bodies representatives. McKinnon and Janelle (1983, p.33) argued that IASC has only succeeded in codifying generally accepted practice, in serving as a neutral source of standards ,and in influencing groups with the enforcement powers. Consequently, the IASC was restructured from the year 1998 to 2000 to International Accounting Standards Board (IASB). IASB is an independent London-based standard accounting body privately funded. The first IFRS was issued in the year 2003 with a membership of 19 countries but it has tremendously grown to 70 countries now with the EU mandating that all listed companies should use the IFRS in their financial reporting effective from the year 2005 (EC,2002). IASB has two member bodies the standard setting board and the member board of trustees .The IASB establishment is allied to that of the international federation of Accountants worldwide (IFAC).. The International Accounting Standards Board is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements in addition, the IASB co-operates with the national accounting standard-setters to achieve con vergence in accounting standards around the world. (IASB, 2002, p.1). IASB has taken corrective measures in removing the accounting alternatives thereby ensuring that firms give a report that will reflect a true position and economic performance of the firm. IASB also aims at promoting global consistency in application and enforcement. It has also met the requirement that the business which operates in multiple bodies have a uniform financial statement which will be understandable in the countries whereby they operate. 2.6 International Accounting Standard Board (IASB) versus FASB? Norwalk agreement in the year 2002 by the Financial accounting Standard Board (FASB) and the International Accounting Standards Board was signed by both bodies after the need for a high quality, consistent and a comparable information which will be applicable to both domestic and the cross border financial reporting was recognized. Jacob and Madu (2009, p.3) the cited that both FASB and the IASB has pledged to use their best efforts in making their existing financial reporting standards fully compatible as is practicable and to coordinate their future work programmes to ensure that once achieved compatibility is maintained. This was also confirmed in their meeting in October 2005 of the two bodies reaffirming their commitments to converge US GAAP to IFRS. In a Concept Release, the SEC(2000) notes, Establishing and maintaining high quality accounting standards are critical to the US approach to regulation of capital markets, which depends on providing high quality information to facilitate informed investment decisions. (Jacob and Madu 2009).SEC released a proposal on July 13 2007, which states that US should recognize financial statements prepared using the IFRS from the foreign private issuers without reconciling them back to GAAP [2].furthermore, SEC informs all the investors that IFRS is the only set of standards with a high quality accounting standards that is more informative, useful for preparing financial reports compared with the US GAAP. This recent move to IFRS suggest that ,IFRS is the only standard that is of high quality and globally recognized and also has a potential to improve comparability of the financial statements despite of the country whereby they are domiciled. Despite all these efforts to converge to IFRS some academic literature still opines this stating that there are still material differences between the IFRS and the US GAAP. More so, the information contained in reconciliation is evident in the investment decisions made by the US investors. for example ,Culter and Neidemeyer (2009) argues that the major challenge why US did not want to adopt the IFRS is that there are differences in regulation and the manner at which these rules are been interpreted. IFRS is principal based regulatory system; which means that the rules are already set. On the other hand US GAAP is ruled based, whereby a detailed guidelines and principles is already laid out. Delliot (2007) emphasized that the principle based rules focuses more on the objective not relying more on the detailed rules. Deming (2005,p.4) gives a conclusive report pointing out that IFRS has more of a common law approach, than the US GAAP which is more of a civil law approach Furthermore, in the number of standards, IFRS has forty nine sta ndards while and nineteen interpretations and this consist of an approximate of two hundred pages (Delliot 2009) while the US GAAP has twenty thousand page (Mitra 2009).Other notable differences are seen in the financial reporting using the US GAAP and the IFRS. This will be comprehensively reviewed in the subsequent chapter. 2.7 Implementation and Enforcement of Financial Reporting Standards The credibility of a standard relies on its smooth implementation by countries that adopts it. Enforcement is a difficult concept to quantify and measure (Nobes and Parker 2006). The enforcement process differs from one country to another. Even at the international level there is still no genuine enforcement process. Moreover, some accounting bodies set standards and leaves enforcement to other bodies while others do both. For example US Securities and Exchange Commission sets laws and enforces it while IASC, Accounting Standards board (ASB) sets and develops standards and do not have the power to enforce these standards For the set rule of IFRS to be achieved an enforcement body has to be set up with powers to enforce the standards (Lamfalussy, 2001; Committee of European Securities Regulators [CESR], 2003a). Nobes and Parker (2008) states that the most determining factor for a successful adoption of this standard as a global standard is in the approach taken by the financial regulating bodies in the countries that adopts it. Giner and Rees (2005), Brown and Tarca (2005 )and Ball(2006 ) affirms that the purpose of IFRS is to provide a high quality financial reporting which can only be achieved with vigorous enforcement by the regulatory bodies (Schipper 2005 and Ball et al. 2003.The enforcement has not been easy certain factor has affected the effective enforcement of the law. Some of them vary from the cost, regulators interest and whether the businesses or accountants really need them. Watts and Zimmerman (1986), opines that the value of regulation is an empirical question, more apprehensive of ho w the regulatory authorities can value the costs and benefits of regulation. For example in the EU countries the structure and the organization that is in charge of the oversight of the requirements in the financial reporting varies among the EU countries. Also some countries do not have institutional oversight of financial reporting (FEE, 2001a, p.10).The EU regulation therefore mandates that the member states are to take appropriate measures in order to ensure compliance with IFRS. (European Commission EC], 2002, n.16). As a result of this the need for a country to produce a multiple financial statements was eliminated. Lafferty (1981) noted that no enforcement mechanism ever existed in reality. Perks (1993), expressed in his opinion that, without a legal backing it is not easy for the reporting standards to be enforced. Enforcing of the accounting standards therefore may require statutory audit, an effective sanctions and monitoring by supervisory bodies and for it to be implemen ted. Thus, there will be continuous reformations and changes in these standards. IFRS AND EU The European Parliamentary on enacted a legislation 0n 14 March 2002 requiring all companies listed in the European stock exchange to publish their financial statements with in accordance with the International financial reporting standards. There is also an endorsement mechanism which ensures that IFRS meets the needs of the EU listed countries. 2.4 International Standardization, Harmonization and Uniformity. The move towards greater harmonization of professional accounting practices has been traced back 1904 and the first accounting congress in St Louis, Missouri (Samuels and Piper, 1985, p.59, Mueller, 1979, p.7). Samuels and Piper (1985 p.59) states that international issues were not important while Mueller (1979 p.7) states that there is a need to pay attention to International harmonization. Combarros (2000), also argues that there is a need for harmonization of the accounting. Harmonization and standardization are used synonymously by some authors (Tay and Parker, 1990). While other researchers has differentiated the two. Tay and Parker (1990, p.73) defined harmonization as a movement away from total diversity of practice and standardisation is seen as a process which involves a movement towards uniformity. Saudagaran (2001:32), futher emphasized that the rationale for harmonization is that it will enhance comparability of financial statements [therefore] making it easier to use acr oss countries While other proponents is of the school of thought that harmonization will is not be practicable or truly probable. Rudhede and Wahlberg (2003) emphasizes that the lack of accounting harmonization will give difficulties to the investors in understanding the accounting principles which varies among the countries. Walton. Moreover, harmonization is a way to put processes in place to be able to reduce the obstacles inherent in international comparability. Hulle (1993, p.73) stated that the objective of harmonization is the comparability of accounts. All the efforts of the EU towards harmonization of these accounting standards have been challenging and slow. 2.4.2 Merits of international harmonization. An argument in favour of international harmonization is, efficiency in trans-border transactions. (Walton, Haller, Raffournier, 1998, p.9). Although lack of uniformity in the reporting procedures and the comparability of the accounting information is another barrier to cross border investments. This comparability of the financial postions across national bodies is seen as one of the most important reason for harmonization (Cummins 1975). This will help to reduce lack of trust and non reliance on the financial statements. With this there will be a flow of international investment in the capital market. Turner (1983 p.58) in his studies affirms that the second advantage of harmonization is to consolidate divergent information when more than one set of report is required to comply with different national laws or practices; further stating that accounting diversity is the major cause why companies spend unnecessarily cost. According to Houston and Reinstein (2001), harmonization of the a ccounting standards will reduce the cost of business, more particularly across national borders, than it will contribute towards greater efficiency of the market regulations. Not only will that harmonization reduce the costs inherent in conducting financial statements analysis and investments in international context. Another advantage of international harmonization of the accounting standards is saving of resources (Muller 1961, Spacek 1971). Further arguments is that international harmonization of the accounting standards can advance capital market efficiency(Ramanna and Sletten 2009) while Ball et al., 2000; Ball Et al 2006 envisaged that if the international market does not go along with the associated capital market institutions can be expensive. Finally, harmonization of the international accounting standards will help in improving management decisions in the multinationals. (Hauworth 1973). 2.4.3 Demerits of international harmonization International harmonization if faced with some criticisms, Some of which are economic while others are political. One of the criticisms is that it cannot carter for a wide range of national circumstances, legal systems, stages of economic development, and cultural differences (Samuel and Piper, 1985, pp 100-109). Atiken and Islam refuted this stating that the nature of the economic transactions and the methods by which they are accounted for does not vary in essence. Walton, Haller, Raffournier, (1998) argued that harmonization distorts social balances that have not been tackled over a long period of time. In the readings of Blake and Hossain (1996) International harmonization of reporting standards especially IASC is less respectful of local particularities; in regards to this context options will be seen as to be bad ,methods are termed either good or bad and costly reconciliations is likely to be imposed. Kenny and Larson (1993) further argued that large professional organizations protect their selfish interest in the standard setting process. Also the absence of a strong professional accounting body is a major obstacle to harmonization of accounting standards. 2.10 Arguments for international reporting. The essence of international reporting standards is to give a universal reporting standard that will be comprehensive and transparent thereby improving investors confidence as well as also creating market integrity. (Hope et al., 2005; dArcy, 2001). In this section we looked at the benefits of international reporting standards to the investors, firms, and also to the global economy. Gordon (2008, p. 3) cited the speech of Levitt (1997) which stating that for international reporting standards to gain acceptance three key objectives must be in place: The standards should include a core set of accounting pronouncements that constitute a comprehensive, generally accepted basis of accounting. The standards must be of high quality – they must result in comparability and transparency and they must provide for full disclosure. The standards must be rigorously interpreted and applied. Financial Reporting quality and transparency under IFRS The question has been if the accounting figures reported under this standard will give of high quality compared to those under domestic standards?. Also will IFRS show transparency in disclosure for an informed decision for investment? Barth et al., (2007) states that this is an extremely intricate question to answer as the application of any given standard has exhibited the effects of the features of the financial reporting system, its standards, as well their interpretation, enforcement and litigation. As these affects the competence of the financial prepares and users. Tarca (2004) said that international accounting standards are one way of improving transparency in financial reporting. Ashbaugh and Pincus (2001) elaborate that since the adoption of IFRS there has been improvement in the forecast accuracy by the analyst. As a result of this analysts cost of information acquisition also reduces. Cuijpers and Buijink (2005) from his sample of firms domiciled in the European Union pr ovide evidence that the analyst following has increased. Also Barth et al (2003) and Barth et al (2007) reveal that higher value relevance for firms is higher since the adoption of the IFRS as compared with the pre adoption period. IFRS therefore reduces the estimation of risk in market returns. Hence we will say that the quality of the IFRS in financial reporting is therefore inestimable in countries that adopt IFRS than those that use the locally recognised standards. Although we have affirmed that IFRS is associated with a high accounting quality there may be oppositions to this. Firstly, where there is an intrinsic flexibility in the principles based standards; this may present opportunities for firms to manage their earning thereby reducing the accounting quality. Also, in a bit to limit the managerial discretion which relates to the accounting alternatives will also reduce the ability of the firm to report accounting measurements that will give a reflection of what the true po sition and economic performance of the company is. Thus, accounting regime affects the quality of the information thereby affecting the cost of capital. Cost of capital and IFRS Adoption There are various propositions on the whether the adoption of IFRS reduces liquidity and lower cost of capital. Before the adoption of IFRS investors have to spend some time and effort in translating the standards in a way they can to understand. This process wastes efforts time and incurs transaction cost. The cost of capital determines how risky an investment would be. The higher the cost of capital the more risky the investment will be. According to (Coffee 2002), findings on bonding theory there is a lowered cost of capital. Deske (2006) affirms that this associated reduction in information cost is the main benefits by which IFRS is being adopted. There will be a reduced cost since the same standard will be used by all countries not regarding where the countries are domiciled. Aras and Crowther (2008) argued that the reduction in the cost of information in the adoption of IFRS and an assured consequent reduction can only benefit the countries whose legal, cultural, and economic s ystem is the same with the nations which are involved in setting IFRS, hence other countries which are not beneficial to this may incur increased cost compliance. Although, Barth (2007); Marquez-Ramos (2008) emphasized that IFRS reduces information cost of an economy as capital flows and trade becomes globalised. Improved comparability of the accounting reports: The use of IFRS eliminates the lack of comparability of financial statements. Choi et al. 1999, p. 249 states that comparability eliminate the current misunderstandings of the investors on the reliability of foreign financial statements and this removes one of the most main impediments affecting the flow of international investment. It also makes it easier for companies to compare financial results of different reporting entities from different countries. Global recognition Globalization of the business activities has increased creating a need for comparability of financial information between firms of different countries .Most of the companies are going globalized therefore the use of national accounting rules is increasingly impairing effective communication both in internal and external reporting. In a recent study by the international federation of Accountants(IFAC) most accounting leaders all over the world has agreed that adopting IFRS will be vital for economic growth in their countries. It is also significant as it will make it easier to compare human capital needs of companys subsidiaries all over the world since professionals will be more mobile. IFRS improves profit figures: The movement from the domestically recognized standards to the internationally recognized standards has resulted to a tremendous increase in the net profit figures of top most countries financial reports although the balance sheets have deteriorated. It is noted already that IFRS requires a comprehensive reporting than the domestic standards. IFRS has determined the various accounting methods by which profit figures will be derived from and reported by the firms (Aras and Crowther 2008). Impact of IFRS on financial reporting Examining financial statement implications is important because, †¦ the only direct effects †¦ are changed financial statements †¦ (Hung and Subramanyan, 2004, p.4) Pijper (2009), further examines how IFRS has affected the reporting of financing on the balance sheet. In GAAP the put option were disclosed in a footnote as an off balance sheet figure, but with the IFRS the put options which is held by minorities are now treated as a financial liabilities. Prior to the adoption of IFRS most companies were very conservative in their depreciation rates and this was affecting the business profits in that some assets will still be in use and there is no report on the expense incurred against those assets in the income statements but now the IFRS has reduced the distortions b these excessive prudent nature of depreciation rates .From the studies of (Hung and Subramanyan 2004) IFRS emphasized that fair value should be used for balance sheet valuation. Barth et al (2005) from hi s studies discovered that companies that uses IFRS experienc Benefits of the International Reporting Standards Benefits of the International Reporting Standards 2. 0 Literature review 2.1 Introduction Literature abounds in polarising this subject matter the benefits of the international reporting standards. Looking back at the last quarter of the 20th century it will no longer be seen as an evolutionary period global financial market in a bit to introduce a single set of standards that will be generally acceptable in financial reporting. International reporting standards have revolutionized the domestic accounting system to a more capital oriented system (Hope et al, d Archy 2001). Lantto (2007) states that the information provided by the IFRS is more reliable and relevant. Darke and Deske (2006) highlights that the disclosure quality has increased tremendously since the adoption of the IFRS. Furthermore, Ding et al (2006) states that the adoption of the IFRS has made a great impact in bridging the differences in the use of the domestic standards among the countries. In justifying the theories, there are opinions as well as oppositions on the advantages of the international reporting standards. What becomes evident although arguably is that the movement from the domestic standard of reporting to the international standard of reporting is of great benefit to financial reporting to the shareholders, firms ,organizations and also global economy as it will place the whole countries in the same reporting field. This chapter will review this report from the historical background of the international financial reporting standards, the Implementation and enforcement then to the benefits of the adoption of this standard. 2.2 Financial Reporting. In the beginning financial reporting can hardly be called external (Alexander, Britton and Jorissen, 2003: 22) rather it was a way by which the owners were informed on their income and capital. This is because the owners and managers of the company were not separated. Until in the 1800s when they started encountering the agency problems it becomes evident to separate ownership (management) from capital supply. Then external wreporting was introduced in order to provide information outside the borders of a specific country. Hence, financial reporting emanates from internal to external reporting. Financial reporting provides information to the users for making economic decisions (Iqbal 2002). Gilmore and Wilmot (1992) states that reporting has developed over time in a bid to stress the need for investment decision making and also to attract investors into the company. Hegarty (1997) opines that the range and varieties of this reporting regime is as a result of an evolution which shows the uniqueness in the economic, cultural and legal jurisdiction. As a part of the revolutionary process financial reporting has changed over time (Crowther 2000). The change is a result of a need for a good financial reporting system that will communicate real value an d risk to the users of the reports (Damant 2000) .Hence, the quality of a financial report is dependent on the reporting standards. 2.3 Why Standards? According to (Perks 1994,p.137),Accounting standards may be seen as the professions rules, which supplement companies Act requirements that are intended to restrict directors freedom of manovoevre and to ensure that the financial statements are presented on a more comparable, consistent and standard basis. Perks (1994) reporting standards is also important in order to prevent scandals, abuses, financial collapsing in the companies and creative accounting that may jeopardize the profession. Also, Elliot and Elliot (2008) highlight some reasons for standard this includes: Comparability: Financial statements should be able to allow users make predictions on future cash flows and also evaluate managements performance. Credibility: For financial information to disclose information that will give a true and fair view, uniformity is therefore essential. Influence: To be able to stimulate a development of the conceptual framework the process at which the standards are formulated should be able to give a constructive appraisal of the policies proposed for the individual financial reporting. Discipline: A mandatory standard is necessary as it structures a regulation that will be systematic and ongoing thereby enforcing a disciple in the financial markets for all organizations listed in the stock exchange. The usefulness of a reporting standard cannot be overemphasized although there are some arguments on this. Harvey and Keer (1983) argued that information produced using financial standards could be unreliable at times and the standards might be bureaucratic and inflexible. Also, there may be adverse allocative effects . Consequently, there might be consensus-seeking and standard overload . Lets take an illustration of a of two companies; Enron and Ahold to further explain why we need standards. Enron is the seventh largest US based company falling into bankruptcy as a result of an overstated profit of $500 million and the Ahold the third largest US grocer had their earnings overstated for the past two years by $500. 2.3 How National differences affects reporting. Given that the environment differ from country to country, the types of decisions to be taken and information needed in decision making differs from one country to another. Hence, accounting system is environment specific. (Iqbal 2002). Adhikari and Tondkar (1992) reported that financial accounting reporting and disclosure standards and practices do not develop in a vacuum but reflect the particular environment in which they are developed (p. 76). The culture of a country affects its method of accounting and financial reporting. For example, Gary (1988) in his books illustrated one of the ways by which cultural differences affects countries financial reporting; a country with a high uncertainty avoidance and low individualism will tend to be more conservative in their income measurement than in a country with low certainty avoidance and high individualism. Although the measures of cultural attributes may be indistinct and not direct in financial reporting compared with the other factors that affect financial reporting.Also, the nature of accounting regulations in a country is influenced by the general system of law applicable in that country. For example Jaggi and Low (2000), notes that companies in the common laws countries tends to have a high level of disclosures than countries in a codified Roman law system. La Porta et al. (1998) argues that common countries have investors with a strong legal protection than the Roman law countries do. Moreover, the differences in the types of business organization and ownership also affect financial reporting. Elliot and Elliot (2008) further explains this stating that in a country like the UK the business structure indicates a separation of the ownership and the management while in the French business the structure differentiates the ownership from the managers.. According to Nobes and Parker (1 998, p.21):The difference in the providers of finance (creditors/insiders) versus (equity/ outsiders) is the key cause of international differences in financial reporting. Although there is an increasing scale, companies firms had to find extra capital to finance growth. (Alexander, Britton and Jorrisen 2003). Roe (2003), further argues that political differences are the major cause of the differences in corporate structures in the developed western countries. Also the accountancy profession is another determinant of the differences in financial reporting. Nobes and Parker (2006:36) emphasizes that the strength, size, and competence of the accountancy profession in a country affect the type of financial reporting that will be obtained in that country. So with these differences the financial analyst cannot be able to make a headway there is therefore a need for a uniform reporting standards. 2.4 Why the call for international reporting standards Over the years it becomes apparent for an ever increasing worldwide competition. The globalization of the markets and companies increased as a result of the cross-border securities market listings and capital raising.. Thus, there was no cross-border investments, investors therefore prefer to invest in companies whereby there will are more comfortable with their system of accounting . 2.5 Background of the International Reporting Standards. Financial reporting standards for international applicability became prevalent in the 1970s. International Accounting Standards committee (IASC) was set up in the 1973 in order to standardize the reporting differences in international investment communities. The establishment of the International Accounting Standard committee is seen as a response to the call by the accounting profession for a greater co-ordination of accounting rules among the various nations of the world (Kraayenhof 1960).The need was expressed in the international congresses of Accountants held in September, 1972 in Sydney. Chetkovich (1979, p.13) emphasizes that at each of these congresses, there was a demand for a better communications and closer cooperation among accountants on a worldwide basis; and also for greater harmonization of accounting standards. This statement led to the establishment of the IASC on June 29, 1973. The objectives of IASC are: to formulate and publish in the public interest, international standards; also to promote their acceptance and observance world-wide, and to work generally for the improvement and harmonisation of regulations, accounting standards and procedures relating to the presentation of financial statements. (IASC, 1983, Preface to Statements of International Accounting Standards, p.1). This is the first step towards the achievement of a globally recognised standard .The members of the IASC accept that adopting of international accounting standards (IAS) will improve the quality of financial statements (IASC ,1995). How far did this go or were there criticisms to this standard? IASC helped in solving the problem of uniformity although the purpose of it enactment was far from being realised. One of the weaknesses is that the standard issued by IASC has many objectives thereby making it difficult to achieve the purpose of consistency in recognition, measurement and presentation of transactions (IASB section 4). The standard is also too broad and allowed the use of several alternative accounting treatments. Atiken and Wise (1984) emphasizes that the IASC gives more attention to the multinational companies and investors in the multinational businesses more than it emphasizes on the harmonization of all spheres of the organization globally. Therefore emphasizing that IAS C was set up for the harmonization of accounting on a worldwide basis in order to improve the financial reporting and decision-making capability of multinational businesses, and investors in multinational businesses.(p.176). The second criticism to the use of IASC is that of the mandate. The statement starts with the phrase to formulate and publish in the public interest international standards†¦. (IASC). Hence they act in the interest of the public by a way of enforcing the rules which may not be favourable to the public. This absence of democratic legitimacy has been the major reason by which the IASC standards have not been enforced. Besides , this the structure and the membership composition of the IASC lacked the requirements needed for a global standard setting organization which includes the independence of its members, technical expertise and the decision making bodies representatives. McKinnon and Janelle (1983, p.33) argued that IASC has only succeeded in codifying generally accepted practice, in serving as a neutral source of standards ,and in influencing groups with the enforcement powers. Consequently, the IASC was restructured from the year 1998 to 2000 to International Accounting Standards Board (IASB). IASB is an independent London-based standard accounting body privately funded. The first IFRS was issued in the year 2003 with a membership of 19 countries but it has tremendously grown to 70 countries now with the EU mandating that all listed companies should use the IFRS in their financial reporting effective from the year 2005 (EC,2002). IASB has two member bodies the standard setting board and the member board of trustees .The IASB establishment is allied to that of the international federation of Accountants worldwide (IFAC).. The International Accounting Standards Board is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements in addition, the IASB co-operates with the national accounting standard-setters to achieve con vergence in accounting standards around the world. (IASB, 2002, p.1). IASB has taken corrective measures in removing the accounting alternatives thereby ensuring that firms give a report that will reflect a true position and economic performance of the firm. IASB also aims at promoting global consistency in application and enforcement. It has also met the requirement that the business which operates in multiple bodies have a uniform financial statement which will be understandable in the countries whereby they operate. 2.6 International Accounting Standard Board (IASB) versus FASB? Norwalk agreement in the year 2002 by the Financial accounting Standard Board (FASB) and the International Accounting Standards Board was signed by both bodies after the need for a high quality, consistent and a comparable information which will be applicable to both domestic and the cross border financial reporting was recognized. Jacob and Madu (2009, p.3) the cited that both FASB and the IASB has pledged to use their best efforts in making their existing financial reporting standards fully compatible as is practicable and to coordinate their future work programmes to ensure that once achieved compatibility is maintained. This was also confirmed in their meeting in October 2005 of the two bodies reaffirming their commitments to converge US GAAP to IFRS. In a Concept Release, the SEC(2000) notes, Establishing and maintaining high quality accounting standards are critical to the US approach to regulation of capital markets, which depends on providing high quality information to facilitate informed investment decisions. (Jacob and Madu 2009).SEC released a proposal on July 13 2007, which states that US should recognize financial statements prepared using the IFRS from the foreign private issuers without reconciling them back to GAAP [2].furthermore, SEC informs all the investors that IFRS is the only set of standards with a high quality accounting standards that is more informative, useful for preparing financial reports compared with the US GAAP. This recent move to IFRS suggest that ,IFRS is the only standard that is of high quality and globally recognized and also has a potential to improve comparability of the financial statements despite of the country whereby they are domiciled. Despite all these efforts to converge to IFRS some academic literature still opines this stating that there are still material differences between the IFRS and the US GAAP. More so, the information contained in reconciliation is evident in the investment decisions made by the US investors. for example ,Culter and Neidemeyer (2009) argues that the major challenge why US did not want to adopt the IFRS is that there are differences in regulation and the manner at which these rules are been interpreted. IFRS is principal based regulatory system; which means that the rules are already set. On the other hand US GAAP is ruled based, whereby a detailed guidelines and principles is already laid out. Delliot (2007) emphasized that the principle based rules focuses more on the objective not relying more on the detailed rules. Deming (2005,p.4) gives a conclusive report pointing out that IFRS has more of a common law approach, than the US GAAP which is more of a civil law approach Furthermore, in the number of standards, IFRS has forty nine sta ndards while and nineteen interpretations and this consist of an approximate of two hundred pages (Delliot 2009) while the US GAAP has twenty thousand page (Mitra 2009).Other notable differences are seen in the financial reporting using the US GAAP and the IFRS. This will be comprehensively reviewed in the subsequent chapter. 2.7 Implementation and Enforcement of Financial Reporting Standards The credibility of a standard relies on its smooth implementation by countries that adopts it. Enforcement is a difficult concept to quantify and measure (Nobes and Parker 2006). The enforcement process differs from one country to another. Even at the international level there is still no genuine enforcement process. Moreover, some accounting bodies set standards and leaves enforcement to other bodies while others do both. For example US Securities and Exchange Commission sets laws and enforces it while IASC, Accounting Standards board (ASB) sets and develops standards and do not have the power to enforce these standards For the set rule of IFRS to be achieved an enforcement body has to be set up with powers to enforce the standards (Lamfalussy, 2001; Committee of European Securities Regulators [CESR], 2003a). Nobes and Parker (2008) states that the most determining factor for a successful adoption of this standard as a global standard is in the approach taken by the financial regulating bodies in the countries that adopts it. Giner and Rees (2005), Brown and Tarca (2005 )and Ball(2006 ) affirms that the purpose of IFRS is to provide a high quality financial reporting which can only be achieved with vigorous enforcement by the regulatory bodies (Schipper 2005 and Ball et al. 2003.The enforcement has not been easy certain factor has affected the effective enforcement of the law. Some of them vary from the cost, regulators interest and whether the businesses or accountants really need them. Watts and Zimmerman (1986), opines that the value of regulation is an empirical question, more apprehensive of ho w the regulatory authorities can value the costs and benefits of regulation. For example in the EU countries the structure and the organization that is in charge of the oversight of the requirements in the financial reporting varies among the EU countries. Also some countries do not have institutional oversight of financial reporting (FEE, 2001a, p.10).The EU regulation therefore mandates that the member states are to take appropriate measures in order to ensure compliance with IFRS. (European Commission EC], 2002, n.16). As a result of this the need for a country to produce a multiple financial statements was eliminated. Lafferty (1981) noted that no enforcement mechanism ever existed in reality. Perks (1993), expressed in his opinion that, without a legal backing it is not easy for the reporting standards to be enforced. Enforcing of the accounting standards therefore may require statutory audit, an effective sanctions and monitoring by supervisory bodies and for it to be implemen ted. Thus, there will be continuous reformations and changes in these standards. IFRS AND EU The European Parliamentary on enacted a legislation 0n 14 March 2002 requiring all companies listed in the European stock exchange to publish their financial statements with in accordance with the International financial reporting standards. There is also an endorsement mechanism which ensures that IFRS meets the needs of the EU listed countries. 2.4 International Standardization, Harmonization and Uniformity. The move towards greater harmonization of professional accounting practices has been traced back 1904 and the first accounting congress in St Louis, Missouri (Samuels and Piper, 1985, p.59, Mueller, 1979, p.7). Samuels and Piper (1985 p.59) states that international issues were not important while Mueller (1979 p.7) states that there is a need to pay attention to International harmonization. Combarros (2000), also argues that there is a need for harmonization of the accounting. Harmonization and standardization are used synonymously by some authors (Tay and Parker, 1990). While other researchers has differentiated the two. Tay and Parker (1990, p.73) defined harmonization as a movement away from total diversity of practice and standardisation is seen as a process which involves a movement towards uniformity. Saudagaran (2001:32), futher emphasized that the rationale for harmonization is that it will enhance comparability of financial statements [therefore] making it easier to use acr oss countries While other proponents is of the school of thought that harmonization will is not be practicable or truly probable. Rudhede and Wahlberg (2003) emphasizes that the lack of accounting harmonization will give difficulties to the investors in understanding the accounting principles which varies among the countries. Walton. Moreover, harmonization is a way to put processes in place to be able to reduce the obstacles inherent in international comparability. Hulle (1993, p.73) stated that the objective of harmonization is the comparability of accounts. All the efforts of the EU towards harmonization of these accounting standards have been challenging and slow. 2.4.2 Merits of international harmonization. An argument in favour of international harmonization is, efficiency in trans-border transactions. (Walton, Haller, Raffournier, 1998, p.9). Although lack of uniformity in the reporting procedures and the comparability of the accounting information is another barrier to cross border investments. This comparability of the financial postions across national bodies is seen as one of the most important reason for harmonization (Cummins 1975). This will help to reduce lack of trust and non reliance on the financial statements. With this there will be a flow of international investment in the capital market. Turner (1983 p.58) in his studies affirms that the second advantage of harmonization is to consolidate divergent information when more than one set of report is required to comply with different national laws or practices; further stating that accounting diversity is the major cause why companies spend unnecessarily cost. According to Houston and Reinstein (2001), harmonization of the a ccounting standards will reduce the cost of business, more particularly across national borders, than it will contribute towards greater efficiency of the market regulations. Not only will that harmonization reduce the costs inherent in conducting financial statements analysis and investments in international context. Another advantage of international harmonization of the accounting standards is saving of resources (Muller 1961, Spacek 1971). Further arguments is that international harmonization of the accounting standards can advance capital market efficiency(Ramanna and Sletten 2009) while Ball et al., 2000; Ball Et al 2006 envisaged that if the international market does not go along with the associated capital market institutions can be expensive. Finally, harmonization of the international accounting standards will help in improving management decisions in the multinationals. (Hauworth 1973). 2.4.3 Demerits of international harmonization International harmonization if faced with some criticisms, Some of which are economic while others are political. One of the criticisms is that it cannot carter for a wide range of national circumstances, legal systems, stages of economic development, and cultural differences (Samuel and Piper, 1985, pp 100-109). Atiken and Islam refuted this stating that the nature of the economic transactions and the methods by which they are accounted for does not vary in essence. Walton, Haller, Raffournier, (1998) argued that harmonization distorts social balances that have not been tackled over a long period of time. In the readings of Blake and Hossain (1996) International harmonization of reporting standards especially IASC is less respectful of local particularities; in regards to this context options will be seen as to be bad ,methods are termed either good or bad and costly reconciliations is likely to be imposed. Kenny and Larson (1993) further argued that large professional organizations protect their selfish interest in the standard setting process. Also the absence of a strong professional accounting body is a major obstacle to harmonization of accounting standards. 2.10 Arguments for international reporting. The essence of international reporting standards is to give a universal reporting standard that will be comprehensive and transparent thereby improving investors confidence as well as also creating market integrity. (Hope et al., 2005; dArcy, 2001). In this section we looked at the benefits of international reporting standards to the investors, firms, and also to the global economy. Gordon (2008, p. 3) cited the speech of Levitt (1997) which stating that for international reporting standards to gain acceptance three key objectives must be in place: The standards should include a core set of accounting pronouncements that constitute a comprehensive, generally accepted basis of accounting. The standards must be of high quality – they must result in comparability and transparency and they must provide for full disclosure. The standards must be rigorously interpreted and applied. Financial Reporting quality and transparency under IFRS The question has been if the accounting figures reported under this standard will give of high quality compared to those under domestic standards?. Also will IFRS show transparency in disclosure for an informed decision for investment? Barth et al., (2007) states that this is an extremely intricate question to answer as the application of any given standard has exhibited the effects of the features of the financial reporting system, its standards, as well their interpretation, enforcement and litigation. As these affects the competence of the financial prepares and users. Tarca (2004) said that international accounting standards are one way of improving transparency in financial reporting. Ashbaugh and Pincus (2001) elaborate that since the adoption of IFRS there has been improvement in the forecast accuracy by the analyst. As a result of this analysts cost of information acquisition also reduces. Cuijpers and Buijink (2005) from his sample of firms domiciled in the European Union pr ovide evidence that the analyst following has increased. Also Barth et al (2003) and Barth et al (2007) reveal that higher value relevance for firms is higher since the adoption of the IFRS as compared with the pre adoption period. IFRS therefore reduces the estimation of risk in market returns. Hence we will say that the quality of the IFRS in financial reporting is therefore inestimable in countries that adopt IFRS than those that use the locally recognised standards. Although we have affirmed that IFRS is associated with a high accounting quality there may be oppositions to this. Firstly, where there is an intrinsic flexibility in the principles based standards; this may present opportunities for firms to manage their earning thereby reducing the accounting quality. Also, in a bit to limit the managerial discretion which relates to the accounting alternatives will also reduce the ability of the firm to report accounting measurements that will give a reflection of what the true po sition and economic performance of the company is. Thus, accounting regime affects the quality of the information thereby affecting the cost of capital. Cost of capital and IFRS Adoption There are various propositions on the whether the adoption of IFRS reduces liquidity and lower cost of capital. Before the adoption of IFRS investors have to spend some time and effort in translating the standards in a way they can to understand. This process wastes efforts time and incurs transaction cost. The cost of capital determines how risky an investment would be. The higher the cost of capital the more risky the investment will be. According to (Coffee 2002), findings on bonding theory there is a lowered cost of capital. Deske (2006) affirms that this associated reduction in information cost is the main benefits by which IFRS is being adopted. There will be a reduced cost since the same standard will be used by all countries not regarding where the countries are domiciled. Aras and Crowther (2008) argued that the reduction in the cost of information in the adoption of IFRS and an assured consequent reduction can only benefit the countries whose legal, cultural, and economic s ystem is the same with the nations which are involved in setting IFRS, hence other countries which are not beneficial to this may incur increased cost compliance. Although, Barth (2007); Marquez-Ramos (2008) emphasized that IFRS reduces information cost of an economy as capital flows and trade becomes globalised. Improved comparability of the accounting reports: The use of IFRS eliminates the lack of comparability of financial statements. Choi et al. 1999, p. 249 states that comparability eliminate the current misunderstandings of the investors on the reliability of foreign financial statements and this removes one of the most main impediments affecting the flow of international investment. It also makes it easier for companies to compare financial results of different reporting entities from different countries. Global recognition Globalization of the business activities has increased creating a need for comparability of financial information between firms of different countries .Most of the companies are going globalized therefore the use of national accounting rules is increasingly impairing effective communication both in internal and external reporting. In a recent study by the international federation of Accountants(IFAC) most accounting leaders all over the world has agreed that adopting IFRS will be vital for economic growth in their countries. It is also significant as it will make it easier to compare human capital needs of companys subsidiaries all over the world since professionals will be more mobile. IFRS improves profit figures: The movement from the domestically recognized standards to the internationally recognized standards has resulted to a tremendous increase in the net profit figures of top most countries financial reports although the balance sheets have deteriorated. It is noted already that IFRS requires a comprehensive reporting than the domestic standards. IFRS has determined the various accounting methods by which profit figures will be derived from and reported by the firms (Aras and Crowther 2008). Impact of IFRS on financial reporting Examining financial statement implications is important because, †¦ the only direct effects †¦ are changed financial statements †¦ (Hung and Subramanyan, 2004, p.4) Pijper (2009), further examines how IFRS has affected the reporting of financing on the balance sheet. In GAAP the put option were disclosed in a footnote as an off balance sheet figure, but with the IFRS the put options which is held by minorities are now treated as a financial liabilities. Prior to the adoption of IFRS most companies were very conservative in their depreciation rates and this was affecting the business profits in that some assets will still be in use and there is no report on the expense incurred against those assets in the income statements but now the IFRS has reduced the distortions b these excessive prudent nature of depreciation rates .From the studies of (Hung and Subramanyan 2004) IFRS emphasized that fair value should be used for balance sheet valuation. Barth et al (2005) from hi s studies discovered that companies that uses IFRS experienc