The Fair Value change with respect to the Financial Crisis Essay Example for Free

The Fair Value change with respect to the Financial Crisis Essay The world has come under the grips of a global financial crisis. Such events with big accounting and financial impacts are few and forlorn but when they do come, they bring with them uncertainty and pessimism as well as the desire to bring about some change so as to curtail such events from taking place in the future. With regards to standard setting, this is being achieved through the debate surrounding fair value reporting. Banks and many other troubled financial institutions that bore the brunt of the tidal wave of the credit crunch are calling on the Financial Accounting Standards Board to ease their stance in relation to fair value accounting whereas investors and financial analysts are standing forward to block this move. Fair value accounting had been brought into place after much deliberation by standard setters over the years. Its application worldwide was a reflection of the need for financial statements to reflect the assets held by firm on their balance sheets at prices they could be realized at today in the markets, in a fair deal and an arm’s length transaction. This was recognized as something that provided a fair outlook of the current financial position of banks and other institutions and was held very closely guarded by the FASB (Katz 2009). The chairman of the board’s adherence to the need for fair value to continue and his defense of the methodology in a testimony before the US House of Representatives Financial Services Subcommittee in March of 2009 is a strong indicator of where standard setters actually fall in the debate. However, in April of 2009 the board voted to relax the fair value rules under strong political pressure and in an uncharacteristically rapid fashion for a body that is known to engage in long debates and continued discussion before enacting any changes in the accounting standards. This change has sparked unique responses from the two sides of the debate. Banks and other financial institutions have been delighted with the measure. They had come out in open opposition to fair value rules following the financial crisis stating that it unfairly influenced their accounts. They argued that the use of the fair value criteria resulted in them show items in their balance sheet as significantly lower value than they would be actually realized at, thereby giving them a relatively bleak financial outlook with very pessimistic figures (Katz 2009). The impetus for the move was that if this could be alleviated to some extent, then banks would be better able to report their true financial situation and reduce some of the write-offs that have wrecked the industry, thereby even putting them in a better position to issue more loans and perhaps precipitate faster recovery from the crisis. The optimism of the banks with regards to the proposed shift by the FASB was reflected in the markets as the stocks of major banks such as Citibank and Bank of America went up in the New York Stock Exchange. Investors and financial analysts however have been strongly against the move being put forward by the FASB in April. They argue that fair value accounting results in showing the actual financial health of the financial institution and changing the rules would result in a distorted perspective being put forward to the investors. It is further seen as being a highly transparent view of the financial health as it leads to assets being valued at the amount they could be traded today which is a reflection of the economic times as well as the trend of decision making that has been going on in the industry. Thus after the changes have been brought into place, investor group are showing growing unhappiness at what is viewed as something potentially harmful. They were also wary of the involvement of political pressure in the move, which if freely allowed to influence international standard setting would compromise the integrity of the field and harm investor confidence as well. The FASB did come out in support of the investor though by additionally requiring more disclosure of the methodology employed by firm for valuation after the FASB allowed them significantly more room for judgment regarding it through relaxation of the rules. It further did not allow the financial institutions to apply the changes retrospectively which would have altered their 2008 statements as well. It also restricted the application of some proposed changes such as those relating to valuing impaired securities by keeping it only for debt securities. FASB’s shift has been in a manner that can be considered characteristically different from its formal procedure. The world of standard setting has been slow with prolonged discussions before any changes are brought forward. With regards to the current change, it was made considerably rapidly by bringing in remarks for discussion, pursuing a review of one day and then handing out the proposed changes which is a testament to the tricky financial times and political pressure. The shift that was brought about included allowing the firms considerable room for â€Å"judgment† with regards to gauging prices of some of their investments represented on the financial statement as well as those for mortgage backed securities (Katz 2009). This did meet with opposition from other bodies such as the CFA Institute and investors groups, the former arguing that such arbitrary changes damage their credibility while the latter is in woe of the difficulties investors will face now. They have even gone out to condemn to some extent the U-turn taken by the chairman of the FASB whereby he shunned the changes proposed to fair value methodology in front of congressional subcommittee but then agreed to put in place the same measures hardly a month later. Thus it can be seen that the current financial crisis has altered the direction standard setting in accounting has taken. It can be said that this is a fairly damaging trend. While it may result in short term gains for fighting the financial crisis and help shore up loans and lending, it could be damaging in the long run as political pressures and advocacy groups may damage the credibility and transparency of standard setting and financial statements presentation. It could also be adverse for the investor who may not trust the standards as providing fair information and affect their behavior. Furthermore, the integrity of the institute may well have been compromised in this case by the u-turns being adopted by the chairman of the FASB. Bibliography Katz, Ian (2009, April 2). FASB Eases Fair-Value Rules Amid Lawmaker Pressure. Retrieved June 17, 2009, from Bloomberg Web site: http://www.bloomberg.com

Human Resource Management in Business Essay -- essays research papers

Human Resource Management in Business Abstract Human Resource Management (HRM) is no longer a personnel office that is simply a record-keeping and maintenance function. Huselid (1995) points out that there is a positive correlation that has developed between HRM as a strategic ally and company performance. HRM research has grown from an atheoretical origin to view organizational activities from an interdisciplinary perspective (Jennings, 1994) that is concerned with a movement toward methodological and theoretical development (Ferris & Judge, 1991). This review will look at the different ways HRM plays into the overall scheme of providing an organization with a more sustainable competitive edge. Table of Contents Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..4 Background†¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦4 Strategic Human Resource Management†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.6 Multicultural Knowledge Transfer†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..8 HRM in the Public Sector†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦9 Conclusion†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.11 References†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..13 Human Resource Management in Business The fast paced area of HRM as seen many new developments in the science and practice of the field over its roughly 80-year history (Ferris et al., 1999). One of the earlier developments in HRM research that still has significance today was, at the time, a theoretical foundation that challenged researchers to design measures to assess the relationship between â€Å"individual personalities† and â€Å"company personalities† (Gilmer, 1960). This field of inquiry led to the research that has come to be known as strategic human resource management (SHRM), a field that attempts to align HRM functions and activities with the strategic goals of the organization (Butler, Ferris, & Napier, 1991). Another aspect of this review takes a look at HRM from an international perspective. This viewpoint acknowledges the importance of the global economy, as well as emphasizes the value of the Human Resource (HR) activities that address cross-cultural concerns (Napier, Tibau, Janssens, & Pilenzo, 1995). Lastly, the political perspective of HRM presents an opportunity to address those features of public sector HRM practices that have become outdated by contemporary organizational standards (Soni, 2004). Background Human Resource Management is a diverse ent... ...the international human resources manager. In G. R. Ferris, S. D. Rosen & D. T. Barnum. (Eds.), Handbook of human resource management: 217-242. Oxford, UK: Blackwell Publishers. Pfeffer, J. (1998). The human equation: Building profits by putting people first. Harvard Business Press: Boston. Romano, E. (1995). Opportunity in diversity. Journal of Property Management, 60, 2, 30 (6). Retrieved November 12, 2004, from InfoTrac database. Soni, V. (2004). From crisis to opportunity: Human resource challenges for the public sector in the twenty-first century. The Review of Policy Research, 21, 2, 157-178. Retrieved November 8, 2004 from H.W. Wilson database. Sundstrom, E., DeMeuse, K. P., & Futrell, D. (1990). Work teams: applications and effectiveness. American Psychologist, 45, 2, 120-133. Walker, D. M. (2000). (Statement from David Walker) Managing human capital in the 21st century. Report no. GAO/T-GGD-00-77. Washington, DC: General Accounting Office. Webber, S.S. & Donahue, L.M. (2001). Impact of highly and less-related diversity on work group cohesion and performance: A meta-analysis. Journal of Management, 27, 2, 141. Retrieved November 12, 2004, from InfoTrac database.

Gender, income and wealth Essay

Gender is a term that has been used many times to describe the different social roles that men and women play in the society. It is also used to explain the biological difference between a man and a woman. However, gender violence, whether on men or on women varies with different communities. Even up to date, there are some societies that still emphasize on the roles and tasks that only men or women can do. Scientific studies on the social life of humans have shown that we are the ones who create inequality amongst ourselves by defining the roles that we should take and leaving those that we don’t want to others. Gender difference is however important because it gives the rights and privileges to both women and men. But if viewed from a negative perspective, gender inequality can be defied as a world wide problem. Gender is one of the many determinants of what income a person should be given. In some countries, it is easy for men to get well paying jobs over women. This is especially the case in the developing countries; where the level of education does not really matter when it comes to job hunting. The situation gets even worse where the big jobs can only be given to the men because it is believed that they are better at decision making than women. Statistics have proved that 46 percent of all labor consists of women. However, women represent 75 percent of all the laborers with the lowest income or wages, and only 13 percent represent women of the best paid laborers. The gender factor is also seen to take effect at many homes, where many people believe that a husband should be earning more than the wife. Many husbands feel inferior, especially when they are unable to provide for their families and the wives take on the role of the provider. They believe that they should be the heads of the family and should be in charge of the major activities, including making important decisions. The fact that wives should be submissive to their husbands should not be mistaken as a reason to be discriminated. In general we can say that the world is facing major challenges because of gender inequality. (Karuna Jaggar, 2007) It is not so easy to measure the relation of gender to wealth. This is because most of the wealth is common within members of the same house hold, which consists of both a man and a woman. However, it is a fact that men are likely to own more assets than women. Women don’t normally own such investments as bonds, stocks or other financial assets as much as men do. Furthermore, most men have retirement accounts, while most women do not have such accounts, and in addition to that, the pensions of women in most cases are less than those of the men. The gender factor also shows that non married households are not as wealthy as the married households. Also, divorced women contribute more to the labor market as compared to the married women. Married women will feel financially secure because of their husbands, but after they are divorced, their economic condition is affected a lot. The same case applies to widowed women. However, divorce does not have a big effect on the men as it has on the women, because they are always working so their wealth is not affected so much. Women who have never been married own the least wealth of all the house holds. They are said to own only a quarter of the wealth that the non married men own. From the late 1980s, the women initiatives have been helping the women to improve their financial security by advising them to start up small micro enterprises. The reason behind the start of the businesses is because they have very low start up costs, and are hence affordable to the women. Micro enterprises are competent, marketable, and require simple management by the owners. These businesses help women with low wealth and poor incomes to improve their financial status. (Karuna Jaggar, 2007) In general, we can say that gender inequality is a factor that is pulling the efforts to civilization behind and needs to be addressed. References 1) Chang, Mariko, 2007, His and Hers: Explaining the Gender Wealth Gap, retrieved on 1/30/2009 from http://www.allacademic.com/meta/p109260_index.html 2) Edlund Lena, Kopczuk Wojciech, 2007, Women, wealth and mobility: National bureau of economic research, New York, Cambridge press 3) Karuna Jaggar, 2007, The Race and Gender Wealth Gap, retrieved on 1/30/2009 from http://urbanhabitat.org/node/2815

An Introduction to the Bell Curve

A normal distribution is more commonly known as a bell curve.   This type of curve shows up throughout statistics and the real world.   For example, after I give a test in any of my classes, one thing that I like to do is to make a graph of all the scores. I typically write down 10 point ranges such as 60-69, 70-79, and 80-89, then put a tally mark for each test score in that range. Almost every time I do this, a familiar shape emerges. A few  students do very well and a few do very poorly. A bunch of scores end up clumped around the mean score. Different tests may result in different means and standard deviations, but the shape of the graph is nearly always the same. This shape is commonly called the bell curve. Why call it a bell curve? The bell curve gets its name quite simply because its shape resembles that of a bell. These curves appear throughout the study of statistics, and their importance cannot be overemphasized. What Is a Bell Curve? To be technical, the kinds of bell curves that we care about the most in statistics are actually called normal probability distributions. For what follows we’ll just assume the bell curves we’re talking about are normal probability distributions. Despite the name â€Å"bell curve,† these curves are not defined by their shape. Instead, an intimidating looking formula is used as the formal definition for bell curves. But we really don’t need to worry too much about the formula. The only two numbers that we care about in it are the mean and standard deviation. The bell curve for a given set of data has the center located at the mean. This is where the highest point of the curve or â€Å"top of the bellâ€Å" is located. A data set‘s standard deviation determines how spread out our bell curve is. The larger the standard deviation, the more spread out the curve. Important Features of a Bell Curve There are several features of bell curves that are important and distinguishes them from other curves in statistics: A bell curve has one mode, which coincides with the mean and median. This is the center of the curve where it is at its highest.A bell curve is symmetric. If it were folded along a vertical line at the mean, both halves would match perfectly because they are mirror images of each other.A bell curve follows the 68-95-99.7 rule, which provides a convenient way to carry out estimated calculations:Approximately 68% of all of the data lies within one standard deviation of the mean.Approximately 95% of all the data is within two standard deviations of the mean.Approximately 99.7% of the data is within three standard deviations of the mean. An Example If we know that a bell curve models our data, we can use the above features of the bell curve to say quite a bit. Going back to the test example, suppose we have 100 students who took a statistics test with a mean score of 70 and standard deviation of 10. The standard deviation is 10. Subtract and add 10 to the mean. This gives us 60 and 80. By the 68-95-99.7 rule we would expect about 68% of 100, or 68 students to score between 60 and 80 on the test. Two times the standard deviation is 20. If we subtract and add 20 to the mean we have 50 and 90. We would expect about 95% of 100, or 95 students to score between 50 and 90 on the test. A similar calculation tells us that effectively everyone scored between 40 and 100 on the test. Uses of the Bell Curve There are many applications for bell curves. They are important in statistics because they model a wide variety of real-world data. As mentioned above, test results are one place where they pop up. Here are some others: Repeated measurements of a piece of equipmentMeasurements of characteristics in biologyApproximating chance events such as flipping a coin several timesHeights of students at a particular grade level in a school district When Not to Use the Bell Curve Even though there are countless applications of bell curves, it is not appropriate to use in all situations. Some statistical data sets, such as equipment failure or income distributions, have different shapes and are not symmetric. Other times there can be two or more modes, such as when several students do very well and several do very poorly on a test. These applications require the use of other curves that are defined differently than the bell curve. Knowledge about how the set of data in question was obtained can help to determine if a bell curve should be used to represent the data or not.