Financial Risk Essays (Examples)
Study Document
Impact Of Agency Theory
Agency Theory
Agency theory refers to the relationship with the principle and the agent, where the principle delegates its financial decision making to the agent. In most cases, the agent is the owner/executive of the company while the principle is the shareholder. Challenging … arisen in the past due to these problems as this relationship is exploited in self-interest. Some have argued that the scandals and agency risk exist primarily due the awareness of this theory which shouldn’t be thought in the first place. This education encourages an agency mindset where … of the principle (Heath). Sometimes pursuing of self-interest can be a misunderstanding as the agent and principle both have different capacity for taking risk, understanding of growth and other factors which sometimes misguide the principle about the agent creating conflicts on critical decision making of the firm.
… it gives room for agency theory to impact its decision.……
References
References
Demsetz, R. S. (1997). Agency Problems and Risk Taking at Banks.
Heath, J. (n.d.). Uses and Abuses of Agency Theory. Business Ethics Quarterly.
Kuypers, A. (2011). How is dealt with the agency problem and what is the role of the board of directors in it?
Lumen. (n.d.). Agency and Conflicts of Interests. Lumen. Retrieved from https://courses.lumenlearning.com/boundless-finance/chapter/agency-and-conflicts-of-interest/
Murray, I. (2016, September ). Wells Fargo and the Principle Agent Problem. Competitive Enterprise Institute.
Palia, D. (2007). “Agency Theory in Banking: An Empirical Analysis of Moral Hazard and the Agency Costs of Equity. Banks and Banks System.
Pennsylvania, W. U. (2017, August 08). Wells Fargo: What It Will Take to Clean Up the Mess. Wharton University of Pensylvannia.
Study Document
Agency Theory
… as hard and with determination as the owner would, bearing in mind that the manager does not have any direct shares in the financial results of the company (Tearney and Dodd, 2009).
As a result, this could give rise to agency problems for the reason that this … explaining three important ways in which agency theory might impact decisions made in a company in relation to the recording and presentation of financial information.
Agency Theory & Decision-Making in Accounting
There are important ways in which agency theory might have an effect on decisions that are … which agency theory might have an effect on decisions that are made by a company in association with the recording and presenting of financial data and information. These ways include moral hazard, adverse selection, and information asymmetry.
Moral Hazard
Moral hazard alludes to the agent’s conceivable lack … the principal to assess the……
References
References
Ballwieser, W., Bamberg, G., Beckmann, M. J., Bester, H., Blickle, M., Ewert, R., ... & Gaynor, M. (2012). Agency theory, information, and incentives. Springer Science & Business Media.
Bou?ková, M. (2015). Management accounting and agency theory. Procedia Economics and Finance, 25, 5-13.
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74.
Healy, P. M. (2005). Financial Reporting Problems at Molex, Inc.(A). Harvard Business School.
Larcker, D. F., & Tayan, B. (2007). Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right?. Rock Center for Corporate Governance at Stanford University Case Teaching No. CG-05.
Mitnick, B. M. (2015). Agency theory. Wiley encyclopedia of management, 1-6.
Scott, W. R., & O\\\\\\'Brien, P. C. (2003). Financial accounting theory (Vol. 3). Toronto: Prentice Hall.
Tearney, M. G., & Dodd, J. (2009). Accounting theory. H. I. Wolk (Ed.). New York: Sage.
Study Document
How Interest Rates Compare Over The Last Decade Within The United
… used in almost every industry, country, and geography. Interest rates can also influence corporate and consumer behaviors. For example, depending on the inherent risk of a consumer, credit card rates determine how much an individual must pay on a month basis to the financial institution. Corporations looking to borrow funds to expand their market share must consider the variable interest rates being changed and their ability to … by individual investors, general consumers, and corporations. Banks in particular are heavily influenced by the change in interest rates as they operate as financial intermediaries between consumers and business. As a result, they often focus keenly on what interest rates may likely look like in the future … viability of the franchise (Stock, J.H. and Watson, M.W, 2007).
Banks play a vital role in the overall economy. They act as a financial intermediary between savers and borrowers. The often help to……
References
References
1. Goodhard, C and E Perotti, 2008 “Maturity mismatch stretching: Banking has taken a wrong turn”, CEPR Policy Insight 81, 6-July
2. Holston, Laubach, and Williams. 2017. “Measuring the Natural Rate of Interest: International Trends and Determinants,” Journal of International Economics 108, supplement 1 (May): S39–S75
3. Laubach and Williams. 2003. “Measuring the Natural Rate of Interest,” Review of Economics and Statistics 85, no.4 (November): 1063-70.
4. Rachel, L. and Smith, T.D., 2017. Are low real interest rates here to stay?. International Journal of Central Banking, 13(3), pp.1-42.
5. Schularick, M, and A M Taylor, (2009), “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008”, NBER DP 15512
6. Stock, J.H. and Watson, M.W., 2007. Why has US inflation become harder to forecast?. Journal of Money, Credit and banking, 39, pp.3-33
Study Document
Globalization Of Insurance
… the world have lowered rates to the point that it is impossible for insurance funds to obtain a targeted ROI without investing in risk assets. Likewise, regulatory bodies have gone global as well with organizations like the Common Framework for the Supervision of Internationally Active Insurance Groups … both ends: tighter regulation makes it harder for insurance companies to make money (when regulation is loose, insurance markets tend to thrive—until the risk catches up with the marketplace and the bubble that is blown pops, as it did in 2008 the world over). Governments want increased … even regulation that impacts publicly traded companies impacts insurance companies and their investments because investors are watching the S&P and looking at the financial statements of companies, too—and their actions will determine where the market prices these companies’ shares, which in turn impacts the investments of insurance … agencies tasked with overseeing these……
References
References
Egan, M. (2018). Tax cut triggers $437 billion explosion of stock buybacks. Retrieved from https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html
Flegm, E. H. (2008). The Need for Reliability in Accounting. Why historical cost is more reliable than fair value. Journal of Accountancy, 205(5), 34.
Healy, P. M., Palepu, K., & Serafeim, G. (2009). Subprime Crisis and Fair-Value Accounting. HBS Case, (109-031).
Laux, C., & Leuz, C. (2010). Did fair-value accounting contribute to the financial crisis?. Journal of economic perspectives, 24(1), 93-118.
Light, L. (2019). More than Half of All Stock Buybacks are Now Financed by Debt. Here’s Why That’s a Problem. Retrieved from https://fortune.com/2019/08/20/stock-buybacks-debt-financed/
Reda, J. (2018). How Stock Buybacks Can Affect Executive Compensation. Retrieved from http://clsbluesky.law.columbia.edu/2018/08/03/how-stock-buybacks-can-affect-executive-compensation/
Young, M. R., (2008). Both sides make good points. Journal of Accountancy, 205(5), 34.
Vaughan, E. J., & Vaughan T. M., (2013). Fundamentals of Risk and Insurance, 11th Edition.
Study Document
Governments Procurement Methods In Integrated Public Service
… stimulated further research in PPPs. The result has been the development of new PPP models, frameworks, issues to do with concession, project financing, risk management, allocation, and critical success factors (CSFs). While there have been numerous efforts to streamline PPPs, efforts to streamline their framework have been … The contract is weaved around a specific project and points out operational, clinical service standards that the private organization should meet and the financial obligations.
In the arrangement, the government will keep its role in paying for healthcare services. In some situations, the government will not make … the timely…[break]…the same instead. They will be managers in the partnership and buyers of the infrastructure and service provided. To ensure success, sufficient financial and workforce resources must be pumped into the project.
The capability of the private and public sectors to develop a partnership arrangement that … project's success. In the current……
References
Bibliography
Duff, V. (2020). What is organizational integration? Retrieved from https://smallbusiness.chron.com/organizational-integration-82053.html
Friedman, S. (2016). Successful public/private partnerships from principles to practices. Washington, DC: Urban Land Institute.
Ma, L., Li, J., Jin, R., &Ke, Y. (2019). A holistic review of public-private partnership literature published between 2008 and 2018. Advances in Civil Engineering. Retrieved from http://downloads.hindawi.com/journals/ace/2019/7094653.pdf
PrivacySense. (2016). Public sector. Retrieved from http://www.privacysense.net/terms/public-sector/
Reddy, C. (2016). Staff training: Importance, benefits, advantages, and disadvantages. Retrieved from https://content.wisestep.com/staff-training-importance-benefits-advantages-disadvantages/
Sekhri, N., Feachem, R., & Ni, A. (2011). Public-private integrated partnerships demonstrate the potential to improve health care access, quality, and efficiency. Health Affairs, 30(8).
Study Document
Purchasing And Supply Management
… In other words, a firm seeking to be competitive and profitable must have a good purchasing and supply management process in place—otherwise it risk watching its bottom line whittle away due to costs that it did not try its hardest to reduce. This paper will discuss the … improve quality for the firm; 4) to promote the pursuit of innovation; 5) to leverage new technology whenever possible; and 6) to reduce risk and to ensure the supplies will be there when needed (BDC, 2019). By pursuing these goals the purchasing and supply management professional can … price does not come from the most reputable supplier. Should the manager sacrifice quality and reliability for price? Never—doing so would present enormous risk: for instance, what if a much needed supply for the production line is needed and has not come in because the supplier failed … first step in this process……
References
References
BDC. (2019). 6 ways the purchasing department can improve your business. Retrieved from https://www.bdc.ca/en/articles-tools/operations/purchasing/pages/purchasing-department-objectives.aspx
Benton, W. C. (2013). Supply chain focused manufacturing planning and control. Nelson Education.
Burt, D. N. (2010). Supply Management, 8th Edition. Devry.
Harland, C., Brenchley, R., & Walker, H. (2003). Risk in supply networks. Journal of Purchasing and Supply management, 9(2), 51-62. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.471.2910&rep=rep1&type=pdf
Holmlund, M. & Strandvik, T. (1999) Perception configuration in business relationship, Management Decision, 37(9), 686-696
MacNeil/Lehrer Productions (Producer). (1999). Your computer, your way: Dell and thedirect sales model [Video file]. Retrieved from https://libraryresources.columbiasouthern.edu/login
Monczka, R. & Handfield, R. (2016). Purchasing and supply chain management. Boston, MA: Cengage.
NC State University. (2003). Negotiating for success. Retrieved from https://scm.ncsu.edu/scm-articles/article/negotiating-for-success
Study Document
Cyber Crime IT Security Auditing
… armor of the company's information technology system.
Introduction
ICT advancements have meant the availability of vast quantities of data, which also creates considerable risk to the data itself, computer systems, and critical infrastructures and operations it supports. Despite developments in information security, numerous information systems continue to … Internal information security auditing enhances the likelihood of implementation of suitable security measures for averting such breaches and reducing their adverse impacts.
Security risk
Two classes of risk exist, against which corporate information systems require protection: logical and physical. The latter, more to do with devices as compared to the actual … everyday data and information system backups, tested, state-of-the-art disaster recovery interventions, and rotation and off-site backup data storage in a secure place. Logical risk denote illegal access and purposeful or inadvertent modification or destruction of information or the whole information system. Such threats may be reduced using … with……
References
References
Almatari, O. and Helal, I., and Mazen, S., and El Hennawy, S. (2018). \\\\\\"Cybersecurity Tools for IS Auditing.\\\\\\" The 6th International Conference on Enterprise Systems, At Limassol, Cyprus 10.1109/ES.2018.00040.
Davis, W. S., & Yen, D. C. (Eds.). (2019). The information system consultant\\\\\\'s handbook: Systems analysis and design. CRC press.
Diamantopoulou, V., Tsohou, A., & Karyda, M. (2019). From ISO/IEC 27002: 2013 Information Security Controls to Personal Data Protection Controls: Guidelines for GDPR Compliance. In Computer Security (pp. 238-257). Springer, Cham.
Khan, M. (2017). Computer security in the human life. International Journal of Computer Science and Engineering (IJCSE), 6(1), 35-42.
Lenghel, R. D., & Vlad, M. P. (2017). INFORMATION SYSTEMS AUDITING. Quaestus, (11), 178.
Manaseer, S., & Alawneh, A. (2019). ON CYBERSECURITY AUDITING AWARENESS: CASE OF INFORMATION AND COMMUNICATION TECHNOLOGY SECTOR. International Journal of Computer Science and Information Security (IJCSIS), 17(7).
Suduc, A. M., Bîzoi, M., & Filip, F. G. (2010). Audit for information systems security. Informatica Economica, 14(1), 43.
Study Document
Integrated Waveguide Technologies Preparing For A Public Offering
… stock repurchases. Dividends mean the company's earnings distributed to the stockholders declared during the year, interim dividends, or at the end of a financial year referred to as the final dividend. Dividends account as a source of income for the investors but also have an information signaling … the earnings to allocate as dividends and contribute to sharing purchase investment decisions. Dividend distribution policy is informed by multiple factors such as financial flexibility, investment opportunities for the company, tax consideration, contractual and legal restrictions, the volatility of expected future earnings, and flotation costs (Baker & … no adverse effect on the stock prices. Modigliani and Miller posit that a firm's value is determined by the basic earning power and its business risk instead of the pattern of income distribution between retained earnings and dividends. The theory is premised on the assumption that firms operate on … al., 2001).
Dividend preference theory/Bird-in-Hand……
References
References
Al-Malkawi, H.-A. N., Rafferty, M., & Pillai, R. (2010). Dividend Policy?: A Review of Literatures and Empirical Evidence. International Bulletin of Business Administration, 5(9), 38–45. https://doi.org/10.12816/0037572
Baker, H. K., & Weigand, R. (2015). Corporate dividend policy revisited. In Managerial Finance (Vol. 41, Issue 2, pp. 126–144). https://doi.org/10.1108/MF-03-2014-0077
Black, F., & Scholes, M. (2010). The effects of dividend yield and dividend policy on common stock prices and returns. In Journal of Financial Economics (Vol. 1, Issue 1, pp. 1–22). https://doi.org/10.1016/0304-405X(74)90006-3
Farre-Mensa, J., Michaely, R., & Schmalz, M. (2014). Payout Policy. Annual Review of Financial Economics, 6, 75–134.
Mohanasundari, M., & Vidhya, P. (2016). Dividend Policy and Its Impact on Firm Value: A Review of Theories and Empirical Evidence. Journal of Management Sciences and Technology, 3(3), 59–69.
Travlos, Trigeorgis, & Vafeas. (2001). No Title. Multinational Finance Journal, 5(2), 87–112.
Study Document
Self Regulation Proposal
… 2008). Omarova (2011) describes the problematic nature of third-party regulation best in our industry: “Given the complexity and global nature of the modern financial market, any government's attempt to regulate it in a purely unilateral command-and-control manner will inevitably encounter the fundamental problem of regulatory arbitrage, whereby … market, any government's attempt to regulate it in a purely unilateral command-and-control manner will inevitably encounter the fundamental problem of regulatory arbitrage, whereby financial institutions find new ways to get around government rules, thus creating a never-ending spiral of rulemaking and rule evading” (Omarova, 2011, p. 416). … in many cases these fines do not cover the losses caused by the offending firm’s actions—nor are they more than a wrist-slap in financial terms (Greene & Odorski, 2015). The Fair Funds provision of the Sarbanes-Oxley Act (2002) was meant to ensure that fines were placed into … only a viable alternative to……
References
References
Arner, D. W., Barberis, J., & Buckey, R. P. (2016). FinTech, RegTech, and the reconceptualization of financial regulation. Nw. J. Int'l L. & Bus., 37, 371.
Arnone, M., & Padoan, P. C. (2008). Anti-money laundering by international institutions: a preliminary assessment. European Journal of Law and Economics, 26(3), 361-386.
Greene, E., & Odorski, C. (2015). SEC enforcement in the financial sector: addressing
Omarova, S. T. (2010). Rethinking the future of self-regulation in the financial industry. Brook. J. Int'l L., 35, 665.post-crisis criticism. Bus. L. Int'l, 16, 5.
Omarova, S. T. (2011). Wall street as community of fate: Toward financial industry self-regulation. University of Pennsylvania Law Review, 159(2), 411-492.
Pritchard, A. C. (2003). Self-regulation and securities markets. Regulation, 26, 32.
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