Virtue Ethics Essay Example for Free

Virtue Ethics Essay Virtue Ethics and the view that ethics should be wholly concerned with a person’s attributes based on the holistic theory of Aristotle and his Golden Mean, is a newly accepted theory, which looks at a person’s virtues and not their actions. It is a view that directly contrasts with the theories of Kant and Bentham, which focus on actions as opposed to the actual person making those actions. Although the deontological nature of Kant’s theory does partially contradict the teleological constitution of Bentham’s theory, they both focus on the moral decision that a person chooses to make and these theories both clash with Virtue Ethics, in respect that Virtue Ethics looks at why and what made the person make that decision. Whilst it is important to focus on the person behind the action, a more consequentialist view of ethics is a better functioning theory in today’s society due to the emphasis placed on the result of actions and the many cultures in the world, where virtuous acts would be difficult to define. In this essay, I will explore these contrasting ethical positions to prove that ethics should be more concerned with what you do than who you are. Aristotle’s theory is ultimately based on the idea of reaching eudaimonia, and this was something which, unlike the theories of Bentham and Mill, was sought for itself rather than as a means to some other end. The virtues that lead to this â€Å"happiness† are described by Aristotle to be like a habit, they should be learnt and acquired making one a better person, meaning that they will make the correct moral decisions. Using â€Å" Virtue Ethics† as an approach to life is taken up by many parents across the globe, as they act to make the child become a better person. However, one must question whether Virtue Ethics is a logical means of moral explanation as perhaps just because a person has many desirable virtues, it doesn’t certainly follow that they will make good, ethical, moral decisions. The aim of reaching Eudaimonia highlights the teleological aspect of Virtue Ethics as it is Aristotle’s GOAL for life. However whereas in consequentialism actions are taken in order to be happy, Aristotle believes that we should be happy in order to do something else. Aristotle arrived at the answer of whether an act was virtuous or not by using his â€Å"Final Cause† argument. In this, he believed that everything has a final good, which is achieved by fulfilling the purpose for which it was designed. Aristotle claimed that we all learn to have virtues that are â€Å"good† and will help us to obtain Eudaimonia. However, a major flaw of Virtue Ethics, leads from this, as Virtues are liable to change. The attributes that Aristotle valued are not necessarily what is valued in today’s society. He also talked about the doctrine of the Golden Mean. This aspect of virtue ethics is, for me, what makes it a potentially credible theory, as it takes into account human emotions, recognising that we can sometimes be extreme. This is explained by the idea of vices versus virtues, in that we should not have extremes of virtues as they are no longer â€Å"good†. However, surely this makes virtue ethics hard to follow, as there are no clear rules of what to do in a moral dilemma, instead just telling us to be a balanced person. By being a balanced person, Aristotle concludes that people will also be moral After Aristotle Virtue ethics was dismissed until Elizabeth Anscombe revived it in 1958, criticising Kant and Bentham claiming they are in their ivory tower, with theories that are not in touch with todays society. This point made by Anscombe really highlights the changeability of ethics, as ethics can change with society. The point about morals adapting to society reflects MacIntyre’s view on Virtue Ethics as he makes it more current and recognises that virtues must operate within a community for them to be â€Å"virtuous†. Contradicting Virtue Ethics are the theories that hold that ethics and morals should be based on the actions that one takes, such as the theories of Kant and Bentham. The Teleological stance on morals, taken by relativists including Bentham and Mill believe that the consequences of an action define its ‘goodness’. By doing so, relativists ensure that the focus of ethics is on the actions that are taken, which relates to todays society. An example of this is the justice system in Britain Jury’s are not interested in your attributes, or how good a person you are; if somebody has committed a crime (a bad action) then they will be punished for that. Personally, I feel that just because you are a good, virtuous person does not defy you from making unethical decisions, a view that Virtue Ethics contradicts. Unlike consequentialism, absolutism focusses on the motives for the action. By following definite rules, absolutists believe that acts are intrinsically wrong. Kant believes that all his definite rules can be universalised and followed by anybody no matter how ‘virtuous’ they are. These rules are meant to give the best moral outcome, but circumstances occur that when these rules can contradict a deep rooted moral conscience. This is shown with the example of is a murder asked you where your friend was so they could kill them, would you be obliged to tell the truth? This problem is eradicated by consequentialism as each moral issue is treated differently and circumstances, time and place are all taken into account. This is a clear advantage of relativism as opposed to absolutism, because it can change with different societies, and is accepting of other cultures. By focussing on what people do, ethics ensures that people can be held responsible for their actions. The ends of a decision are what really matters in ethics because that is what makes the change to your life, the lives of others or society. Morals need to be based on ends in order to take into account these differences. Without basing morals on ends, the same rules would have to apply to everything, all the time which wouldn’t work. Despite this strength of the teleological argument I think it needs to be interpreted with this quote in mind â€Å"when in Rome do as the Romans do†. This way, we avoid the criticism that ‘anything would go’, as within societies people would be clear on the moral guidelines, but unlike absolutism, would not feel condemned if they felt the need to break those guidelines. Virtue Ethics is a good way of life, but I dont feel that is as good for functioning in society as consequentialism.

Importance of Corporate Governance for Fraud Prevention

Importance of Corporate Governance for Fraud Prevention In the era of globalisation, corporate scandals are no longer shocking news in corporate world. A recent corporate fraud has happened in Paris in Societe Generale Bank, where an employee committed a fraud of GBP 3.7 billions. It is not a new story for the corporate world as it has seen cases of BCCI (Bank of credit and commerce internationals), Polly Peck, Maxwell, Allied Irish Bank, Enron, Pamalat, Barings Bank, WorldCom, Xerox and many more. Frauds in Financial statements have become a common area of frauds now days. These frauds have increased the responsibility of auditors and also of government to pass effective laws so that scope of committing frauds can be reduced. Corporate Governance in any company is for that only. Companies are bounded by corporate governance guidelines and procedures, so that chances of fraudulent activities can be reduced. Meaning of Corporate Governance According Cadbury Report 1992, Companies are controlled and directed by the system of corporate governance. In companies, Corporate Governance is the responsibility of Boards of Directors. Auditors and directors are elected and appointed by the consent of shareholders, which give them the feeling of satisfaction that a suitable corporate governance system is working to reserve their rights and benefits. Corporate governance set the relationship between management, board, shareholders and other stakeholders. Corporate governance enables directors and auditors to manage their responsibilities towards shareholders and wide stakeholders of the company. In contrast , corporate governance increased the confidence of shareholders that they will get an reasonable return on their investments, whereas for the stakeholders it provide the assurance that company manages its impact on society and environment in a responsible manner. Corporate governance include the combination of various laws, regulations, listing rules and voluntary private sector practices that facilitate the company to draw more capital, execute efficiently, generate profit and meet other legal obligations and general societal expectations. Corporate governance is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company. Corporations pool capital from a large investor base both in the domestic and in the international capital markets. In this context, investment is ultimately an act of faith in the ability of a corporations management. When an investor invests money in a corporation, he expects the board and the management to act as trustees and ensure the safety of the capital and also earn a rate of return that is higher than the cost of capital. In this regard, investors expect management to act in their best interests at all times and adopt good corporate governance practices. Need for Corporate Governance A corporation is a body of various stakeholders include customers, employees, investors, vendors, government and society. It is necessary for any corporation to present transparent and true pictures to its shareholders. Today, this has become essential for the business world because every company wants to enter into the global capital and also want to draw the attention and also keep hold on the top human capital from different areas of the world. Company want the partnership with different vendors on the big collaborations and want to be in harmony and peace with the rest of the community. A corporation will never succeed until and unless it demonstrate and also it embrace the ethical conduct. Corporate governance in business is in relation to the ethical conduct. Here, the ethic is very much concerned about the different codes of principles and the values which help the person to differentiate and choose between the right and the wrong and as a result, help to choose from the other alternatives. Additionally, the parties which are involved in the conflicting interest give rise to the ethical dilemmas. Therefore, keeping in mind the principles which are totally based on culture, context and the value of the company, the manager make their decisions. For a business which is running good, it is very much important that it always go in the good direction by keeping the stakeholders expectations in mind. Well, corporate governance is not just the law,it is much more than the law and it cant be imposed and run by the legislation alone because its different parts comes from the managements mindset and their culture. The affairs of the organisation are conducted by the corporate governance in order to provide the fairness for all of the shareholders which comes from these three- accountability, integrity and the openness. To certify standards, the legislation can and should put down a general framework which is the â€Å"form†. The integrity and the credibility for process will finally determined by the â€Å"substance†. The substance is inevitably connected to the managements ethical standards and mindset. The corporations should always need to identify that the prosperous development and the growth of the company require the full support and the cooperation from their stakeholders and this is possible only when the corporation is following the best practices of the corporate governance. Here for shareholders, management of the corporation needs to perform as the trustees and avoid the difference of benefits among various sections of stakeholders, particularly between the owner and the other stakeholders. Corporate governance becomes the key element in order to improve the firms economic efficiency. With the help of the corporate governance, the corporations keep in mind the interest of the ample series of constituencies, and also of community where they are operating. Additionally it ensure that the board is accountable for shareholders. As a result, it guarantees that the corporations as a whole are operating for the benefit and profit of society. Though by taking the advantage of asymmetry between the shareholders, huge amount of profit can be made in short run, and by balancing the interest of all shareholders itself guarantee the growth and the survival of the corporation in long run. Heavy cost can be incurred if there is failure to execute the good governance which can be the regulatory problems. Many proofs suggest that those corporations or companies which do not implement and follow the significant corporate governance measures can give the considerable risk premium in the public market at the time when it is competing for the limited capital. In recent times, the analysts of the stock market received a high appreciation from the market for showing the relationship between the returns and the governance. For this context, different reports do not only talk about the governance in common but they also recommend the explicit alter investment which is totally based on weakness or strength of the infrastructure of the corporate governance of the company. The best thing about the credibility which is given by the procedures of a good corporate governance is that it help to provide the confidence of clients (national international) in order to draw more ‘pat ient, the capital for the long term, and also help to cut down the capital cost. All this increased attention is because of arises of the financial crises in different parts of the world. Like, the financial crises in Asia brought the attention of the corporate governance subject in Asia. Recently, the scandals in the US also disturb the unsatisfied corporate landscape and peace which are unexpected in a sense. These scandals lead to a new set of initiatives in corporate governance in US and trigger a new discussion in the United Kingdom with European union and in the rest of the world. Meaning of Financial Statement Fraud Financial statements are the picture of financial position of a company which includes balance sheet, profit and loss accounts, and trading accounts. Frauds here, means deliberately and intentionally done activities for self interest and cheating the second party. Under the Statement of Auditing Standards (SAS) 1101, it is stated that â€Å"Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognizing that fraud or error may materially affect the financial statement†. Accounting to Benny K.B. Kwok 2005, Misstatements in financial statements can arise from either by error or by fraud. Error refers to an involuntary misstatement in financial data of a company which include omission of an amount or disclosure, such as A mistake in gathering or processing data from which financial statements are prepared; An incorrect accounting estimate arising from oversight or misinterpretation of facts; and A mistake in the application of accounting principles relating to measurement, recognition, classification, presentation or disclosure. The usage of both the dishonesty to get the financial advantage illegally and intentionally falsification also disturbing the statements, leads to fraud which can be done by any person from the management, or the employees or any third party. In fraud following things involves â€Å"Falsification or alteration of accounting records or other documents; Misappropriation of assets or thefts; Suppression or omission of the effects of transaction from records or documents; Recording of transaction without substance; Intentional misapplication of accounting policies; Wilful misrepresentations of transactions or of the organizations state of affairs. Financial reporting in the UK is based on three principles:- Companies Act 2006 Accounting standards or specifically Statements of Standard Accounting Practices(SSAP) and Financial Reporting Standards And the requirements of the Stock Exchange. Companies Act 2006 According to the Companies Act 2006, accounting records maintained by every company must: Be sufficient to show and explain the companys transactions; Disclose with reasonable accuracy at any time the financial position of the company at that time and Enable the directors to ensure that any Profit and Loss account or Balance Sheet gives a true and fair view of the companys financial position. Accounting records should contain day to day entries of all transactions, full record of companys assets and liabilities and full information regarding companys stock. According to Companies Act 2006 under section 145(B), if the financial statements of a company do not meet the requirements of the Act, the court may ask for revised financial statements and the cost of re- preparing financial statements would be bear by the party in abuse of preparing defective or false financial statements. Accounting Standards In UK, all accounting standards till 31 July 1990 used to be called Statements of Standards Accounting Practice (SSAP) which was formulated by the Accounting Standard Committee (ASC). SSAP was then gradually replaced by Financial Reporting Standards (FSA) produced by the successor to the ASC, the Accounting Standards Board (ASB). UK Accounting Standards laid down the guidelines regarding how particular types of transaction should be reflected in the financial statements of a company to present true and fair picture of companys financial position. The stock exchange listing requirements-Yellow Book Rules which governed the listing of securities of the stock exchange in the UK are known as the Yellow Book. According to Yellow Book, listed companies are required to publish their financial statements within six months of their financial year end. Most of the listed companies however, publish their financial statements quarterly. It is necessary from the point of view of shareholders because shares of companies are in the hands of general public and they need continuous information regarding firm financial position so that they can take right investment decision. According to SSAP December 1999, â€Å"the objective of financial statements is to provide information about an organizations financial performance and financial position that is useful to a wide range of readers for assessing the stewardship of the organizations management and for making economic decisions†. For the purposes of this discussion, we are talking about financial statement fraud in a major public company context; a context that can affect confidence in the financial system. We are not talking about what might be called internal fraud or a great many other types of dishonest conduct in corporate life. This is about projecting a false state of affairs on a large scale and in a very public context. DEFINITIONS Corporate governance is about promoting corporate fairness, transparency and accountability Wolfensohn, president of the Word bank, June 21, 1999. Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance, OECD April 1999. OECDs definition is consistent with the one presented by Cadbury [1992]. According to Elliot and Willingham, â€Å"financial statements fraud is management fraud, the deliberate fraud committed by management that injures investors and creditors through materially misleading financial statements†. Key words used in the research: Currency option: In this option the possessor has the right to sell or buy the currency at a particular phase of the time at a particular price. In this the possessor doesnt have the obligation. Currency forward: The prices are locked in this contract so that the counterparties can sell or buy the currency on the upcoming or future date. Here the possessor who holds the contract are obliged to sell or buy the currency at a particular future date, at the particular quantity and on a particular price. These transactions are also called as outright forward currency transactions. Option: when the option is exercised to earn profit then it is known as in- the-money option. Call option: In this type of option, the buyer who wants to buy any assets, commodities etc. has the right to buy at a particular period of time but he is not obliged, whereas the seller is highly obliged to sell the assets etc. at a particular time to the buyer. A premium has to be paid by the buyer to hold this right. This option is carried out when the strike price is below the price of the market of the agreed commodities. Put option: In this option, the seller has obligations to buy the commodities, assets etc. from the buyer whereas the buyer has the right, but there is no obligation, to sell the agreed commodities, assets etc. at a particular period of time for a particular price. This option is carried out when the strike price is more than the price of the market of the agreed commodities. Prime broker: The person who settle down the cash and security for their clients in the financial market by charging them fees is known as the prime broker. They manage the money of their clients by using different strategy in the market. Research Questions and Objectives Research Questions Financial statements frauds -ethical or technical issue? How firms manipulate their financial statements? What are the motives of financial frauds other than monetary? What is the role of corporate governance in controlling these frauds? Research Objectives: To analyse the major areas of frauds. To examine role of top management in fraudulent practices. To analyse the efficacy of various acts and rules passed for enhanced corporate governance. To analyse the importance of financial statements in investment decision making. To explore the causes and consequences of financial statements frauds. Scope of study: Research study will be restricted to European countries financial statement frauds as US market is more explored than European market. Research will examine and critically analyse the case study of Ireland based bank named Allied Irish Bank. Remaining chapter shall follow the following planned strategy: Chapter Two: Literature review: It will cover 3000 words and include journals and articles citation. Chapter Three: Research Methodology: It will cover 1500 words. This section will give idea of data collection and also briefly explain limitation attached to it. Chapter Four: Data Analysis: This section will evaluate and analyse the data and follow the discussion. Chapter Five: Conclusion and Recommendations: This section finally concludes the research and provides recommendations. CHAPTER TWO Literature Review 2.1.1. Agency problem and Corporate Governance 2.1.1.1 Separation of ownership -origin of agency problem Agency problem resulted from separation of ownership from control (Berge Means 1932; Jensen Meckling 1976) is still prevailing around the world. Findings have proved that firms having weaker corporate governance policies and structure face greater agency problems; which allow senior managers to cook their recipe of extracting more private benefits and finally firm perform worse at all levels (Core at al. 1999). Evidence for such a weak corporate governance structure and higher agency problems can be found from Asian Financial Crisis in 1997. At the time Asian Crisis 1997, firms which had good corporate governance structure provided better protection to shareholders especially to minor shareholders and performed better during the crisis (Joh 2003 and Mitton 2002). In countries like USA and European countries especially UK, agency problems are higher as evidenced from corporate scandals in USA and UK for example Maxwell Corporation (1991), Polly Peck (1991), BCCI (1991), Enron (2001) , Barings Bank (1995), Parmalat (2003) and many more. The recent scandal happened in Societe Generale Bank of Paris 2008, in this also agency problem was the main reason for the frauds committed by the employer of the Societe Generale Bank of Paris. An Agency problem is very crucial problem which had taken birth during 19th century. Agency theory is defined as a â€Å"contract under which one party (the principal) engages another party (the agent) to perform some service on their behalf† (Jensen and Meckling 1976). The problems arises when the agent do not work in the welfare of principal. More cases of frauds, where involvements of companys top management were high, coming into light and the simple reason is principal agency problem. In the case of HealthSouth, CEO Richard Scrushy had instructed senior managers to show fraudulent income of $2.5 billion in order to meet Wall Street expectation. 2.1.1.1.1 Agency Cost Agency costs are another issue which is bear by the principal for the frauds committed by the agent. The result of agency problem is reflected in companys share price which can be seen as the loss to shareholders in terms of declined in the price of shares in stock exchange.Jensen and Meckling (1976) explained agency costs as the sum of monitoring costs, bonding costs, and residual loss. Monitoring cost:- In UK companies are required to follow Cadbury (1992) and Greenbury (1995) reports for corporate governance. Monitoring cost are paid by the principal to monitor the behaviour of agents. Monitoring cost generally include costs of conducting auditing, writing executive compensation contracts and sometimes cost of firing the fraud employees and other top managers or executives. All these costs are paid by the principal, but Fama and Jensen (1983) argued that these agency costs which are initially born by the principal, ultimately borne by the agents as the compensation of agents are adjusted to cover these costs. Some researcher further argued that monitoring will restrict the managerial initiative (Burkart, Gromb and Panunzi 1997). Criticisers of Cadbury Report (1992) have argued that high level of monitoring may restrict the managerial entrepreneurship. Bonding Costs As argued by Fama and Jensen( 1983), monitoring cost ultimately bear by agents which need to set up structure that will act in interest of shareholders or principal , the cost of establishing these set up or system is known as bonding costs. These costs are not always financial in nature; it may include additional information provided to shareholders. Denis (2001) further argued that â€Å"the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests†. In UK, bonding structure which is imposed on closely held companies management, require companies to distribute all income after meeting all business expenses. Earning retention is big problem in UK; the mechanism of bonding may reduce the scope of this problem. Residual Loss â€Å"Residual loss arises because the cost of fully enforcing principal-agent contracts would far outweigh the benefits derived from doing so. Since managerial actions are unobservable ex ante, to fully contract for every state of nature is impractical. The result of this is an optimal level or residual loss, which may represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems.† (Patrick McColgan 2001:8). 2.1.1.2 Stewardship theory Agency theory is more dominant in the perspective of corporate governance mechanism, but this view has been criticized by many writers (Hoskisson et al. 2000; Blair 1995; Perrow 1986). Agency theory had limitation in explaining sociological and psychological involved in principal agent conflicts (Davis Thompson 1994; Davis et al.1997). Stewardship theory assume mangers as good stewards of the firms. Managers act diligently in order to attain high corporate profits and shareholders returns (Donaldson Davis 1994). In an empirical study performed by Tian and Lau 2001 in Chinese shareholding firms, they find stewardship theory has received strong support in comparison to agency theory. Further Phan 2001 explained that â€Å"whether the assumptions of Agency Theory can be generalised to emerging markets, with their different sociological, economic, and developmental fundamentals, remains an important research question†. In summary, agency theory has its roots in industrial and organisational economics. Agency theory assumes that behaviour of human being is opportunistic and selfish. Therefore, the theory recommends strong director and shareholder control. It suggests the fundamental function of the board of directors is to control managerial behaviour and try to ensure that managers act in the best interests of shareholders. 2.1.2 Review of Corporate Governance reports In this section, international reports on corporate governance will be critically reviewed which were published in last decades. The international reports considered in this section are as follows: â€Å"Report of the Committee on the Financial Aspects of Corporate Governance† (Cadbury Report, 1992) â€Å"Where were the Directors? Guidelines for Improved Corporate Governance in Canada† (Dey Report, 1994) The General Motors Corporation Guidelines (GMC, 2001) â€Å"Committee on Corporate Governance† (Hampel Report, 1998) â€Å"OECD Principles of Corporate Governance† (OECD Report, 1999) Sarbanes- Oxley Act 2002 After the unexpected corporate scandals of renowned companies like Maxwell (1991), Polly Peck (1991), and BCCI (1991) among others in the UK, the committee for corporate governance under the guidance of Sir Adrian Cadbury along with Financial Reporting Council (FRC), the London Stock Exchange (LSE), and the other accountancy profession has been formed to address corporate governance issues. This report was known as Cadbury report which was first report in UK focused on the aspect of corporate governance such as financial reporting and reviewed the role of boards and auditors. This report was published in 1992. The Cadbury committee report finally draw two major recommendation for the structure of UK corporate board. Cadbury report suggests at least three non executive directors in the board and two of them should be independent from management. The positions of chairman and CEO should not hold by the same person. The purpose behind this set up was to reduce the individual dominance a nd ensuring higher level of monitoring for corporate board by introducing more independence. Beasley (1996) and Dechow et al. (1996) found that â€Å"firms with more independent boards are significantly characterised by a lower likelihood of financial statement fraud and earnings management†. In Canada, during 1994 Dey report was published. This report was the first fully fledged report on corporate governance which a company should follow in order to list on stock exchange. Toronto stock exchange (TSE) adopted these guidelines in 1995 which were laid down by the Dey report. All TSE listed companies required to provide the difference in their corporate governance guidelines and guideline laid down by the Dey report. After Dey Report 1994, other similar reports in other jurisdiction have been published. General Motors Corporation (GMC) in USA published its own corporate guidelines in 1994 after criticising by the shareholders regarding poor company performance and doubtful board practices. These guidelines were developed with consent of GMC board, its shareholders and other activists for corporate governance. These guidelines were welcomed by the institute California Public Employees Retirement System (CalPERS) and by the industry. GMC guidelines become the benchmark in USA for corporate governance. In UK, during 1998, Hampel Committee was formed to review the recommendations of Cadbury report (1992) and the Greenbury report (1995) relating to executive remuneration. The Hampel committee was also formed to cover some gaps by these two reports i.e. Cadbury report and Greenbury report. Hampel report suggests that good corporate governance goes beyond prescribed corporate structures. According to Hample Report (1998:15) on Corporate Governance Sir Hample â€Å"recommend that companies should include in their annual report and accounts a narrative statement of how they apply the relevant principles to their particular circumstances. Given that the responsibility for good corporate governance rests with the board of directors, the written description of the way in which the board has applied the principles of corporate governance represents a key part of the process†. Hampel report drew attention for the approach of box ticking which is a serious issue for corporate governance . It also examined the implementation of Cadbury and Greenbury report and suggested more clear recommendations on policies of remuneration, accountability and auditing. During 1999, Organisation for Economic and Co-operation Development (OECD) laid down principles of corporate governance for the listed companies of member countries of OECD. It cover main subjects areas like rights and equitable treatment of shareholders, role of stakeholders in corporation structure, disclosure and transparency of financial facts and figures and majorly role and responsibilities of board. OECD guidelines become starting point for local policy makers of corporate governance. After the ,shocking scandals of Enron and WorldCom, US congress along with NYSE (New York Stock Exchange) passed the reforms to address conflicts of interest and redefined relationship between companies and auditors. This reform was known as the Accounting Industry reform Act 2002 which is widely known as Sarbanes Oxley Act 2002. The main purpose of this act was to enforce the independence of external auditors. The act also reinforced duties and responsibilities for CEOs and CFOs by imposing strict penalties for misrepresenting companys quarterly and annual reports. The penalty for misrepresentation was personal fines of US$ 1 million or imprisonment up to 10 years or both. Sarbanes Oxley Act has intense effect on the corporate governance policies on US and rest of the world. NYSE also imposed additional requirement for listed companies, under which listed companies must have independent directors in majority and must disclose business code of conduct and ethics for directors, office rs including managers at all level, and employees. Whittington(1993) and Melis, (2004a) argued that â€Å"corporate financial reporting and corporate governance systems are highly correlated, with any improvement in either system having a positive influence on the other, and vice versa† Combined code issued in 2006 replaces the combined issued in 2003. Financial service authority of UK, require listing companies to be obliged by the combined code 2006 and carry out consultation before listing. This new code contains main principles and provisions. Combined code 2006 asks listed companies to make a disclosure statement for code and that should be in two parts. Some of the provisions are not or less relevant for small or new listed companies. Also some provisions do not apply to companies below FTSE 350. 2.1.3 Global findings for adoption of corporate governance guidelines According Stephanie Maier (EIRIS 2005:1) findings, â€Å"Only 25% of US companies separate the roles of chairman and CEO compared with at least 50% forcompanies in other developed economies. Swiss boards have the highestpercentage of independent directors(81%) Germany, Austria and Japanall have less than 10%. Only 4% of companies in Japan haveaudit committees comprising amajority of independent directorscompared to over 95% in the USA,Canada, the Netherlands,Luxembourg, the UK and Ireland†¢ Only 22% of companies in Singaporeand 25% of companies in Hong Konghave meaningful codes of ethics†. Board size: According to EIRIS 2005, average board size is minimum in New Zealand (7.2) and maximum in Germany (22.8). USA and UK comes at rank 7th and 8th with average board size of 10.7 and 11.4 respectively ( see appendices for details). Higgs Review (2003) suggested â€Å"An effective board should not be so large as to become unwieldy. It should be of sufficient size that the balance of skills and experience is appropriate for the requirement of the business and that changes in the boards composition can be managed without undue disruption†. Separation of ownership and CEO According to findings by EIRIS 2005, in UK nearly 97% separate the ownership under unitary board structure whereas in US only 25% companies separate the ownership under the unitary board structure. In Ireland and Luxemb Importance of Corporate Governance for Fraud Prevention Importance of Corporate Governance for Fraud Prevention In the era of globalisation, corporate scandals are no longer shocking news in corporate world. A recent corporate fraud has happened in Paris in Societe Generale Bank, where an employee committed a fraud of GBP 3.7 billions. It is not a new story for the corporate world as it has seen cases of BCCI (Bank of credit and commerce internationals), Polly Peck, Maxwell, Allied Irish Bank, Enron, Pamalat, Barings Bank, WorldCom, Xerox and many more. Frauds in Financial statements have become a common area of frauds now days. These frauds have increased the responsibility of auditors and also of government to pass effective laws so that scope of committing frauds can be reduced. Corporate Governance in any company is for that only. Companies are bounded by corporate governance guidelines and procedures, so that chances of fraudulent activities can be reduced. Meaning of Corporate Governance According Cadbury Report 1992, Companies are controlled and directed by the system of corporate governance. In companies, Corporate Governance is the responsibility of Boards of Directors. Auditors and directors are elected and appointed by the consent of shareholders, which give them the feeling of satisfaction that a suitable corporate governance system is working to reserve their rights and benefits. Corporate governance set the relationship between management, board, shareholders and other stakeholders. Corporate governance enables directors and auditors to manage their responsibilities towards shareholders and wide stakeholders of the company. In contrast , corporate governance increased the confidence of shareholders that they will get an reasonable return on their investments, whereas for the stakeholders it provide the assurance that company manages its impact on society and environment in a responsible manner. Corporate governance include the combination of various laws, regulations, listing rules and voluntary private sector practices that facilitate the company to draw more capital, execute efficiently, generate profit and meet other legal obligations and general societal expectations. Corporate governance is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company. Corporations pool capital from a large investor base both in the domestic and in the international capital markets. In this context, investment is ultimately an act of faith in the ability of a corporations management. When an investor invests money in a corporation, he expects the board and the management to act as trustees and ensure the safety of the capital and also earn a rate of return that is higher than the cost of capital. In this regard, investors expect management to act in their best interests at all times and adopt good corporate governance practices. Need for Corporate Governance A corporation is a body of various stakeholders include customers, employees, investors, vendors, government and society. It is necessary for any corporation to present transparent and true pictures to its shareholders. Today, this has become essential for the business world because every company wants to enter into the global capital and also want to draw the attention and also keep hold on the top human capital from different areas of the world. Company want the partnership with different vendors on the big collaborations and want to be in harmony and peace with the rest of the community. A corporation will never succeed until and unless it demonstrate and also it embrace the ethical conduct. Corporate governance in business is in relation to the ethical conduct. Here, the ethic is very much concerned about the different codes of principles and the values which help the person to differentiate and choose between the right and the wrong and as a result, help to choose from the other alternatives. Additionally, the parties which are involved in the conflicting interest give rise to the ethical dilemmas. Therefore, keeping in mind the principles which are totally based on culture, context and the value of the company, the manager make their decisions. For a business which is running good, it is very much important that it always go in the good direction by keeping the stakeholders expectations in mind. Well, corporate governance is not just the law,it is much more than the law and it cant be imposed and run by the legislation alone because its different parts comes from the managements mindset and their culture. The affairs of the organisation are conducted by the corporate governance in order to provide the fairness for all of the shareholders which comes from these three- accountability, integrity and the openness. To certify standards, the legislation can and should put down a general framework which is the â€Å"form†. The integrity and the credibility for process will finally determined by the â€Å"substance†. The substance is inevitably connected to the managements ethical standards and mindset. The corporations should always need to identify that the prosperous development and the growth of the company require the full support and the cooperation from their stakeholders and this is possible only when the corporation is following the best practices of the corporate governance. Here for shareholders, management of the corporation needs to perform as the trustees and avoid the difference of benefits among various sections of stakeholders, particularly between the owner and the other stakeholders. Corporate governance becomes the key element in order to improve the firms economic efficiency. With the help of the corporate governance, the corporations keep in mind the interest of the ample series of constituencies, and also of community where they are operating. Additionally it ensure that the board is accountable for shareholders. As a result, it guarantees that the corporations as a whole are operating for the benefit and profit of society. Though by taking the advantage of asymmetry between the shareholders, huge amount of profit can be made in short run, and by balancing the interest of all shareholders itself guarantee the growth and the survival of the corporation in long run. Heavy cost can be incurred if there is failure to execute the good governance which can be the regulatory problems. Many proofs suggest that those corporations or companies which do not implement and follow the significant corporate governance measures can give the considerable risk premium in the public market at the time when it is competing for the limited capital. In recent times, the analysts of the stock market received a high appreciation from the market for showing the relationship between the returns and the governance. For this context, different reports do not only talk about the governance in common but they also recommend the explicit alter investment which is totally based on weakness or strength of the infrastructure of the corporate governance of the company. The best thing about the credibility which is given by the procedures of a good corporate governance is that it help to provide the confidence of clients (national international) in order to draw more ‘pat ient, the capital for the long term, and also help to cut down the capital cost. All this increased attention is because of arises of the financial crises in different parts of the world. Like, the financial crises in Asia brought the attention of the corporate governance subject in Asia. Recently, the scandals in the US also disturb the unsatisfied corporate landscape and peace which are unexpected in a sense. These scandals lead to a new set of initiatives in corporate governance in US and trigger a new discussion in the United Kingdom with European union and in the rest of the world. Meaning of Financial Statement Fraud Financial statements are the picture of financial position of a company which includes balance sheet, profit and loss accounts, and trading accounts. Frauds here, means deliberately and intentionally done activities for self interest and cheating the second party. Under the Statement of Auditing Standards (SAS) 1101, it is stated that â€Å"Auditors should plan and perform their audit procedures and evaluate and report the results thereof, recognizing that fraud or error may materially affect the financial statement†. Accounting to Benny K.B. Kwok 2005, Misstatements in financial statements can arise from either by error or by fraud. Error refers to an involuntary misstatement in financial data of a company which include omission of an amount or disclosure, such as A mistake in gathering or processing data from which financial statements are prepared; An incorrect accounting estimate arising from oversight or misinterpretation of facts; and A mistake in the application of accounting principles relating to measurement, recognition, classification, presentation or disclosure. The usage of both the dishonesty to get the financial advantage illegally and intentionally falsification also disturbing the statements, leads to fraud which can be done by any person from the management, or the employees or any third party. In fraud following things involves â€Å"Falsification or alteration of accounting records or other documents; Misappropriation of assets or thefts; Suppression or omission of the effects of transaction from records or documents; Recording of transaction without substance; Intentional misapplication of accounting policies; Wilful misrepresentations of transactions or of the organizations state of affairs. Financial reporting in the UK is based on three principles:- Companies Act 2006 Accounting standards or specifically Statements of Standard Accounting Practices(SSAP) and Financial Reporting Standards And the requirements of the Stock Exchange. Companies Act 2006 According to the Companies Act 2006, accounting records maintained by every company must: Be sufficient to show and explain the companys transactions; Disclose with reasonable accuracy at any time the financial position of the company at that time and Enable the directors to ensure that any Profit and Loss account or Balance Sheet gives a true and fair view of the companys financial position. Accounting records should contain day to day entries of all transactions, full record of companys assets and liabilities and full information regarding companys stock. According to Companies Act 2006 under section 145(B), if the financial statements of a company do not meet the requirements of the Act, the court may ask for revised financial statements and the cost of re- preparing financial statements would be bear by the party in abuse of preparing defective or false financial statements. Accounting Standards In UK, all accounting standards till 31 July 1990 used to be called Statements of Standards Accounting Practice (SSAP) which was formulated by the Accounting Standard Committee (ASC). SSAP was then gradually replaced by Financial Reporting Standards (FSA) produced by the successor to the ASC, the Accounting Standards Board (ASB). UK Accounting Standards laid down the guidelines regarding how particular types of transaction should be reflected in the financial statements of a company to present true and fair picture of companys financial position. The stock exchange listing requirements-Yellow Book Rules which governed the listing of securities of the stock exchange in the UK are known as the Yellow Book. According to Yellow Book, listed companies are required to publish their financial statements within six months of their financial year end. Most of the listed companies however, publish their financial statements quarterly. It is necessary from the point of view of shareholders because shares of companies are in the hands of general public and they need continuous information regarding firm financial position so that they can take right investment decision. According to SSAP December 1999, â€Å"the objective of financial statements is to provide information about an organizations financial performance and financial position that is useful to a wide range of readers for assessing the stewardship of the organizations management and for making economic decisions†. For the purposes of this discussion, we are talking about financial statement fraud in a major public company context; a context that can affect confidence in the financial system. We are not talking about what might be called internal fraud or a great many other types of dishonest conduct in corporate life. This is about projecting a false state of affairs on a large scale and in a very public context. DEFINITIONS Corporate governance is about promoting corporate fairness, transparency and accountability Wolfensohn, president of the Word bank, June 21, 1999. Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance, OECD April 1999. OECDs definition is consistent with the one presented by Cadbury [1992]. According to Elliot and Willingham, â€Å"financial statements fraud is management fraud, the deliberate fraud committed by management that injures investors and creditors through materially misleading financial statements†. Key words used in the research: Currency option: In this option the possessor has the right to sell or buy the currency at a particular phase of the time at a particular price. In this the possessor doesnt have the obligation. Currency forward: The prices are locked in this contract so that the counterparties can sell or buy the currency on the upcoming or future date. Here the possessor who holds the contract are obliged to sell or buy the currency at a particular future date, at the particular quantity and on a particular price. These transactions are also called as outright forward currency transactions. Option: when the option is exercised to earn profit then it is known as in- the-money option. Call option: In this type of option, the buyer who wants to buy any assets, commodities etc. has the right to buy at a particular period of time but he is not obliged, whereas the seller is highly obliged to sell the assets etc. at a particular time to the buyer. A premium has to be paid by the buyer to hold this right. This option is carried out when the strike price is below the price of the market of the agreed commodities. Put option: In this option, the seller has obligations to buy the commodities, assets etc. from the buyer whereas the buyer has the right, but there is no obligation, to sell the agreed commodities, assets etc. at a particular period of time for a particular price. This option is carried out when the strike price is more than the price of the market of the agreed commodities. Prime broker: The person who settle down the cash and security for their clients in the financial market by charging them fees is known as the prime broker. They manage the money of their clients by using different strategy in the market. Research Questions and Objectives Research Questions Financial statements frauds -ethical or technical issue? How firms manipulate their financial statements? What are the motives of financial frauds other than monetary? What is the role of corporate governance in controlling these frauds? Research Objectives: To analyse the major areas of frauds. To examine role of top management in fraudulent practices. To analyse the efficacy of various acts and rules passed for enhanced corporate governance. To analyse the importance of financial statements in investment decision making. To explore the causes and consequences of financial statements frauds. Scope of study: Research study will be restricted to European countries financial statement frauds as US market is more explored than European market. Research will examine and critically analyse the case study of Ireland based bank named Allied Irish Bank. Remaining chapter shall follow the following planned strategy: Chapter Two: Literature review: It will cover 3000 words and include journals and articles citation. Chapter Three: Research Methodology: It will cover 1500 words. This section will give idea of data collection and also briefly explain limitation attached to it. Chapter Four: Data Analysis: This section will evaluate and analyse the data and follow the discussion. Chapter Five: Conclusion and Recommendations: This section finally concludes the research and provides recommendations. CHAPTER TWO Literature Review 2.1.1. Agency problem and Corporate Governance 2.1.1.1 Separation of ownership -origin of agency problem Agency problem resulted from separation of ownership from control (Berge Means 1932; Jensen Meckling 1976) is still prevailing around the world. Findings have proved that firms having weaker corporate governance policies and structure face greater agency problems; which allow senior managers to cook their recipe of extracting more private benefits and finally firm perform worse at all levels (Core at al. 1999). Evidence for such a weak corporate governance structure and higher agency problems can be found from Asian Financial Crisis in 1997. At the time Asian Crisis 1997, firms which had good corporate governance structure provided better protection to shareholders especially to minor shareholders and performed better during the crisis (Joh 2003 and Mitton 2002). In countries like USA and European countries especially UK, agency problems are higher as evidenced from corporate scandals in USA and UK for example Maxwell Corporation (1991), Polly Peck (1991), BCCI (1991), Enron (2001) , Barings Bank (1995), Parmalat (2003) and many more. The recent scandal happened in Societe Generale Bank of Paris 2008, in this also agency problem was the main reason for the frauds committed by the employer of the Societe Generale Bank of Paris. An Agency problem is very crucial problem which had taken birth during 19th century. Agency theory is defined as a â€Å"contract under which one party (the principal) engages another party (the agent) to perform some service on their behalf† (Jensen and Meckling 1976). The problems arises when the agent do not work in the welfare of principal. More cases of frauds, where involvements of companys top management were high, coming into light and the simple reason is principal agency problem. In the case of HealthSouth, CEO Richard Scrushy had instructed senior managers to show fraudulent income of $2.5 billion in order to meet Wall Street expectation. 2.1.1.1.1 Agency Cost Agency costs are another issue which is bear by the principal for the frauds committed by the agent. The result of agency problem is reflected in companys share price which can be seen as the loss to shareholders in terms of declined in the price of shares in stock exchange.Jensen and Meckling (1976) explained agency costs as the sum of monitoring costs, bonding costs, and residual loss. Monitoring cost:- In UK companies are required to follow Cadbury (1992) and Greenbury (1995) reports for corporate governance. Monitoring cost are paid by the principal to monitor the behaviour of agents. Monitoring cost generally include costs of conducting auditing, writing executive compensation contracts and sometimes cost of firing the fraud employees and other top managers or executives. All these costs are paid by the principal, but Fama and Jensen (1983) argued that these agency costs which are initially born by the principal, ultimately borne by the agents as the compensation of agents are adjusted to cover these costs. Some researcher further argued that monitoring will restrict the managerial initiative (Burkart, Gromb and Panunzi 1997). Criticisers of Cadbury Report (1992) have argued that high level of monitoring may restrict the managerial entrepreneurship. Bonding Costs As argued by Fama and Jensen( 1983), monitoring cost ultimately bear by agents which need to set up structure that will act in interest of shareholders or principal , the cost of establishing these set up or system is known as bonding costs. These costs are not always financial in nature; it may include additional information provided to shareholders. Denis (2001) further argued that â€Å"the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests†. In UK, bonding structure which is imposed on closely held companies management, require companies to distribute all income after meeting all business expenses. Earning retention is big problem in UK; the mechanism of bonding may reduce the scope of this problem. Residual Loss â€Å"Residual loss arises because the cost of fully enforcing principal-agent contracts would far outweigh the benefits derived from doing so. Since managerial actions are unobservable ex ante, to fully contract for every state of nature is impractical. The result of this is an optimal level or residual loss, which may represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems.† (Patrick McColgan 2001:8). 2.1.1.2 Stewardship theory Agency theory is more dominant in the perspective of corporate governance mechanism, but this view has been criticized by many writers (Hoskisson et al. 2000; Blair 1995; Perrow 1986). Agency theory had limitation in explaining sociological and psychological involved in principal agent conflicts (Davis Thompson 1994; Davis et al.1997). Stewardship theory assume mangers as good stewards of the firms. Managers act diligently in order to attain high corporate profits and shareholders returns (Donaldson Davis 1994). In an empirical study performed by Tian and Lau 2001 in Chinese shareholding firms, they find stewardship theory has received strong support in comparison to agency theory. Further Phan 2001 explained that â€Å"whether the assumptions of Agency Theory can be generalised to emerging markets, with their different sociological, economic, and developmental fundamentals, remains an important research question†. In summary, agency theory has its roots in industrial and organisational economics. Agency theory assumes that behaviour of human being is opportunistic and selfish. Therefore, the theory recommends strong director and shareholder control. It suggests the fundamental function of the board of directors is to control managerial behaviour and try to ensure that managers act in the best interests of shareholders. 2.1.2 Review of Corporate Governance reports In this section, international reports on corporate governance will be critically reviewed which were published in last decades. The international reports considered in this section are as follows: â€Å"Report of the Committee on the Financial Aspects of Corporate Governance† (Cadbury Report, 1992) â€Å"Where were the Directors? Guidelines for Improved Corporate Governance in Canada† (Dey Report, 1994) The General Motors Corporation Guidelines (GMC, 2001) â€Å"Committee on Corporate Governance† (Hampel Report, 1998) â€Å"OECD Principles of Corporate Governance† (OECD Report, 1999) Sarbanes- Oxley Act 2002 After the unexpected corporate scandals of renowned companies like Maxwell (1991), Polly Peck (1991), and BCCI (1991) among others in the UK, the committee for corporate governance under the guidance of Sir Adrian Cadbury along with Financial Reporting Council (FRC), the London Stock Exchange (LSE), and the other accountancy profession has been formed to address corporate governance issues. This report was known as Cadbury report which was first report in UK focused on the aspect of corporate governance such as financial reporting and reviewed the role of boards and auditors. This report was published in 1992. The Cadbury committee report finally draw two major recommendation for the structure of UK corporate board. Cadbury report suggests at least three non executive directors in the board and two of them should be independent from management. The positions of chairman and CEO should not hold by the same person. The purpose behind this set up was to reduce the individual dominance a nd ensuring higher level of monitoring for corporate board by introducing more independence. Beasley (1996) and Dechow et al. (1996) found that â€Å"firms with more independent boards are significantly characterised by a lower likelihood of financial statement fraud and earnings management†. In Canada, during 1994 Dey report was published. This report was the first fully fledged report on corporate governance which a company should follow in order to list on stock exchange. Toronto stock exchange (TSE) adopted these guidelines in 1995 which were laid down by the Dey report. All TSE listed companies required to provide the difference in their corporate governance guidelines and guideline laid down by the Dey report. After Dey Report 1994, other similar reports in other jurisdiction have been published. General Motors Corporation (GMC) in USA published its own corporate guidelines in 1994 after criticising by the shareholders regarding poor company performance and doubtful board practices. These guidelines were developed with consent of GMC board, its shareholders and other activists for corporate governance. These guidelines were welcomed by the institute California Public Employees Retirement System (CalPERS) and by the industry. GMC guidelines become the benchmark in USA for corporate governance. In UK, during 1998, Hampel Committee was formed to review the recommendations of Cadbury report (1992) and the Greenbury report (1995) relating to executive remuneration. The Hampel committee was also formed to cover some gaps by these two reports i.e. Cadbury report and Greenbury report. Hampel report suggests that good corporate governance goes beyond prescribed corporate structures. According to Hample Report (1998:15) on Corporate Governance Sir Hample â€Å"recommend that companies should include in their annual report and accounts a narrative statement of how they apply the relevant principles to their particular circumstances. Given that the responsibility for good corporate governance rests with the board of directors, the written description of the way in which the board has applied the principles of corporate governance represents a key part of the process†. Hampel report drew attention for the approach of box ticking which is a serious issue for corporate governance . It also examined the implementation of Cadbury and Greenbury report and suggested more clear recommendations on policies of remuneration, accountability and auditing. During 1999, Organisation for Economic and Co-operation Development (OECD) laid down principles of corporate governance for the listed companies of member countries of OECD. It cover main subjects areas like rights and equitable treatment of shareholders, role of stakeholders in corporation structure, disclosure and transparency of financial facts and figures and majorly role and responsibilities of board. OECD guidelines become starting point for local policy makers of corporate governance. After the ,shocking scandals of Enron and WorldCom, US congress along with NYSE (New York Stock Exchange) passed the reforms to address conflicts of interest and redefined relationship between companies and auditors. This reform was known as the Accounting Industry reform Act 2002 which is widely known as Sarbanes Oxley Act 2002. The main purpose of this act was to enforce the independence of external auditors. The act also reinforced duties and responsibilities for CEOs and CFOs by imposing strict penalties for misrepresenting companys quarterly and annual reports. The penalty for misrepresentation was personal fines of US$ 1 million or imprisonment up to 10 years or both. Sarbanes Oxley Act has intense effect on the corporate governance policies on US and rest of the world. NYSE also imposed additional requirement for listed companies, under which listed companies must have independent directors in majority and must disclose business code of conduct and ethics for directors, office rs including managers at all level, and employees. Whittington(1993) and Melis, (2004a) argued that â€Å"corporate financial reporting and corporate governance systems are highly correlated, with any improvement in either system having a positive influence on the other, and vice versa† Combined code issued in 2006 replaces the combined issued in 2003. Financial service authority of UK, require listing companies to be obliged by the combined code 2006 and carry out consultation before listing. This new code contains main principles and provisions. Combined code 2006 asks listed companies to make a disclosure statement for code and that should be in two parts. Some of the provisions are not or less relevant for small or new listed companies. Also some provisions do not apply to companies below FTSE 350. 2.1.3 Global findings for adoption of corporate governance guidelines According Stephanie Maier (EIRIS 2005:1) findings, â€Å"Only 25% of US companies separate the roles of chairman and CEO compared with at least 50% forcompanies in other developed economies. Swiss boards have the highestpercentage of independent directors(81%) Germany, Austria and Japanall have less than 10%. Only 4% of companies in Japan haveaudit committees comprising amajority of independent directorscompared to over 95% in the USA,Canada, the Netherlands,Luxembourg, the UK and Ireland†¢ Only 22% of companies in Singaporeand 25% of companies in Hong Konghave meaningful codes of ethics†. Board size: According to EIRIS 2005, average board size is minimum in New Zealand (7.2) and maximum in Germany (22.8). USA and UK comes at rank 7th and 8th with average board size of 10.7 and 11.4 respectively ( see appendices for details). Higgs Review (2003) suggested â€Å"An effective board should not be so large as to become unwieldy. It should be of sufficient size that the balance of skills and experience is appropriate for the requirement of the business and that changes in the boards composition can be managed without undue disruption†. Separation of ownership and CEO According to findings by EIRIS 2005, in UK nearly 97% separate the ownership under unitary board structure whereas in US only 25% companies separate the ownership under the unitary board structure. In Ireland and Luxemb

Anticipatory Grief Essays -- Psychology

Grief is a universal reaction experienced by all of us at some time in our lives. The capacity that makes each of us capable of warm, satisfying relationships also leaves us vulnerable to sadness, despair, and grief when such relationships are disrupted (Carr, 1969). Regardless of the actual relationship that might have existed prior to the death, we have the tendency to idealize the relationship once death has occurred and we expect expressions of normal grief. Unfortunately, "normal grief' is what society expects, but the needs of the individual prerequisites putting a label on grief. Because society influences our behavior through the secondary reinforcement of social approval during this time, we are not looking at the primary reinforcer of survival. The needs of each individual can only be understood in the light of knowledge of his/her own developmental background and the particular conflicts being mobilized, and what defenses are being used against these (Maddison & Raphael, 1 972). This same developmental background is important in another aspect of death called anticipatory grief. The term anticipatory grief was first used by Lindemann in 1944 to " ... denote a reaction to separation and the possibility of death rather than the inevitability of death" (Bourke, 1984). Over the years there has been much discussion and research has been done on anticipatory grief. But to this point research evidence is inconsistent. All research points to the fact that anticipated losses that face the individual are very real. "Their emotional investment in the individual's presence, the satisfactions and warmth that they have received through their attachment to her or him, are soon to be ended"(Kalish, 1977). Since Lindemann (... ... management of acute grief. American Journal of Psychiatry, 101, 141-148. Maddison, D. C. & Raphael, B. (1972). The family of the dying patient. In B. Schoenberg, A. Carr, A. Kutscher, D. Peretz, & I. Goldberg, (Eds.), Psychosocial aspects of terminal care (pp. 185-200). New York: Columbia Univ. Press. Marples, M. (1986). Helping family members cope with a senile relative. Social Casework: The Journal of Contemporary Social Work, 67, 490-498. Osterweis, M., Solomon, F., & Green, M. (1984). Bereavement: Reactions, consequences, and care. Washington, D.C.: National Academy Press. Rando, T. A. (1988). Anticipatory grief: The term is a misnomer but the phenomenon exits. Journal of Palliative Care, 4, 70-73. Rando, T. A. (1989). Anticipatory grief. In R. Kastenbaum & B. K. Kastenbaum (Eds.), Encyclopedia of death (12-15). Phoenix: The Oryx Press.

The Personality of a God :: essays research papers

The Personality of a God   Ã‚  Ã‚  Ã‚  Ã‚  In the year of 2003 there are many types of religions that are practiced in the United States, which involves a God, or a divine power. My personal preference of religion is Christianity. I believe in Jesus Christ and the all mighty God Jehovah. The characteristics of a God varies from religion to religion, but all leading up to love, an everlasting peaceful life, and salvation; therefore, giving strength to all human beings that believe in them and has faith in them.   Ã‚  Ã‚  Ã‚  Ã‚  Loving is the first characteristic trait that Jehovah possesses The first book of Moses indicates, for he made man in his own image and gave him dominion over all the land and animals (Bib.Gen.); therefore, this was the first act of love; furthermore, he so loved the world that he sent his only begotten son to save it (Jn.3: 16). Jehovah’s love surpasses any kind of love that may be found upon the face of the earth because his love is unconditional. He is a merciful God. All sins may be washed away if you are sincere when you call upon him. His door is always open. He has no set hours of the day or night when you can call upon him. There are millions of people around the world that worship Jehovah, for these reasons, and more.   Ã‚  Ã‚  Ã‚  Ã‚   Jehovah is a savior, for he freed slaves of all nationalities thus, I am not a slave, but I am a descendant of slaves, yet I can relate to the praises given to God, for releasing my ancestors from their bondage, for I live in a time now where faith in Christ helps me to cope with life’s obstacles, racism, and self-made mistakes, for his presence is always there with me providing comfort and assurance. Atheist disbelieve in Jehovah because they have never seen him, or talked to him. Jehovah is a God and he doesn’t have to prove himself to them by standing in their face just, so that they can see that he exists; whereas, polytheism on the other hand, are frowned up on by Jehovah, for he is a jealous God, and doesn’t want his children to love anyone more than he (Ex.34: 14).   Ã‚  Ã‚  Ã‚  Ã‚  The word provider pertains to Jehovah. He blesses us with food, shelter, clothing, and time. Each day that we open our eyes is a blessing because he didn’t have to wake us up.

Essay on Stagnant Lives in Streetcar Named Desire and Glass Menagerie

Stagnant Lives in Streetcar Named Desire and Glass Menagerie   Ã‚  Ã‚   The Stagnant Lives of Blanche DuBois and Amanda Wingfield  Ã‚  Ã‚   "All of Williams' significant characters are pathetic victims--of time, of their own passions, of immutable circumstance" (Gantz 110). This assessment of Tennessee Williams' plays proves true when one looks closely at the characters of Blanche DuBois in A Streetcar Named Desire and Amanda Wingfield in The Glass Menagerie. Their lives run closely parallel to one another in their respective dramas. They reject their present lives, yet their methods of escape are dissimilar. Both women have lost someone they cared for, and so seek to hold, and unintentionally suffocate, those they have left. A major problem that both Blanche and Amanda face is their misconception of reality and the "New South." "The predominant theme of these plays is Southern womanhood helpless in the grip of the new world, while its old world of social position and financial security is a paradise lost (Gassner 78). They are victims of a society that taught them that virtue, attractiveness, and gentility all led to happiness. When tragedy strikes, Blanche and Amanda are unable to adjust to modem society and eventually withdraw into the securities of the past. "For Blanche and Amanda, the South forms an image of youth, love, purity and all of the ideals that have crumbled along with mansions and family fortunes" (Tischier 319). Tragedy after tragedy has struck the character of Blanche DuBois of Streetcar until nothing is left except her tenuous grasp on sanity. Her young homosexual husband, Allan, kills himself, leaving her racked with guilt with which she cannot deal. It s as if the "Grim Reaper set up his tent," taking the... ... New York: Chelsea Publishers, 1987. 99-112.    Gassner, John. â€Å"Theatre at the Crossroads.New York,† Holt, Rinehart and Winston, 1960. pp. 77-91, 218-231.    Howell, Elmo. "The Function of Gentlemen Callers: A Note on Tennessee Williams's The Glass Menagerie." Tennessee Williams's The Glass Menagerie: Modern Critical Interpretations. Ed. Harold Bloom. New York: Chelsea, 1988. Contemporary Literary Criticism 11 (1979): 575-576.    Nelson, Benjamin. Tennessee Williams: The Man and His Work. New York: Ivan Obolensky, 1961.    Tischler, Nancy M. "The Glass Menagerie: From Story to Play." Tennessee Williams's The Glass Menagerie: Modern Critical Interpretations. Ed. Harold Bloom. New York: Chelsea Publishers, 1988.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Williams, Tennessee. A Streetcar Named Desire. New York: Viking Penguin, 1976.   

Data Collection Activities in Algebra 1

Algebra has long been taught in the same way. This usually means teachers rely heavily on the textbook. Though some textbooks have changed in recent years, the central focus is till on paper and pencil, memorization of rules, and use of algorithms. The Curriculum and Evaluation Standards for School Mathematics (NCTM 1989) asks mathematics teachers to seek activities that â€Å"model real-world phenomena with a variety of function† and â€Å"represent and analyze relationships using tables, verbal rules, equations, and graphs†.The standards also urge teachers to give students the opportunity to be actively involved in math through data analysis and statistics that are integrated into the curriculum. My hope is to show that these types of activities can be incorporated into an algebra I course as a way of teaching slope, y-intercept, and linear equations. I plan to teach a unit on linear equations during the third nine weeks of an eighth grade algebra I course next semest er.The project will begin with one class learning the material typically covered in most algebra textbooks. I do not plan to pretest the students because this is new material for them. This class will also go to the computer lab and complete a lesson on the computer covering linear equations. In addition, they will work in pairs using T1-82 graphing calculator to explore slope and y-intercept. All of these methods are what I have typically taught over the past 5 years.Another eighth grade class will be given several data collection activities as a unit of study for linear equations. The primary resource for this class will be Algebra Experiments I by Mary Jean Winter and Ronald J. Carlson. My focus will begin with a whole class participation data collection activity. The class will perform â€Å"the wave† in small sections at a time until the entire class has completed it. As a group will record the number of seconds it takes (for example) 3, 5, 8, 13, 15, 20, etc. to complet e the wave.Students will then use a prepared activity sheet that requires them to draw a diagram of the experiment, describe the procedure, identify the independent and dependent variables, create a table of data, graph data, choose two representative points to connect and create a â€Å"line of best fit†, find the slope and y-intercept of this line and describe it algebraically and verbally, then interpret the data through certain questions designed to create understanding of the purpose of the data and using the data to make predictions. This same format will be used for all subsequent activities uring the unit of study. The authors of the book say â€Å"Algebra Experiments I reflects the basic philosophy of the NCTM standards for learning, teaching, and assessment. Students have an opportunity to work collaboratively, to interact, and to develop communication skill. † The whole idea is to â€Å"bring the real world into your algebra classroom. † I plan to req uire the class that does the experiments to keep a daily journal. It will include hot they felt about the daily activities, a description of any specific new topic or topics they learned and a list of questions they still have.Each day the class will address any concerns from the previous day's activity. After several activities have been done by hand, I will instruct the class on how to analyze the data on the T1-82 graphing calculator. They will then be given the opportunity to use the calculator on another experiment. This class will also do the same graphing calculator activity on slope and y-intercept that the other class will do. I will give each class the same test and compare scores. I will also give each class a survey to compare attitudes, interest and understanding of the use of the material in a real-world application.My hope is that the students in the experiment class will have grasped the basic concepts of linear equations as well if not better than the other class an d be able to relate this knowledge in a very real way. My search for articles about my proposed topic was lengthy and I have chosen to comment on a few. My goal next semester is to read and use each of these articles in my actual action paper. I have only read one article in its entirety. What I gathered from the abstracts was the importance of using real-world applications and incorporating the use of the graphing calculator.Since my goal is to show that data collection activities can provide a way to teach the basic concepts of linear equations in a real-world setting, I tried to find articles that would bear this out. Mercer (1995) presents lessons that teach slope-intercept concepts of linear equations through the use of the graphing calculator. Held (1995) uses Computer-Intensive Algebra (CIA) to focus on the use of technology and real-world settings to develop a richer understanding of algebraic concepts. Dugdale (1995) has written about technology and algebra curriculum refor m. She focuses on â€Å"current issues, potential directions, and research question†.Assessment issues are addressed. Algebra is â€Å"a way of reasoning involving variables/functional relationships, generalizations/modes of representation and mathematical investigation/argument. Harvey (1995) was the keynote speaker at the Algebra Working Group of the Seventh International Conference on Mathematical Education in Quebec City, Canada. He spoke of how important technology was in new algebra curriculum reform based on the NCTM standards. Bell (1995) was also a speaker at the Quebec conference. He suggest curriculum modifications and reviews research on students' performance.Menghini (1994) â€Å"claims that, to be meaningful, algebra must be linked to real-work problems. † Wallace (1993) offers a data collection activity similar to one I have used in the past. I would like to include this one in my lesson plans. It â€Å"compares the trends of women's and men's world re cords for the 800-meter run using the linear and power Regression capabilities of a graphing calculator. A very promising article by Magidson (1992) â€Å"addresses the challenges, risks, and rewards of teaching about linear functions in a technology-rich environment from a constructivist perspective.Describes an algebra class designed for junior high school students that focuses on the representations and real-world applications of linear functions. † I hope this will help me next semester as I begin to encounter problems. References Bell, A. , (1995). Purpose in school algebra. Journal of Mathematical Behavior, 14 (1), 41-73. Dugdale, S. and others, (1995). Technology and algebra curriculum reform: current issues, potential directions, and research questions. Journal of Computers in Mathematics and Science Teaching, 14 (3), 325-57. Harvey, J. nd others. (1995). The influence of technology on the teaching and learning of algebra. Journal of Mathematical Behavior, 14 (1), 75- 109. Heid, K. (1995). A technology-intensive approach to algebra. Mathematics Teacher, 88 (8), 650-56. Magidson, S. (1992). From the laboratory to the classroom: a technology-intensive curriculum for functions and graphs. Journal of Mathematical Behavior, 11 (4), 361-37. Menghini, M. (1994). Form in algebra: reflecting, with Peacock, on upper secondary school teaching. For the Learning of Mathematics, 14 (3), 9-14.Mercer, J. (1995). Teaching graphing concepts with graphing calculators. Mathematics Teacher, 88 (4), 268-73. Wallace, E. (1993). Exploring regression with a graphing calculator. Mathematics Teacher, 86, (9), 741-43. Example 2 Use of Algebra Tiles to Enhance the Concept Development of Operations on Polynomials and Factoring in Ninth Grade Algebra Students The purpose of this action research project is to find out if the use of Algebra Tiles will enhance the concept development of operations on polynomials and factoring in ninth grade algebra students.Mathematics teachers a re guided by the Arkansas State mathematics Framework. The following three student learning expectations are covered by this research project. 2. 1. 5 Describe, visualize, draw and construct geometric figures in one, two, and three dimensions. 2. 3. 7 Represent problem situations with geometric models and apply properties of figures in meaningful context to solve mathematical and real-world problems. 2. 3. 8 Represent one, two and three-dimensional geometric figures algebraically. Algebra Tiles allow students â€Å"hands-on† experience with polynomials.The tiles give students the opportunity to model, to create a mental image, to draw, and to then symbolically manipulate polynomials. They are based on area and multiplication concepts that students are familiar with. Howden (1985) states â€Å"It is generally recognized that understanding the meaning of a mathematics concept, as opposed to merely performing the associated computation, is an essential element of true learning and achievement† and â€Å"research shows that modeling and visualization promotes such understanding†.Two units on polynomials will be taught in ninth grade algebra. One focusing on operations on polynomials and the other focusing on factoring. Two teachers will teach the same material using the same methods and tests. No pre-test will be given because ninth grade students have had no previous experience with these concepts. Both teachers will teach two of their own classes each of these two polynomial units. One class will receive traditional instruction by symbolic manipulation only. The other class will use the Algebra Tiles along with the traditional method.The student's scores for each unit using Algebra Tiles will be compared to the scores based on the traditional method only. Differences will be compared and noted. In addition, students receiving instruction with the tiles will keep a journal each day describing how they feel about using the tiles. According to Sharp (1995), students using algebra tiles â€Å"found it easy to think about algebraic manipulations when they visualized the tiles† and â€Å"the majority of students stated that the tiles added a mental imagery that made learning `easier. † Another possible comparison will be to see if there is any difference in scores or perception between boys and girls using the tiles. The goal of this research project is to see if Algebra Tiles or â€Å"modeling† will enhance the understanding of polynomials and make the process of factoring â€Å"easier†. References Howden, Hilde. Algebra Tiles for the Overhead Projector. New Rochelle, NY: Cuisenaire Company of America, 1985. Sharp, Janet M. Results of Using Algebra Tiles as Meaningful Representations of Algebra Concepts, ERIC search, 1995. Related article: â€Å"Study Guide Algebra†

Glass Castle Essay Essay

The novel The Glass Castle, by Jeannette Walls, addresses many social issues that we deal with every day. The most important social issues disputed on a daily basis are the kind of parents we want to be and what we want to teach our children for their future. In this memoir we are able to see how Rex and Rosemary Walls choose to educate their children to see the better side of their daily troubles. The Walls teach their children that no matter what nature throws at them, that they can handle it. Rex and Rosemary Walls may not have been the best parents, or even good parents for that matter, however they were able to turn their children into well-educated and better off adults. They were able to accomplish this by finding creative ways to teach them important life lessons. Like to learn how to face your fears and what doesn’t kill you will make you stronger. Although many people would not necessarily agree with the manner these parents educated their children, we can certainly accept the fact that most of the children gained exceptional values that otherwise may have not been learned. The positive effects of the Walls parents parenting skills were mainly that their children learned important values, that they learned what it means to stand by each other, and that they gained the importance of having something to inspire them to a great future. The Walls children learned important values like humility, loyalty, forgiveness and appreciation. These young children had to endure many hardships to learn the true meaning of being a family. They had to endure the poverty they lived in and the stubbornness of their mother who always wanted something better. They had to struggle between nature versus nurture and the struggle within themselves. The primary characters Jeannette Walls, Lori Walls, Brian Walls, Maureen Walls, Rosemary Walls, and Rex S. Walls together are able to define what a family is. Jeannette Walls is a bright young girl who has faith in her father to keep his promises. She learned to have hope for a brighter future. Early in the memoir Jeannette’s father teaches her an important life lesson. The lesson to always face your fears no matter what they are. In his words â€Å"†¦ but you can’t cling to the side your whole life, that one lesson every parent needs to teach a child is ‘If you don’t want to sink, you better figure out how to swim†¦Ã¢â‚¬  (66) This example is of when Jeannette is beginning to learn how to swim. Her father pushes her to keep trying until she finally is able to swim without drowning herself. Another significant life lesson Jeanette’s mother demonstrates is at the beginning when Jeannette burns herself and learns to not fear fire, but face it and eventually becomes fascinated by it. As she states in the following sentence â€Å"Good for you, Mom said when she saw me cooking. ‘You’ve got to get right back in the saddle. You can’t live in fear of something as basic as fire.’ I didn’t. Instead, I became fascinated with it. Dad also thought I should face down my enemy, and he showed me how to pass my finger through a candle flame†¦Ã¢â‚¬  (15). Lori Walls, Brian Walls, and Maureen Walls are Jeannette’s siblings with whom she is very close with and together make their dream of escaping their dysfunctional lifestyle a reality. Together they learn how to be loyal to each other. They always stand by each other and sometimes even acting more like parents than their own parents do. The children stand together so they could stand up to those who tried to hurt them. The Wall’s siblings show loyalty to one another because they are always together and support each other no matter what. While the parents unconventional method of parenting eventually works out, many events suggest that even though the children gained all these virtues, the parent’s manner in achieving them wasn’t totally appropriate for them. An example of this is when Jeannette’s father takes her to a bar and doesn’t care if an older man abuses her sexually. He just assumes that Jeannette is tough girl who knows what she is doing and can take care of herself just fine even though she is only twelve at the time. â€Å"†¦Aw, come on,’ he said and shouted at Dad, ‘I’m going to take your girl upstairs.’ ‘Sure’ ‘Just don’t do anything I wouldn’t do.’ He pointed his pool cue at me. ‘Holler if you need me,’ he said and winked at me as if to say he knew I could take care of myself, that this was just a part of my job.† (212) However, her father never meant for his daughter to get hurt so this is why he said to call him if she need it, but he wanted her to learn how to defend herself. In the end she did defend herself and faced her fear like her father had taught her. Another part where we can see Jeannette’s father in lack of responsibility is when he is so careless during one Christmas and ends up destroying Christmas for his children. This Christmas incident is a significant example of how alcohol can change a parent and the effect it can have on them because it shows the change from how Jeannette’s father goes from being a loving, caring, and responsible parent to an alcoholic father. It shows how Jeannette begins to see how her father really is. Like the Christmas incident and how he came home from bars and would get into fights with his wife. This made Jeannette start to not believe in her father as much as she did before. However, this experience served to teach Jeannette and her siblings that it wasn’t good to let yourself fall in any bad habits like alcoholism and betting. Another scene where the mother; Rosemary isn’t portrayed as a good parents is when she doesn’t do anything to protect Jeannette from her uncle Stanley and instead makes a silly remark that he is so lonely. â€Å" Mom, Uncle Stanley is behaving inappropriately,’ I said. ‘Oh, you’re probably imagining it.’ She said. ‘He groped me! And he’s wanking off!’ Mom cocked her head and looked concerned. ‘Poor Stanley,’ she said. ‘He’s so lonely†¦Ã¢â‚¬  (184) Nevertheless Jeannette’s mother actually taught her a harsh lesson about life through this; she showed her that many of these situations happened to young girls and nothing is done to prevent it from happening again instead people turn to look the other way. Overall the Walls parents Rex and Rosemary may not have been the best parents, but they did the absolute best to help their children become great human beings and not have any trouble in confronting their problems. Yes, they probably didn’t resort to having taught them in the best circumstances, yet they did the best they could due to their economic struggle. On the other hand the Walls children had a better chance to put those lesson and skills they learned to the use.