Recent orders
Preparing for an assignment 2
Preparing for an assignment 2
Your Name
Course + code
Professor
University/College
Date Presented
Part 1 – The case study experience (450-550 words in length)
When I got the job I was required to tackle and submit, I had to get it done in good time. After getting it, I read it carefully to understand what was required of me. I had to preview the information give on the assignment. When I had done that, I had to identify all the required materials to make sure I had all I required before I started on my job. I looked at any work that could be relevant to my assignment. Then I had to make sure I had all these materials eight her in soft copy and hard copies were possible. I believe reading a hard copy is relatively better and easier. When this was done, I went through the job in order to decide what my first step could be, to understand it in details and highly the key information that was given in the job. Then I had read all the materials I had looked for, and learn as much as I could from the. I had to ensure I am well equipped with the know-how before I set to do the paper. Then I had to go through and understand the marking model that would be used to range how well or poorly I had performed in the paper. I had leant what a high performer would have to write, who would be termed as a medium performer and what I would write and have it rated as poor and hence a fail. The fail had to be avoided at all cost. It was also essential to understand the academic writing language that has to be used. In most cases, in academic writing, a third person language is used but in some cases you may be directed to do otherwise. It is essential to keep this directive, as it can be used to rate my performance. I had to read the assignment again to make sure I am well aware of what is required of me. So now it was time to write. I had to sit down and write according to the directives of the professor. I knew very well I had to write the paper objectively, making sure I am giving all the relevant information required of me. This I knew very well is what would present my mind and thinking to the marker. What I write is what says how much I had studied and prepared for a given paper. I had to make sure I had presented no negative information about other people; I had to make sure it was all positive. However, sometimes, I thought, it would do no harm writing a few negative things about an individual, when needed to and when what you say is true. It, however, has to be made sure that nothing is personal or meant to attack the other person. When I had written down all the main point I needed to write my paper, I brainstormed on the requirement with friends. This is critical in order to ensure I have what is only relevant and what would make me perform well. Then I had to write down the final copy that had to be submitted for marking. Making sure it was in the required format. Then I had to go through the paper again to correct all the errorsPart 2 Integration of theory with experience – (450-550 words in length)In preparing my paper, I had to use the conceptual review theory. By this, I choose to concentrate on the job idea and analyse it unit by unit other than getting information about the whole paper all at once. It was critical to making sure got the information that was needed in good time for a job to be of high quality. To start with, I had to locate the relevant research and literature. Where I could get any information that would help me I tackling the paper. Then I treated the understanding of major communication theories with quality. In handling an assignment, what is important is communicating with the marker. If you do not get that information to him through good communication, he cannot be able to know whether you understood what was needed of you. Then I closely criticized the research I had carried out trying to point out any mistake I could have made. I had to correct the errors and do away with any information that I found not well convincing to use in the job. When I was sure what I had was what I needed, I proceeded to write a paper. Here what I had to do was compare and contrast some of the major information models looking at both the negative and positive sides. After this process, I had to settle for the best. In preparing the paper, I had to allow maximum space for class performance. For a class presentation, adequate space has to be allowed to make sure we leave space for creativity. It is an important thing to ensure we leave space to allow us to be flexible in our performance, making sure we can always incorporate class contribution, when it is right, into our work. The format of presentation is also essential. I had to make sure my job can be presented to encourage dialogue with the class ensuring all the students understand what I present to them. This can only be ensured by engaging them in the performance, giving them chances to ask questions and make a contribution. We must also allow them to challenge what it is that we have. I made sure that my study was up to date by using only works published in the recent years for my study. It is crucial to do to make sure we offer only relevant information for marking. Using works written long ago would mean we might be presenting information that is outdated and passed by time. It is hence essential to ensure what we are putting the work we have done; we have the most up to date information. Also before the performance, it was critical to ensure I give the discussion material to the class 8 days before the actual performance. This is intended to just ensure that the class is aware of what we intend to discuss and have them read on the relevant issues. This would mean they are able to make their own contributions, a thing that is essential in the learning process. It would also give them a chance to make corrections. The value of this process is to learn and, therefore, it is important essential to have the student correct me where I go wrong.Part 3 Personal reflections – (270-330 words in length)For the work I did, I leant that the paper I write must give a review of the idea or the theory at question. My writing had to be expanded and written according to a well researched information. Ascertaining that the information is varied was a key thing to making sure I pass my paper. In finding the literature, I had to make sure I limit my research to as little scope as I could. This was to make sure that I could easily manage the business that I was doing. It would help me to ensure that I do not rule out some important event or information that needed to be written down as not needed. If I handled the whole lot like one, I thought, it would make it a hard thing to ensure that I look into every aspect of the issue to be discussed. It was also necessary to ensure that I outlined the paper and formatted it as required. It was important to ensure that the paper was well divided into clear units that would make marking easily. For instance, there had to be a clear introduction of the work. Clearly defining what you intend to do in your job to make sure I do not move out of the course am expected to follow. Then it is also important to define of the concepts you are using at in dealing with the job. I had to tackle the business giving relevant example where necessary in order to make sure there is clarity in our business. It was also necessary to discuss the concept within the context not what I have not research. All the technical details of the paper the paper should had to be made clear and it was also crucial to ensure the paper was handed in as was directed by the administrator
References
Reisenberger, A & Dadzie, S (2002), Equality and diversity in adult and community learning
– a guide for managers
Theoretical Review Assignmenthttp://www2.hawaii.edu/~tkell/611/review.htm. retrieved
on 24th April 2014
Preparing Audit Plans
Name
Professor
Course
Date
Preparing Audit Plans
A. Internal control is a procedure “effected by an entity’s board of directors, management, and other personnel designed to provide reasonable assurance regarding the achievement of objectives “with particular interest in the following categories:
Reliability of financial reporting,
Effectiveness and efficiency of operations,
Compliance with applicable laws and regulations
Interrelated components
Some of the other components that are related to internal control consist of:
Control environment
This is one of the vital components as it sets the tone for any organization, thus influencing the control perception of its people. It is the basis for every single one of the other internal control components giving discipline and composition. An auditor should strive to obtain ample awareness of the control environment so as to understand “management’s and the board of directors’ attitude, awareness, and actions concerning the control environment.” The auditor ought to pay more attention to the substance rather than forms of controls. The reason behind this is because some management may put into place some sort of official code of conduct but act contrary thus violating the code.
Risk assessment
An entity’s risk evaluation for fiscal reporting intention is its detection, scrutiny, and management of threat significant to the preparation of fiscal statements that are comparatively presented in compliance with by and large acknowledged accounting principles. For instance, risk evaluation might concentrate on how the entities think about the likelihood of unrecorded dealings or recognizes and analyzes momentous approximates recorded in the fiscal statements. Risks related to reliable fiscal reporting also relate to detailed actions or transactions. The risks can be as result of a variety of factors either implemented by the management or the major stakeholders.
The risks which are relevant to financial reporting might include both internal as well as external factors that might arise and adversely affect an organization’s capacity to commence record, process and report fiscal data. Risks can either arise or change as a result of the following factors:
New personnel
New technology
Corporate restructurings
Rapid growth
New accounting pronouncements
New business models, products, or activities
Changes in operating environment
In that view coming up with a comprehensive audit report will prove difficult due to the fact that the credit ratings levels have not been checked. Furthermore there have been instances where abnormal discounts have been given. This makes it difficult to estimate the amount of money that has either been lost due to the unchecked ratings or the abnormal credits given. The auditor will have to work with estimates which may not be viable.
b. Annual audit engagement of a tractor retailer
The purpose on an audit engagement is to facilitate independent expert public accountants to provide an outlook on the “fairness of the client’s financial statements.” Most f the time it is something that proves to be quite difficult. Audited fiscal statements are the acknowledged way which a lot of business corporations account to the shareholders, bankers, creditors and to government.
The auditors’ task is to articulate an opinion on those financial statements. The auditors have to plan the audit to attain logical assertion that the fiscal statements are free of mistakes. Through the scrutiny and assessment of the company’s structure of internal control the auditor can detect misstatement. This task can be carried out by inspection of documents, inspection of resources, making enquires inside and outside the company, as well as by use of other generally acknowledged auditing procedures. The auditors will collect data required to find out whether the fiscal statements gives a fair depiction of the company’s fiscal situation and its actions throughout the period of being audited.
In regards to the issue of preparing an annual audit report for the tractor retailer coming up with a proper report may be a challenge based on various factors. The first is that there have been problems facing the rural industry for about six months furthermore the prospects of the situation improving is not certain. In that aspect the financial situation of the company can not be ascertained, this puts the auditor in a very difficult situation of being able to properly give his opinions.
C. New management compensation scheme
Corporate restructurings is one of the factors that can affect adversely affect an organization’s capacity. Such an occurrence may also affect the auditor’s job as it will mean analyzing the fiscal reports with regards to the new developments. Introducing a new compensation scheme that was not there before might affect the firm in various ways. If the firm has not experienced a rise in the profits margins, then the scheme might affect the profits, which may result in losses for the firm. The other likely possibility is the companies profit margins may remain constant compared to the previous year’s fiscal report even though the firm might have experienced a rise in sales. Such new developments can be affect the work of an auditor in a number of ways; first the auditor will have to assess the risk presented by the new development.
Another change that has been introduced is the issue of the top managers being closely tied with the profits. This will, mean that the auditor will not have a definite salary for the top mangers as it is bound to vary depending on the companies profits. In that case the auditor will have to be very careful with the salaries so as to avoid misstatements. Salaries are part of the expenses of a firm, thus even the salary of the top managers has to be accounted for. It does not matter whether they own the firm or not.
D. Loss of stock
Stock is one of the most vital resources for any organization that is trading in goods. When even a small fraction of a firms stock disappears it may have adverse effects on the overall fiscal report of the firm. This is because the stocks often have fiscal value and forms a very vital part in the firms’ assets. In this particular case where internal audit has discovered that a substantial amount of stock has disappeared. Moreover the people who could have been held responsible have resigned thus making it difficult to find out the exact amount of goods that have disappeared.
In such a scenario the auditor can not be able to come up with a comprehensive fiscal report, due to the fact that the real value of the goods can not be ascertained. In that case the auditor will have to work with estimates that can not be substantiated. Such a fiscal report may fail do deliver the right picture of the fiscal condition of a firm.
The elasticity of demand for a perfectly
The elasticity of demand for a perfectly competitive firm is −∞ because in a perfectly competitively industry there is free entry and exit.
True. This is because in a perfectly competitive market structure there are no barriers in entry or exit at the industry. Therefore there are infinite buyers and sellers in the industry willing and able to buy and sell at a certain price. Therefore, a single firm cannot have an influence on the price of commodity in the entire industry. Additionally, a firm, no matter how large it may be, it is small when compared to the entire market and thus no matter how much output it generates, it cannot have an influence on the price of commodity. Of course the size of the firm is assumed to be small and it is this assumption that lends credit to the nature of elasticity of demand for a perfectly competitive firm. Since the perfectly competitive firm faces more than one competitor in the market, it can only set its output but it cannot determine the price for the output since if it sells the output at higher price than normal, it will not be able to make a sale and if it desires to sell its output, it will draw all the buyers in the market. The firm therefore has to be a price taker than a setter and only regulate on its output making the price elasticity of demand for the firm to be horizontal.
A monopoly will always produce on the portion of the demand schedule which is more negative than -1.
True. This is because a monopoly has its optimum level when the marginal revenue is equal to marginal cost. Therefore, if a monopolistic firm produces as not scheduled the marginal cost will be also equal to negative. Again when the prices are at the upper portion of the monopoly demand curve the monopoly firm will have the ability to earn a supernormal profit.
The demand curve for the monopolist is down-sloping, which causes the marginal revenue curve for the monopolist to lie below the monopolist’s demand curve and the monopolist has to equate marginal revenue with marginal cost in order to maximize profits.
A monopoly always faces a cross price elasticity for the products it sell which is positive and greater than 1.
True. Cross price elasticity usually measures the response change on the quantity demanded with the change in price. A monopoly firm is the only firm that produces one specific product that has no any close substitute. Therefore, if the firms decides to increase its prices the quantity demanded will also increase as well, since the buyers will continue to buy at the new price due to lack of close substitute. This makes cross price elasticity of a monopoly firm will be positive and greater than one.
The graph above gives an illustration of the short-run demand curve for the monopolistic firm. In the short-run, the firm does all to maximize its profits by only producing output at a level where the firm’s marginal cost is equated to marginal revenue. It can be seen that the firm easily makes supernormal profits in the short-run when the selling price is greater than average cost hence the shaded area denotes all the supernormal profits the firm generates. This however attracts new entrants into the industry and more substitutes to the firm’s products are supplied into the market. This drives the firm’s demand curve to be more elastic and shifts it further to the left driving down the prices and the meantime eroding the supernormal profits. As it can be seen, the cross-price elasticity will continue growing making the competitive force more live and in the long-run driving down the prices of the monopolistic competitor.
In a monopolistic competition market, a firm sells its products which are deemed to have real or perceived non-price differences. Nevertheless, the non-price differences may not be so great as to completely eliminate substitutes. In fact it is not easy to find a product that does not have its substitutes. Due to presence of these substitutes, the cross-price elasticity of demand for a monopolistic firm is positive rather than zero. It would be expected that it should be zero but the highlighted technicalities that make it impossible to completely eradicate substitutes makes a monopoly to experience a cross price elasticity of demand that is positive.
Usually OPEC countries by targeting price and changing quantities. Their behavior can therefore be analyzed through the lens of either the Cournot or the Bertrand model.
The Bertrand model is a model used to describe the interactions between firms that set prices and the buyers that chooses the quantity at the price set. Cournot model is a model that was formulated to describe the industry structure where firms compete on the amount of produce which they decide independently of each other at the same time. The main aim of OPEC is to secure steady income to member state and also to secure supply of the oil to the consumers. Therefore, there behavior can be analyzed using these two models. Bertrand has an assumption that firms have the same constant unit of production, which means that the average and marginal cost are equal to the competitive price. So as long as the price is set above the unit cost all firms willing to supply any amount demanded will earn a profit on each unit sold. Therefore, this model tends to secure both the suppliers and the buyers so as to OPEC. Cournot model also has an assumption that each firm will aim at maximizing profit such that the firm’s expectation that its output decision will not have an effect on the decision of the other competitors. This model also aims at securing the suppliers and also the consumers by not exploiting either.
OPEC is a form of an oligopoly in the world oil industry and Cournot model would be useful in explaining the behavior of targeting quantity of oil supplied rather than the prices of oil. The Cournot model assumes that OPEC constitutes two competitors that are equally positioned in the oil industry and that the firms compete in terms of the quantity they produce rather than the prices of the commodities. Actually, the behavior of OPEC is construed as assuming that other players in the industry do not make related output decision but rather their output decision is fixed. In this case, the market demand curve is presumed to be linear and the marginal costs are also assumed to be constant. In order to determine the equilibrium of the model, one has to determine how each of the two firms in oligopoly reacts to a change in the output of the other firm.
The equilibrium is reached when a series of actions and reactions lead to a point where a firm is no longer able to react to the actions taken by the other competing firm. For instance, in order to understand this phenomenon on the perspective of the Cournot model we have to create a theoretical situation where we assume that if firm 1’s demand function is defined by P = (M – Q2) – Q1 where M is the market quantity, Q1 and Q2 are the quantities produced by firm 1 and firm 2 respectively.
Firm 1’s total revenue function can be given by:
RT = Q1 P= Q1 (M – Q2 – Q1) = M Q1- Q1 Q2 – Q12
The above function is followed with consideration that the firm will work to follow a profit maximization function of equating marginal cost and marginal revenue. With this in mind, the firm’s marginal revenue function is given by:
Now assuming that the determined market quantity for OPEC (M) is 60 and that the marginal cost CM=12 the single firm OPEC will have to begin the process of profit maximization in the manner indicated below:
RM = CM
M – Q2 – 2Q1 = CM
2Q1 = (M-CM) – Q2
This will elicit a reaction in firm 1 of the following shape:
Q1 = (M-CM)/2 – Q2/2 = 24 – 0.5 Q2
Firm 2in OPEC also to react and does this by reacting following the function below:
Q2 = 2(M-CM) – 2Q2 = 96 – 2 Q1
As the equations above reveal, the behavior of OPEC countries can be explained well by the equations by solving them graphically or simultaneously to establish the equilibrium quantities.
The Bertrand model can also be used to explain the behavior and in fact it is just similar to Cournot model only that the Bertrand model lays emphasis on price of the oil rather than the quantity supplied to the market. Based on the Bertrand model, OPEC firms or players would produce at a constant marginal cost and that the players in the OPEC (which are still assumed to be two in number) choose prices say P1 and P2 simultaneously. The model assumes that if the two set prices equate then the sales are even split. In this model, the only equilibrium point is given by P1 = P2 = MC; where MC is the marginal cost.
A feature of the kinked oligopoly demand curve model is that price may be stable when cost for a single firm changes, but may change rapidly when the whole industry is faced with a change in cost conditions.
True. The conjectural assumption of the kinked demand curve in oligopoly states that, if a firm increases its price beyond the existing current price, the competitors will not abide by and the acting firm will lose market it share. On contrary, if a firm lowers its price the other firms will follow so as to retain their market share and the firm’s output will increase marginally. These assumptions therefore formulate the kinked demand curve of firms in oligopoly.
Part B.
The level of output that the monopoly will maximize its profit is when the marginal revenue curve is equal to marginal cost curve. Since that is the point of profit maximization.
If a monopoly is to set a common price for all the customers, it will set at the profit maximization point which is MR=MC. The price when the marginal revenue will be equal to marginal cost will be the common price.
In market one the monopolist will sell at price B and in market two the monopolist will sell at price J.
The marginal revenue for market one will be MR1 and the marginal revenue for market two will be MR2
If price discrimination is possible the monopolist would increase its profit by selling at the point where the marginal cost (MC) is equal to the average total cost (ATC) since that is the point of profit maximization.
The monopolist will set the price a C. and the amount sold will be at quantity M.
9.
Under a competitive industry the price will be B and the output will be Q
Under monopoly the price will be A and the output will be R.
The deadweight loss will be area PLJ
Area AORJ
Area ABGF
Because in a monopolistic industry there are no competitors they are the only suppliers and sellers therefore there no external forces in the for the firm that may compel its ability in terms of selling and producing while on the other hand, competitive industry has some external forces compelling its ability to sell and produce goods. Therefore, this makes the two industries have different conditions.